Written by: Kadeem Clarke
Compiled by: TechFlow
Wireless networks are the gateway to the internet, but they are opaque, and that could soon change. For decades, telecommunications services have controlled communications. As the internet transforms, carrying 4K video and millions of IoT sensors, some question whether the telecom industry can serve the next generation of internet users.
Traditional wireless networks are limited by bandwidth, congestion, service lags, and outages. On top of having to deal with these issues, customers also have to determine adequate coverage, which is often complex and expensive, and many people simply cannot access the internet. A Cornell University study found that "network coverage in low-income areas is nearly 15% lower than in more affluent areas," leading to a mobile divide. Since many people in low-income communities primarily access the internet through their cell phones, adequate coverage is critical. This is where the Decentralized Wireless (DeWi) narrative comes in.
Decentralized Wireless (DeWi) aims to revolutionize the way communication networks are built, operated, and owned by incentivizing operators to deploy and maintain telecommunications hardware in exchange for token rewards.
Thanks to mobile phones, 66% of the world’s population has easy access to the internet, up from just 7% in 2000. As the internet and global access expand, the amount of data created will only increase. The rise of new technologies, such as self-driving cars, the Internet of Things, smart cities, and virtual reality environments, has increased global demand for higher bandwidth and lower latency networks. Traditional wireless network (TradWi) operators are unable to meet this growing demand.
Before we discuss DeWi, we should discuss traditional communication infrastructure. It is worth noting that telecommunications companies typically deploy new wireless networks every ten years. This process usually requires the following steps:
Taking on tens of billions of dollars in debt to finance capital expenditures and operating expenses.
Buy a government license plate.
Use third-party manufacturers to create proprietary hardware.
Identify property owners willing to host the tower and radio.
Mobilize large numbers of field technicians to install and maintain complex equipment.
The top-down network construction model used by telecom companies is not suitable for the next generation of wireless networks. New network technologies, such as 5G, require a large number of radios and antennas, which telecom companies cannot afford. The telecom company model has historically prioritized coverage in densely populated areas, while ignoring many less populated rural areas.
Telecom services have undergone some exciting changes over the years. Three major shifts are now making DeWi adoption possible: the mainstreaming of eSIMs, the opening up of wireless spectrum, and advances in blockchain technology and wireless hardware.
The iPhone 14, released by Apple last month, has one major difference: there is no longer a physical SIM card slot. The latest iPhone supports a digital alternative called eSIM, which users can activate by scanning a QR code. This is an important advance for DeWi cellular networks because it reduces carrier switching costs to near zero. Since the iPhone 14 has six eSIM slots, users can install a DeWi eSIM next to their existing traditional carrier's eSIM and use both cellular networks at the same time.
Helium Network is a new decentralized network that is working to solve these systemic, expensive, and unfair problems by introducing a range of coverage operated by a swarm of nodes, each transmitting radio frequencies from their location. Hundreds of thousands of people can easily earn rewards, get a more reliable network, and contribute to growing a strong network by allowing anyone with a Hotspot to participate.
While Helium Network offers a whole new way to build networks and opens up this space in the same way that the open source movement did for the internet, it cannot be a one-size-fits-all technology.
Telcos aim to cater completely to consumers, increasing speed and coverage, but their contracts are too restrictive and cannot be trusted. Telcos do not provide enough cost or coverage flexibility for businesses using IoT devices, nor can they move their networks to lower power, higher range.
How it all ties together
The Helium network runs on a proprietary algorithm called Proof of Coverage, which verifies that hotspots are located at the locations they are uploaded to. Proof of Coverage continuously confirms that a hotspot is broadcasting wireless network coverage from a specific location. It uses radio frequency (RF) technology to generate confirmation to aid in the operation of the network. According to the company, proof of coverage is based on three key characteristics: RF distance, RF strength, and RF speed. They use a PoC challenge algorithm where hotspots are checked to ensure that they are broadcasting coverage from the locations they uploaded.
An "algorithmic challenge" consists of a hotspot issuing the challenge, a hotspot receiving the challenge, and a nearby "witness" who reports the existence of the challenge to the network. The challenger hotspot first generates a public/private key pair for the challenge. The SHA256 algorithm is then submitted to the blockchain as a challenge proof request along with the public/private keys. If the request is valid, the blockchain accepts it and creates a new block with the challenger's identity and public key hash. The hotspot issues a challenge proof every 360 blocks and receives $HNT, Helium's token, in exchange. Once the hotspot's data has been checked and verified, it is stored on the Helium blockchain.
Nova Labs, the company behind Helium, announced that it intends to transform Helium into a decentralized platform on which any type of telecommunications network can be placed. This strategy transforms Helium into a network of networks. The processes that allowed LoRaWAN (Long Range Wide Area Network) to scale rapidly can be replicated on a variety of other network types such as 5G, WiFi, VPNs, and CDNs.
Following the success of Helium's LoRaWAN network, Helium has launched many new DeWi networks based on the Helium model. There are currently more than 14 DeWi networks, including cellular, WiFi, LoRaWAN, Bluetooth, and hybrid networks:
5G Networks (Cellular): Helium 5G and Pollen Mobile Networks using CBRS spectrum are two prominent players in this category. The market opportunity for cellular networks is the largest compared to the market size of other networks.
WiFi: The DeWiFi network aims to create a global shared WiFi network that anyone can connect to for free. WayRu and WiFi Dabba are two early projects in this space.
LoRaWANs (IoT): LoRaWAN is a low-power, long-range wireless communication protocol. It is ideal for sending small packets of data (such as sensor data) over long distances, making it the network of choice for IoT devices. This category includes Helium and Foam.
Bluetooth Low Energy Networks: Bluetooth Low Energy networks are ideal for low-power and short-range applications. Nodle is a Bluetooth mesh network that uses smartphones and Bluetooth Low Energy routers to connect IoT devices to the internet.
Hybrid Networks: Decentralized internet connectivity is performed by hybrid networks, combining various wireless technologies into a single solution. Althea and World Mobile Token are two such examples.
HNT: Helium Network’s Token
At the time of writing, HNT is currently trading at $6.64 with a market cap of $1.5 billion and a circulating supply of 100 million HNT.
The percentage of HNT distributed as a reward depends on whether the node is a challenger, challenger or witness, as well as the type of work performed (validation, data transmission, publishing new blocks to the network). In addition, the mining of HNT is carried out using radio technology, while traditional mining uses GPUs (graphics cards).
On the other hand, the DeWi network adopts a novel token distribution mechanism that rewards participants for performing verifiable work in the real world. This incentive system is responsible for the economic flywheel that allows the network to be launched without the assistance of a centralized entity.
Protocols can incentivize participants to bootstrap the supply side of the network until its coverage is broad enough for end users to use. This allows the protocol to gain the initial momentum needed for adoption and to compete with centralized telecom services. Operators gain ownership of the network's uplink by building the supply side of the network, which incentivizes them to see the network succeed.
What are the advantages of DeWi compared to the TradWi network?
The most significant advantage of DeWi is lower capex and opex compared to TradWi's network. Building a network the traditional way requires a central entity to spend tens of billions of dollars to buy spectrum licenses, build proprietary hardware, lease land for deployment, pay a large number of field technicians to install and maintain the equipment, and maintain services for planning, billing and customers. Supported by massive backend infrastructure.
With DeWi, operators can enter into automatic revenue sharing agreements based on the revenue generated by each hardware device. In TradWi's deployment, operators must pay a fixed fee to the owner. DeWi's revenue sharing model is not only more efficient, but also allows owners to verify the benefits of the hardware on their property, thereby verifying their share of revenue.
The next generation of wireless networks requires an alternative to the traditional deployment model. Historically, macrocell radio stations mounted on large towers or masts have provided cellular network coverage over wide geographic areas. The problem with macrocells is that they provide low-frequency ranges, and 5G networks, unlike older generation cellular networks, require higher frequency bands to increase bandwidth. DeWi offers a more cost-effective solution for deploying 5G networks. Rather than replacing TradWi, DeWi can serve as a complement to it. DeWi enables users around the world to build networks in parallel, which is much faster than a centralized approach. Participants with some understanding of their jurisdiction can focus on deploying infrastructure that meets local market needs. With TradWi's macro coverage and DeWi's small cell coverage, 5G will likely become more widespread around the world.
The Future of the Web and Final Thoughts
Decentralized networks are the future of telecommunications services. Nova Labs is well-positioned to expand and strengthen their reach. The DeWi space is still in its infancy, but its potential to transform the telecommunications industry is undeniable. The number of protocols vying for a share of the DeWi cellular market is growing rapidly, and there is a ton of opportunity.
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