An internet-of-things (IoT) startup founded in 2013 is adding tokens to its business model with the backing of two of crypto’s best-known funders.
Helium announced Wednesday a $15 million Series C co-led by Union Square Ventures and Multicoin Capital. Investors will acquire equity in Helium as well as a share of the tokens that will accrue to the company over the next several years as they are minted, after its bespoke blockchain goes live, according to a spokesperson.
Previous investors that participated in the latest round included Khosla Ventures, GV (formerly Google Ventures), FirstMark Capital and German reinsurance giant Munich Re. The new round brings Helium’s total funding so far to just under $54 million.
Helium was founded to create a low-cost data network that IoT devices could access using consumer WiFi as its backend. The company sees current ways of getting IoT data back to firms that need it as too expensive. By driving down those costs, Helium says its network could challenge traditional telecommunications infrastructure.
But the company has come to see tokens as a necessary ingredient for spurring adoption.
“When we started the business in 2013, the goal was always to try to build this big broad network that everybody could use,” Helium CEO and founder Amir Haleem told CoinDesk, adding:
“We arrived at this conclusion a few years ago that crypto was the best model for what we’ve been building.”
Last year, Helium released a white paper for a decentralized wireless network that uses publicly available radio frequency to solve the last-mile problem of connecting IoT devices and the public internet.
Haleem founded the company alongside peer-to-peer pioneer Shawn Fanning (of Napster fame, also an investor in Uber and Square) and Chris Bruce (who sold an IoT company called Sproutling to Mattel).
The company sells its Helium Hotspot for $495. The device connects to users’ existing home WiFi networks and serves as a hub for IoT devices in the area to feed data back to Helium’s databases. By using low-power radio waves, the device provides a low-cost way to feed small amounts of data back to a central database.
Several initial partners will be using the product. Lime, the e-bike and scooter company, will use it for tracking its devices, Agulus will use it to collect agricultural sensor data and Nestlé will use it to track inventory in vending machines.
According to telecommunications giant Ericsson, there are over 1 billion connected devices in the world as of 2018, with that number projected to quadruple in less than a decade. Most of these connected devices rely on the lowest-level cellular connection, 2G.
“Everyday things that we use shouldn’t need cellular plans,” Haleem said in a press release.
For Multicoin, it’s the Austin-based venture firm’s largest investment to date. Tushar Jain, a Multicoin co-founder, told CoinDesk:
“I think Helium is the most ambitious and interesting vision I’ve seen in the blockchain space since ethereum itself.”
The Helium blockchain actually has two tokens: helium and data credits.
Data credits are only earned by burning helium. Once created, data credits can never leave the wallet that created them, except to be spent on the Helium network for transferring data. The cost of sending a data packet will always be the same in data credit terms, according to Haleem.
Helium hotspots mine helium tokens in various ways, such as by performing operations that secure the network and also by providing useful services. These operations include: proving that nodes are all located where they claim to be, proving the sequence in which data is transferred and proving the location of devices using it.
Helium also uses a delegated proof-of-stake (DPoS) structure where the nodes proven to be the most reliable over time verify blocks and earn some portion of inflation for doing so. Helium declined to estimate how long it might take for a hotspot owner to recoup the cost of a hotspot.
There’s no pre-mine and no supply cap on helium, according to the company. For the first several years, a diminishing piece of the monthly supply will go to Helium as the “founder’s reward,” and the company can use some portion of this as a supply for its first customers. The portion starts at 10 percent and diminishes annually.
Some 50,000 new tokens are minted every month but in order to use the network helium also has to be burned – so the supply will continuously be contracted, provided it has users. Haleem foresees a future where, when the network is mature, it should reach something like an equilibrium state where tokens are burned each month at roughly the point they are created.
“The usage of the network is what creates the economics,” Haleem said.
Lime will be an early partner, allowing the company to accurately track the location of its bikes. (Photo courtesy of Helium)
How it works
To join the network, a user needs to buy the Helium Hotspot, which is on sale now.
“We have limited quantity of these things going on sale,” Haleem said. “If you’re an early participant in the network, your rewards are outsized.”
The hotspot connects to a user’s wireless router. It then sends and receives data from IoT devices in the area. Each hotspot has a considerably greater range than a WiFi node, but the tradeoff is that it can’t carry as much data. That’s fine, though, for devices that just need to send small packets of data occasionally.
The company estimates that 50 to 100 hotspots can cover an entire city. Helium says it has good coverage on a current beta test in San Francisco with around 10.
As explained in the Helium white paper, the network operates in the unlicensed sub-gigahertz spectrum. The basic technology to send and receive this kind of signal is well-established and mature, with multiple vendors providing compatible equipment.
All communications use public key encryption. Helium’s protocol is purpose-built for its use case. All transactions occur on-chain and settle quickly thanks to its DPoS architecture. There’s no smart contracting language to create additional chaos on the network.
Nestlé’s ReadyRefresh product will use Helium to monitor beverage machines. (Photo courtesy of Helium)
The fight ahead
Asked if Multicoin would also be buying any hotspots, Jain said, “Let’s just say: Austin is covered.”
He went further, adding:
“The thing that I’m really excited about here is the connectivity being permissionless. You don’t need to create an account with anyone.”
If an IoT device is associated with a helium wallet, it can use the network anywhere it exists in the world, which Jain pointed out makes hardware creation much easier than the status quo, where different products have to be designed for different telcos everywhere a company wants to use them.
In fact, Haleem very much sees his company as taking aim at the telecommunications giants. Once it proves out the IoT use case, Helium wants to pursue others.
“This is like a blueprint for how you might deploy an LTE network or a 5G deployment,” he said. “You providing your neighbor with 5G makes more sense than the telcos doing it.”
Helium is not alone in this market, however.
Telecommunications giants have their Narrowband IoT products, for example.
France’s Sigfox is arguably the best-known startup for IoT devices with low data demand. It’s raised €277 million, according to CrunchBase, and similarly relies on public radio spectrum. Open Garden also allows users to share their internet access with neighbors in exchange for small, automated payments.
Helium sees a competitive advantage in its architecture, however, allowing the market to determine where to deploy and permitting users to send data with per-packet pricing, as needed.
“We view our pricing model as something like 1,000 times better than what the cell companies are offering.”source:coindesk.
Thai Crypto Scene Still Reeling From Top Exchange Bailout
Thailand’s vibrant digital asset scene was shaken earlier this month when its most popular exchange unexpectedly announced an imminent closure. The news left crypto traders dazed and confused and fearing a wider crackdown from the military dominated government.
A Dark Day For Thai Crypto
September 2 was a dark day for the crypto industry in the Asian nation as its most popular exchange told clients they had a month to clear out their accounts. The only explanation BX Thailand gave to its large customer base was that it wanted to ‘focus on other business opportunities’, which made little sense since the SEC registered exchange was clearly successful.
The panic that ensued caused the price of Bitcoin to trade at ten percent lower than the rest of the world on the exchange as Thai traders dumped digital assets. BTC price dropped as low as $9,000 on BX as fears of a failure to liquidate escalated.
Two weeks later and the situation is still no clearer. The company has yet to come forward with any real reasoning for the move and attempts to reach management have been unsuccessful according to the Bangkok Post.
Bitcoin Co. was launched in 2013 and a year later bx.in.th was created to provide a trading platform for crypto assets. The firm was a pioneer in the industry at the time and one of the first to become officially authorized by the Finance Ministry.
Speculation has grown over the snap closure and competing platforms suggest that BX may have been bamboozled by bureaucracy. Specifically, an unfeasible level of daily transaction reporting required by regulators.
Founder of Satang Corporation Co., Poramin Insom, suggested that the company just may not have been prepared for this epic workload or what it considered client privacy violations.
“BX [Bitcoin Co] may be worried about providing customer information and trading information to the SEC on a daily basis,”
Competition in the Kingdom has increased and rival platform Bitkub chief executive, Jirayut Srupsrisopa, suggested that this may have been the cause. However, this is very unlikely though since BX was already the market leader, and they do not usually just shut up shop because of a new exchange or two opening up.
President and chief executive at the ACIS Professional Centre, Prinya Hom-anek, believes more clarity is required from regulators.
“We need market surveillance like the stock exchange has. There will definitely be future revisions [of the digital asset royal decree]. This is a case study, watched closely by global actors, for the SEC’s next move,”
Yet again, regulation and excessive bureaucracy appears to have been the catalyst for another crypto closure. Thailand’s newly appointed military backed government has an unhealthy obsession with reporting and officialdom. The regime has recently implemented a country wide crackdown on the movements of its large expatriate community which has sent many of them packing.
If crypto exchanges are its next target, BX will not be the first to close its digital doors or seek friendlier climes.
Crypto Market And Bitcoin Holding Support: BCH, Litecoin, EOS, XLM Analysis
- The total crypto market cap is holding the main $250.0B support area, with positive signs.
- Bitcoin price could recover as long as it is above the $10,000 support area.
- Litecoin (LTC) price is eyeing an upside break above the $73.00 and $75.00 resistances.
- Bitcoin cash price is currently consolidating above the key $300 support area.
- EOS price is trading in a range above the $4.000 support, with bullish signs.
- Stellar (XLM) price is likely to make another attempt to surpass the $0.0600 resistance.
The crypto market cap is showing positive signs, while bitcoin is correcting. Ethereum (ETH), LTC, ripple, bitcoin cash, EOS, TRX, and stellar are likely to head higher.
Bitcoin Cash Price Analysis
Bitcoin cash price settled above the key $300 support area recently against the US Dollar. The BCH/USD pair even surpassed the $305 resistance and it is currently consolidating gains. An immediate resistance is near the $315 level, above which the price could even break the $325 resistance.
On the downside, the key supports are near $302 and $300. If there is a bearish break below $300, the price could start a fresh decline to $285 in the near term.
Litecoin (LTC), EOS and Stellar (XLM) Price Analysis
Litecoin price is holding the $70.00 support area and it is currently showing positive signs. LTC price may soon attempt to break the $73.00 and $75.00 resistance levels. The next important resistance is near the $82.00-83.00 zone. On the downside, the main support is near the $70.00 level.
EOS price climbed above the $3.850 and $4.000 resistance levels to move into a positive zone. The price is currently consolidating gains and it could continue higher if it breaks the $4.150 resistance. On the downside, a break below $4.000 might call for a correction towards $3.850.
Stellar price is slowly rebounding from the $0.0570 support area. However, XLM price is facing a strong resistance near the $0.0600 level. If there is a successful break above $0.0600, the price could start a strong recovery towards the $0.0625 and $0.0650 resistance levels.
Looking at the total cryptocurrency market cap 4-hours chart, there was a downside correction recently from the $260.0B resistance level. However, the decline found support near the $255.0B level and a connecting bullish trend line. It seems like there is a strong support forming near the $255.0B and $250.0B levels. On the upside, a break above the $260.0B resistance level could start another rise towards the $280.0B resistance area. Conversely, a break below the $250.0B support area might ignite bearish moves in bitcoin, Ethereum, EOS, litecoin, ripple, XLM, BCH, ADA, BNB, TRX, ICX, and other altcoins in the coming sessions.
Crypto Futures Giant Fight Continues: BitMEX Blames Binance For Copying (Take Two)
The plagiarism saga between BitMEX and Binance, perhaps the two most prominent cryptocurrency exchanges in today’s market, keeps going with full force. After Changpeng Zhao tweeted that a certain market maker has tried to attack their futures platform and no one got liquidated because of their “innovation”, citing their liquidation policy, the CEO of BitMEX, Arthur Hayes, responded immediately that he’d give him a Copy/Paste course for 51% of his equity.
BitMEX’s Arthur Hayes Strikes Again
Earlier today, the CEO of the world’s leading cryptocurrency exchange, Changpeng Zhao, revealed that their relatively new futures platform was under attack by a market maker. Fortunately, however, no one got liquidated.
Zhao revealed that the reason for this is that they “use the index price (not futures prices) for liquidations,” calling this methodology their “innovation.”
What followed was a wave of comments that this is, by no means, Binance’s innovation as BitMEX has had its liquidations tied to the index price for a long time.
Naturally, the CEO of BitMEX, being the persona that he is, didn’t wait for too much to comment on the matter.
Zhao responded to his tweet, saying that his tweet was, indeed, misleading “in the way it was written.” He explained that he didn’t mean to call the index price liquidation methodology their innovation.
Not so long after that, the official Twitter account of BitMEX posted that it’s “great to see traders on other exchanges being protected and benefitting from our innovation.” Regardless of the intention, this tweet definitely seems particularly targeted.
How It All Started
The entire back-and-forth tweet exchange between two of the most prominent individuals in the entire cryptocurrency space, namely Arthur Hayes and Changpeng Zhao, began earlier this month.
As Binance announced the launch of two futures testnet platforms and acquired a crypto-asset derivatives platform, intending to launch cryptocurrency futures, options, and other derivatives, it also created a separate page on Auto Deleveraging.
As it turned out, however, the content within that page was entirely plagiarized by the same page which already existed on BitMEX.
Back then, Zhao said that he is sorry about this mistake and that it has been missed in the due-diligence process before the acquisition of the derivatives platform.
Regardless of whether or not the face-off between Hayes and Zhao has any actual implications on the market, it’s definitely refreshing and, as one user had pointed out, it takes some of the attention away from the constantly ongoing Bitcoin v. Ethereum debate.