Hello, everyone!
First of all, we would like to thank every single one of you for being fantastic hosts. We really do appreciate the level of patience and understanding you have all demonstrated over the weeks, months and years we have been involved in this exciting new industry.
We have received a few messages recently from concerned hosts, specifically in relation to the value of the monthly rewards. Rather than respond to individual messages, we feel it’s probably best to inform you all of the current state of the Helium Network, and what the future holds for the price of tokens on the network.
This will be a fairly lengthy post, but it will contain some very important information which should help you understand how you are being rewarded, the current price action of the tokens you are being paid in, and what the future holds for the network that you are a vital part of.
I will use US Dollars throughout this article as it’s the standard way to measure world currency values.
Let’s start with a little bit of general information.
There are some people in the world which have been labelled as “lucky” because they became multi-millionaires through the crypto industry, but many of them were not lucky, they had a long-term investment plan which paid off.
They didn’t make millions by buying Bitcoin (BTC) when it was $10,000 or $60,000. They mined and purchased BTC when it was $1 or $10. They accumulated as much BTC as possible when the price was at it’s cheapest and the blockchain itself was a brand-new concept, much like the Helium Network is right now.
They didn’t see the value of BTC as only ever being $1 or $10; they predicted the value of BTC would be much higher than that in the future, and they waited, only cashing out when they thought the price was right. Some of them are still holding their BTC right now, expecting even higher prices in the next bull market.
What is a “bull market”?
The crypto industry goes through cycles which can last for years. A bear market is when prices drop over time and stay low for an extended period due to selling pressure. This means there is more of a given commodity being sold than being bought, which keeps the prices low. A bull market is the exact opposite, where there is more demand, which leads to more buys, which leads to higher prices.
The last bull market ended at the end of 2021, just after BTC hit it’s all time high of roughly $68,000. Since then, we have been in a bear market and BTC hit a low price of roughly $15,000 just a couple of months ago. The reason BTC has been used as a measure here, is because the rest of the crypto industry tends to follow the price action of BTC. The percentage changes will vary depending on the currency, but generally they will all go in the same direction.
Something to keep in mind is that with each subsequent bull market, the all-time high prices tend to be higher than the previous cycle, as well as the lowest prices in a bear market not being as low as the previous cycle. So, if you accumulate cryptocurrencies during a bear market, it is almost certain that the price of the currencies will increase over time and will very likely exceed the previous all-time high at the peak of the next bull market.
These cycles are not an overnight process. The last time BTC hit its all-time high was November 2021, and it’s not expected to hit it’s next all-time high until late 2024, or even 2025. Historically, it has happened within 18 months of the BTC halving, the next of which is due in April 2024. The halving requires a full article to explain on its own so I won’t get into the weeds here, but it essentially means that with each halving, BTC becomes harder to mine and therefore more valuable.
Let’s take Helium’s historical data and produce an example of where the price could go.
The Helium Token launched in November of 2020 at a price of roughly $0.30. Towards the end of 2021 and in-line with BTC all-time high, the Helium Network Token (HNT) hit its all-time high price of roughly $52. Since then, we have been in a bear market and HNT has hit a low price of roughly $1.50 where is currently sits. So, although the price has dropped massively since it’s all-time high, it’s still roughly 5x higher than it’s previous low of $0.30.
The next bull market, based on historical data, will take the price of HNT well over $52, but let’s be conservative and use $60 as a target. Now, everyone is going to have different amounts of HNT in their wallets depending on the length of time they have been hosting a hotspot, and the performance and up-time of their hotspot.
For ease of maths, let’s say you earn roughly 1 HNT per month, that’s 12 HNT per year, and you have had your hotspot active for roughly 3 years, that would be a total of 36 HNT tokens in your wallet. At current prices, that would only amount to about $50, which is why when you look at your wallet today you may be somewhat disheartened only seeing a few pounds after mining for several months.
With the estimation of a $60 HNT, if you look at your wallet during the next bull market, your balance could be reading upwards of $2000. Then it’s up to you whether you cash out all of it, cash out some of it, or keep it all for another few years to potentially make 5 or 10 times that amount again.
This is the scenario that will be playing out over the next year or so, and it will be up to you when you think the value of your tokens is high enough that you want to take your profit. These are all estimates of course, as nobody can actually predict the future price action of any cryptocurrencies, but we can use historical data to make an educated guess.
This is now the time of accumulation. Gather as many tokens as you can so that when we hit a bull market and prices are at an all-time high, you are sitting on a nice little bundle of tokens. Lots of our hosts just see the pound signs in the wallet app, and we get it, that's why you applied to host a hotspot in the first place, to get paid, but it's only worth what its worth at the point you cash out, not the day you get paid.
We are also very appreciative of all of our hosts for being an active part of the network and helping us push forward. All we ask at this stage is patience. It's simply a waiting game right now. Remember, we are in exactly the same boat as our hosts. Our tokens are worth the same as yours, but we know that we just have to wait until we can all reap the rewards.
Let’s now move on how the Helium network has changed and how you are being rewarded for being a part of the network.
The Helium Network was built from the ground up as its own Layer 1 Blockchain. Without going into detail about what a blockchain is, they are basically networks used by developers to build their digital services upon.
Helium decided to, rather than build the Helium Network on someone else’s layer 1 blockchain that they would build their own blockchain as a foundation for the Helium Network. This ultimately meant their development team had to build and maintain two systems simultaneously, with one being completely reliant on the other in order to operate.
This eventually led to problems that were becoming increasingly difficult to resolve, including managing and reporting Proof-of-Coverage data, which is the reason for hosts actually being rewarded. This further led to rewards being inconsistent, the network going down more regularly than anticipated, and ultimately for the Helium team to propose a migration of the Helium Network from the Helium blockchain to the Solana blockchain.
Solana is a well established layer 1 blockchain with features that would benefit the Helium Network greatly, but also would take the pressure off the Helium development team so that they could focus 100% on building features and services without the hassle of running their own Blockchain.
Before the migration occurred it was also voted on by the Helium Community that there would be separate tokens for different parts of the network. Up until April 18th 2023 all hosts with IOT hotspots were rewarded in HNT, which was and will always be the native token of the Helium network.
As the 5g hotspots were rolled out in America, the vote passed to have “sub-DAOs” or sub-tokens, one called MOBILE which would be used to reward 5g hotspot hosts in the US, and another called IOT which would be used to reward IOT hotspot hosts worldwide.
All of Helium Club hotspots are IOT hotspots, so our hosts are now rewarded in IOT tokens instead of Helium tokens. This doesn’t mean that IOT is replacing HNT. HNT will still be the native token of the Helium Network. Using the new Helium HNT Wallet app you can exchange your IOT tokens for HNT tokens, if you wish to do so, or you can hold them and let them accumulate in the same way you used to with HNT tokens. They will all show in your wallet app with separate amounts and values, and the total value of all of your tokens will be displayed at the top of the screen.
Obviously, this is just a very brief explanation of the current state of the Helium Network, and we have purposefully tried to avoid too much technical jargon. This is by design to keep it somewhat palatable for most people, but please contact us of any of this doesn’t make sense and we will be happy to talk through your queries.
There are plenty of extra resources that we would be happy to share with anyone that wishes to contact us for more detailed or technical information regarding any of the above.
To sum up, we are very bullish about the future of the Helium Network. The developers are constantly pushing the envelope of innovation and the price of the tokens can only go up over time. We are waiting, along with all of our hosts, for the price action to pick up, but we cannot predict with any certainty when that will be, nor what price HNT, MOBILE and IOT will reach in the next bull market.
What we don’t want to do down the line, is have regrets for not sticking with it. People tend to regret the things they didn’t do, far more than the things they did do.
If you were mining BTC years ago, but you decided to give it up because BTC was only worth $1 and it was only mining $0.30 worth per month, how would you have felt when you saw 1 BTC being worth $68,000, at which point you could have had tens or even hundreds of them?
Hosting a Helium Hotspot is not how to get-rich-quick, it is how to accumulate value over time.
We are all in this together. Stay the course. Reap the rewards. We will all win together.
Thank you.
Disclaimer: This article is not financial advice and is intended for educational purposes only.