You may not be aware, but there’s a race going on to shape our future.
To control how we interact with our environment in new ways that could make us safer, smarter, and more productive.
Not satisfied with controlling access to our phones and computers, the telco giants want to dominate connectivity for billions of devices and control data collected from our interactions with the everyday world.
We lost the race for phones and computers to the telcos, and now they’re coming for control of everything else.
Centralized vs. Decentralized IoT Network
So what’s the alternative? If you want to build a wireless network optimized for long range and extended battery life for devices on the network, how would you do it?
Fundamentally there are two approaches: centralized vs. decentralized.
The centralized approach requires deploying infrastructure: either passing the costs/burdens without adding anything in return onto customers or attempting to become a mini-telco. For those who don’t feel customers should worry about deploying, maintaining, and having to support wireless infrastructure then the remaining choice is to become a mini-telco. The problem: it will take a long time to build and place towers and will require huge amounts of upfront capital. Not only for initial implementation, but also for operations, maintenance, and support. But even if ‘successful’ what have you really accomplished? You’ve become a mini-telco and at that point are you really better than an actual telco?
A decentralized approach would involve flipping the existing model on its head similar to how Airbnb became the largest accommodations provider without owning hotels. Airbnb built a community of hosts that provide spaces, and guests who rent the spaces.
For a decentralized wireless network, a two-sided market with a community of builders who provide wireless services on the supply side, and users of the network on the demand side, prevents past mistakes of telcos and ensures community ownership of the network.
However, in this new approach how would you motivate builders to participate in laying the foundation for wireless infrastructure?
In other words, what’s in it for them?
Solving the Cold Start Problem
In a decentralized wireless network, solving the cold start problem needs to be addressed with well-designed hardware and powerful incentives.
In addition to the design, the hardware (let’s call it a hotspot) needs to consume minimal amounts of power, and be simple to set up.
The incentives need to be designed in a way that grows the supply side of the market independent of the actions of the demand side. In other words, builders of the network should receive rewards both for contributing to the network AND usage activity on the network.
If builders were only rewarded when a device connected to the internet through a hotspot the cold start problem would persist.
Users will only start to seriously look at the network once there was sufficient coverage (e.g., how willing would you be to purchase a cellphone knowing coverage would be based on the number of cellphones sold?). From a builder’s perspective, if their only reward is based on fees collected from devices then they’ll hold off deploying a hotspot until there’s lots of devices built for the network.
So how to reward builders independent of usage just for providing wireless coverage in a way that is automated without any centralized authority?
Blockchain in the Real World
Using blockchain would allow you to create an incentive system to reward builders in two ways: first, by providing wireless coverage the builder could earn mining rewards; and second any time an IoT device connects to a hotspot to transfer data to the internet the builder also earns.
Blockchains are far from perfect and after 10 years as usage and value has grown limitations have emerged including the formation of mining pools, the amount of power needed for consensus and proof of work protocols, and the censoring of transactions.
To avoid replicating these mistakes you’d need new protocols that could contribute useful “work” to the network, were energy efficient, prevented censoring of transactions, and could scale to handle a high volume of microtransactions.
By building new protocols you could use blockchain as the underlying technology for the reward system to ensure the network was truly decentralized, owned and operated by the builder community and ultimately avoid the past mistakes of telcos.
Besides correctly incentivizing all participants to act in the best interests of the network, for a community-owned, decentralized network to be successful it needs to run on truly open protocols and hardware. The infrastructure — from the wireless modulation scheme to cloud routing — has to be open for enterprises to trust the network and the motivations of the operators. Proprietary technologies will only further fragment the infrastructure, cause more complexity, and ultimately negatively impact progress.
The Race Isn’t Lost. Yet.
Helium is taking a decentralized approach to building a new kind of wireless network: truly open, private, and community owned.
This community-built and owned network will deliver ubiquitous and affordable wireless coverage that lets us interact with our world in ways never before possible.
A new class of devices and applications built on this network will emerge with the potential to solve an unlimited number of problems including protecting communities from wildfires, finding lost pets miles from home, or identifying food or water sources instantly.
We lost the race for phones and computers, but the stakes are even bigger for everything else.
And we can win.
Join the race and contribute to something bigger.
To learn more about our decentralized approach towards networking, including how to become a builder, visit here.