Ahead of its wider launch later this year, Andrew Hobbs spoke to co-founder and CEO Amir Haleem about how Helium is promising an affordable and open blockchain-based IoT network.

Internet of Business: We first covered the Helium machine network last month but, given its promise, we were keen to find out more about the technology and your plans for it. First off, what obstacles are you attempting to overcome with Helium?

Amir Haleem: “Fundamentally, it’s too difficult for companies to bring low-power connected products online. There are several aspects to this problem, one of which is the networking layer. I don’t think there is an acceptable wireless networking solution for those kinds of devices at the moment.

“You’ve got legacy cellular, which providers have tried to improve in relation to low-power stuff, with the likes of NB-IoT and LTE-M, but it really doesn’t fit the profile. It is still fairly expense in terms of hardware and service costs.

“On top of this, the power consumption isn’t quite there, even on the newer technology. Then there is the difficulty of actually building devices.

“If you look back at the ’90s, software development was complicated and expensive. You had to spend hundreds of thousands of dollars. I remember a company I was at in the late 90s spending something like $600,000 to build, by modern standards, a terrible website.

“Hardware still feels like that when you want to build a prototype of a connected product. We see this with enterprises all the time. The prototyping costs for them are enormous. A lot of what we would have expected to see by now in the IoT space just hasn’t materialised due to the level of difficulty, the cost, and the time required to bring these things online is still prohibitive.

“This is why we go further than just building the networking layer. We also have development tools and modules, and good interfaces for all this. At the hardware level, we have SDKs and at the cloud level we have what we call ‘the router’, which makes it very easy to connect data into services like Google Cloud or AWS.

“Lastly, we think that native geolocation is an important characteristic for these kinds of devices. Geolocation has traditionally been very difficult to do in a low- power way because you’ve had to rely on GPS, which is extremely power-hungry and doesn’t work indoors.

We’ve worked hard to bring native geo-location to everything that connects to the network. This opens up all sorts of interesting use case that haven’t been seen yet, which have otherwise been impossible to build.”

You see a lot of existing companies and startups wanting to use blockchain simply because it’s the technology of the moment. Why have you decided to build a machine network using blockchain?

“When we started the company we decided we wanted to build this very specific type of wireless network that serviced the kind of machines that weren’t previously economically viable. Businesses have had to spend money on both the hardware and locate real estate to install it.

“In the cellular world there’s an entire side-industry that services the cellular companies, that acquires real estate and leases it to them. The bottom line is that it’s really expense and there’s rarely a business model there that makes sense.

“We’ve seen the likes of Sigfox and Ingenu blaze the trail ahead of us struggling with that because you spend hundreds of millions, or more, building the network infrastructure in a ‘build it and they will come’ mentality. But the reality of a lot of these connected products is that the suppliers are not going to spend the kind money that allows you to recoup your capex and opex costs.

“I don’t think there is any way to make money as a network operator for the kinds of low-power devices that we’re talking about. Therefore, something that we’ve always wanted to do is incentivise people to help us build network coverage. It’s not sane to try and do that ourselves, but blockchains allow you to build a permission-less system that anyone can participate in, so long as they follow the same set of rules.

“We designed a blockchain where those rules revolved around gateways (access points) that participate in the network and help grow the coverage. Unlike Bitcoin, which uses hashing to secure the network, if you join the Helium network the gateway has to be able to do several things. It must prove it’s actually functioning, that it’s where it says it is, and that it’s able to create wireless network coverage. By proving that you get rewarded with tokens that get generated by the network and given to you.

“We wanted to do it in this permission-less way where you didn’t need to rely on Helium, as the gatekeeper for whether you could join the network and participate in it. Blockchain is a really neat way to do that because you get the distributed, decentralised, permission-less network system and then, in layering a currency on top of it, you also generate an incentive scheme to encourage people to participate in the network.

“The likes of The Things Network (who I think have done a really good job of building a community-driven network) struggle with this, because there isn’t enough of an incentive for people to make sure the devices are online and functioning.”

Are you confident that this method of token mining is scalable, from the early adopters right up to wide-scale networks across entire states and countries?

“There are some limitations with the way that we’re doing it. The mining system requires that gateways can see other gateways. If you just have a gateway sitting in the middle of nowhere you aren’t going to be participating in the mining network.

“You’ll still be providing network coverage and, if devices come near you, they will still pay you for access to and from the internet, but you won’t be able participate in the mining process unless other gateways can verify that you’re actually there.

“When marketing this, we will focus on specific cities in order to create the density of gateways required to be able to participate in the mining. That’s one of the drawbacks of every blockchain system. You need some way to prove that people are doing the things they say they’re doing.

“Once there’s a sufficient density of devices using the network that becomes a much easier problem to solve. Gateways challenge each other so they need to be in close proximity. Luckily, it’s in the order of miles, so in a city context, it’s not a problem, but linking cities together or states together definitely becomes harder.”

While many cryptocurrencies use proof of work to secure the network, the computational cost of which can undermine the sustainability and scalability of the technology, you use proof of location and proof of coverage. How does this work?

“Proof of work is a really interesting system that has been very resilient in things like Bitcoin. The downside of it is that it doesn’t really provide any other value to the system beyond securing it. We wanted to try to come up with a system that did the securing part, but also added the side benefit of creating a wireless network.

“Proof of coverage was our answer to that. Rather than using computation you use radio waves as a way of mining. The gateways challenge each other by sending encrypted packets. We think it’s a really interesting system.

All the transactions are encrypted and the transaction rate is very high compared to something like Bitcoin or Etherium. We’re talking at lest tens of thousands of transactions per second.

You’ve created your own wireless protocol, WHIP, what was your reasoning behind that?

“Most of the money that has gone into the IoT space has been focused on proprietary things. Ingenu’s RPMA technology is really interesting, the same goes for Semtech and LoRa, and Sigfox and their network.

“Yet what you don’t have in IoT is the equivalent of WiFi or Bluetooth – an open standard built on open hardware. We felt that that was a problem. In our engagements with enterprise over the years, we’ve seen that they’re pretty gun shy when it comes to doing anything with a single-source vendor or proprietary piece of technology. It’s a risk in terms of whether or not that company will stick around or change their business model.

We tried to build a wireless protocol that uses completely open standards, that works on a bunch of existing commodity radio hardware, so that you’re not dependant on Helium existing. We’re just the designer of this thing.

“We hope that will enable more widespread adoption. We don’t want to be the only people making gateways or other hardware. By not trying to monetise at the hardware level, we will increase overall success in the IoT space.”

What stage are you at in terms of rolling out the technology? Have you trialled it with potential end-users?

“We’re going to be launching a beta network in September or October. We have around 300 locations that we’re going to be operating in, mostly in the San Francisco Bay area, Boston, New York, and Los Angeles. We plan to then allow customers to purchase gateways towards the end of the year.”

“It’s similar to what the Things Network went through. They have different cities that they’ve focused on, supported by a community manager. We’ll have a similar tactic where we focus on different regions that we think are important and try to achieve good gateway density, not only because of the mining process but also because you get benefits from having dense coverage, especially when it comes to geolocation – where the more gateways there are the more accurate that process is.”

Will it therefore be a few years before you start looking abroad?

“I hope it will be a lot sooner than that. I think some of the most interesting opportunities are international, especially in emerging, developing markets. We are currently the only manufacturer of gateways but we hope to quickly have several others.

“Given the open source technology, there’s nothing stopping people creating their own gateway and deploying it anywhere they want. I’m hoping that regardless of our schedule and manufacturing capabilities people will start to create the network on their own because the incentive is there and the crypto-economic side makes sense.

Our hope at Helium is that the network will achieve rapid international deployment. We’re only capable of doing so much as a company, so we hope to encourage others to help us.

There’s obviously huge potential in the Internet of Things, but it maybe hasn’t come to fruition as fast as many people thought it would. Do you see the Helium network as key to helping business realise that potential?

“I certainly do. I think the fact that you don’t have to think about deploying a network makes it feel more like a cellular network. You can actually deploy devices at a reasonable cost. For many schemes tens of dollars a month, or even tens of dollars a year is in some cases too high.

“Furthermore, the openness of the protocols, the software, and the firmware means that no one has to feel any concern about investing in the infrastructure. Hopefully we’ve made that as easy as possible.

“I think we’ve done a really good job with our current products in terms of making them easy to use. This second step is about the expansion into ubiquity and the economic viability that comes with it.

As you mentioned, I don’t think IoT has yet reached the potential that everyone thought it might. The existing combination of proprietary and legacy technology isn’t helping move things forward. I believe Helium is potentially transformative, so I’m very optimistic about the launch.

Internet of Business says

If Helium can successfully demonstrate the robustness of its WHIP wireless protocol and the potential of the Helium machine network during the beta phase, the venture will quickly garner interest from enterprises.

Many SMEs are eager to employ IoT technology to boost efficiency, productivity, and customer insights, but have either struggled to make such projects economically viable, or been hesitant to buy into proprietary hardware and services.

The open, low-power Helium machine network represents the Internet of Things vision that many had at its inception – as a sort of mirror image of a decentralised, open internet, and all the economic and societal benefits that confers.

Beyond that, we will see how its mining system scales as the network grows and time goes on. Cryptocurrencies have taken a bit of a beating of late from the Bank of International Settlements, the Bank of England, and popular media.

However, Helium’s use of proof of coverage goes beyond simply securing the network, lending an inherent value to the mining process that many cryptocurrencies lack. It also requires a fraction of the computation (and therefore energy) that proof of work demands.

Should Helium’s plans be realised, IoT could be pervasive throughout the developed and developing world, it will be open to networking hardware manufacturers and developers, affordable for enterprises, and anyone will be able to contribute to its coverage. Grand ambitions matched by great promise.