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What is Helium Mining? A Comprehensive Guide For You

By December 7, 2022December 11th, 20224 minute read

Mining helps in the process of verifying the legitimacy of transactions that are made through a blockchain network, such as the Bitcoin blockchain. Miners can begin mining cryptos using hardware like a Central Processing Unit (CPU) or Application-Specific Integrated Circuits (ASICs). Alternatively, they can mine their preferred cryptos using smartphones with iOS and Android operating systems.

However, what about crypto mining via a decentralized wireless network? No matter how weird it may sound, miners can operate independently, saying no to expensive infrastructure. Helium Network has finally made it possible by enabling nodes to function as hotspot devices.

Let’s learn about Helium miners and Helium mining in this blog.

What is the Helium network?

Helium is actually a distributed network of long-range wireless hotspots to provide a decentralized wireless network for connected devices that are also a part of the Internet of Things (IoT).

IoT devices are basically smart “gadgets” that help in connecting to a network and exchanging data, offering a considerably wider range of connections than Wi-Fi. This is due to Helium; you won’t ever have to be concerned about your Wi-Fi connection going out again.

A centralized hub or router is no longer necessary with Helium’s decentralized network of smart devices because each one may connect directly to others in the vicinity.

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Helium uses blockchain technology, allowing users to create hotspots that function as Helium miners and data servers for devices. By purchasing a hotspot and putting it in, miners can make hundreds to thousands of dollars per month, thanks to this brand-new incentive scheme.

What makes the Helium network unique?

Helium intends to decentralize hardware through the interconnection of devices, contrary to most blockchains, which concentrate on the decentralization of software.

Proof-of-Coverage (PoC), a cutting-edge consensus method developed especially for the network, also powers the Helium network. Combining the method with the Honey Badger Byzantine Fault Tolerance (HBBFT) protocol enables consensus in the case of certain node failures.

In the following section, let’s understand what the PoC consensus is.

What is Proof-of-Coverage (PoC) consensus?

Sometimes tests are conducted on hotspots as part of a PoC consensus mechanism to verify that they are truly providing coverage. These tests are carried out automatically and at random. An operator of a hotspot receives a specified number of HNT tokens for passing this test.

Challengers, transmitters, and witnesses are the three different categories of participants in this system’s PoC challenge mechanism.

  • A hotspot that challenges another hotspot is known as a challenger.
  • The target of the challenge is the one who issued it, the transmittee, or the challengee.
  • Witness hotspots are those that are physically close to the transmittee. They send and confirm that the target has finished a proof-of-concept challenge.

What is a Helium Miner (or ‘Hotspot’)?

“Hotspot” or “helium miner” is a wireless device that rewards you with tokens for providing coverage. In the beginning, the network only needed one type of hotspot to handle all of Helium’s issues. Still, new kinds of hotspots are now being developed to meet the growing demands of the blockchain, which is growing rapidly.

  • Full Hotspots: These are eligible to participate in all activities and earn rewards, including proof-of-coverage activities.
  • Light Hotspots: Since they are software rather than actual hardware, these are an evolution of full hotspots.
  • Data-Only Hotspots: These concentrate on moving data; hence they only get paid for transferring data.

How does Helium Mining work?

Helium mining uses radio wave technology compared to conventional crypto mining, which relies on powerful gear such as ASICS or GPUs. As a result, it uses a lot less energy than traditional crypto-mining techniques.

Passing Proof-of-Concept (PoC) challenges and earning token payouts are the requirements for mining Helium tokens. The exact calculation for how many tokens a user might earn relies on the volume of traffic at their hotspot and the number of other hotspots in the area. The more competitive their industry is, the less money they’ll earn. For example, rural areas may have fewer hotspot competitors, but they also have significantly less traffic.

Additionally, the token rewards differ according to the hotspot’s function throughout the PoC challenge procedure. Around 0.95% of all mining rewards produced over a period of time are given to rewarding challengers, 5.31% are given to transmitters, and 21.24% are given to hotspot witnesses.

Final thoughts

With the help of the revolutionary Helium miner, anyone can join the Helium network and start making money.

Mining helium is a good source for anyone wishing to create some passive income, even if earnings depend on various criteria such as antenna choice, budget, and location.

It will be interesting to watch what new adjustments The People’s Network (powered by Helium’s Network) introduces for its new and existing subscribers with the arrival of the 5G cellular network.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
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Harshita Shrivastava

Harshita Shrivastava is an Associate Content Writer with WazirX. She did her graduation in E-Commerce and loved the concept of Digital Marketing. With a brief knowledge of SEO and Content Writing, she knows how to win her content game!

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