Helium Coin is Not a Stock. So What is HNT?

October 17. 2021. 7 mins read

In today’s era of 140 characters or less, people think a single-sentence critique is a sufficient way to challenge someone else’s thesis. “Boy, that didn’t age well,” they’ll say. If they completely disagree with everything you said, you’ll get a similar intellectually lazy response. “You’re gaslighting everyone,” or the classic “okay boomer.” The latter happens to be a favorite admonition of the crypto cult, a group of people who see cryptocurrencies as only going upwards, and whose vocabulary lacks the phrase “intrinsic value.”

Crypto “thought leaders” are sinking deeper and deeper into the mire, refusing to simplify the topic for the rest of the class who “just doesn’t understand Web 3.0.” Instead, they obfuscate things behind more layers of drivel. From one of the biggest advocates of the “creator economy:”

Crypto, as mentioned in both pieces, can be viewed as a techno-populist movement to push for reform against centralized incumbents that wield monopsony power. Optimizing for user ownership, autonomy, and enfranchisement is how we resolve this legitimacy crisis.

That’s great you went to Hahvud, but can you tone it down a bit for the commoners? It’s hard to decipher anything useful from that babble, except that this thought leader has become detached from the investment thesis. We’re not investing in companies because we believe the working class isn’t being treated fairly and that urgently needs to be corrected per the ruminations of Karl Marx, we’re investing to show a return on das kapital we worked so hard to accumulate. Period.

One thing you learn very quickly as an investor is how easily you can be proven wrong. That’s why it’s important to never outright dismiss even the most superficial criticisms. You constantly need to revisit your assumptions to make sure things haven’t changed. When someone said our article on Helium “hadn’t aged well,” we decided it was time for a second look.

What is HNT?

Click for company website

A few years ago, we published a piece titled Helium – Solving the IoT Connectivity Problem. The most notable piece of news since then was probably Mr. Musk’s move into IoT, something we covered in a piece titled SpaceX Takes on the Industrial Internet of Things. As for Helium, things would appear to be taking off based on their original value proposition which was:

  • Sell an IoT connectivity device for hundreds of dollars
  • Reward the people who operate these devices so they are incented to buy them in the first place and continue operating them
  • Allow IoT developers access to this connectivity which only requires 50 to 100 devices per city for complete network coverage

Update 02/19/2022: Helium has raised $200 million in Series D funding at a $1.2 billion valuation. This brings the company’s total funding to $364.8 million to date.

Here’s our conclusion from several years ago:

If we shell out $495 dollars for a device, what’s the payback period? Until we start seeing some information trickle in about how beneficial it is to operate these devices, how can we tell how strong of an incentive this is? While we wait and wonder, others aren’t so hesitant. Helium sold out of their devices for their coming launch in Austin and the Helium Network U.S. nationwide roll out is scheduled to happen Q4 2019.

A key piece of missing information was what sort of reward device operators were expected to receive. That information is now known. The reward is a cryptocurrency called Helium, and the price of that cryptocurrency has taken off.

A chart showing the price of Helium token HNT over time
Credit: Coinbase

In the past 16 months, the reward for operating a Helium hardware device (mining Helium) has increased +7,890% giving the “market cap” of this token (circulating supply of coins X price of coins) a value of $2.2 billion. No, that’s not the value of the company called Helium we wrote about. It’s the value of a token propped up by greater fools cryptocurrency speculators. You may disagree with that, but you only have to look around to see the blind mania driving the price of cryptocurrencies like Shiba Inu Coin (market cap $9.8 billion), a token that’s meant to mimic Dogecoin (market cap $30.5 billion), a cryptocurrency that’s literally a running joke.

How many of these Robinhood weekday warriors driving meme stocks to the moon actually understand the underlying businesses they’re investing in? How many holders of Helium understand the underlying business it supports? This is an important point of contention. It appears that the Helium coin exists solely as a reward mechanism for miners, but derives its value from speculators.

If business models like software-as-aservice (SaaS) are ascribed a market premium for their simplicity, then complex business models should be discounted. If that’s true, then Helium should be at least half off. Trying to wade through all the documentation that accompanies this platform is no simple task. Here, they describe what happens when the need for mining this $2.2 billion coin simply stops 50 years from now.

Using Net Emissions, the blockchain would monitor how many HNT were burnt for Data Credits in a given epoch and add them to the number of HNT to be minted that epoch. For example, if 10 HNT were burned for Data Credits in an epoch, the system would mint 10 more HNT than were expected in that given epoch.

Credit: Helium

Enough already lads. Let’s get back to basics. How does the value of the HNT token relate to the value of Helium as a company, other than as a reward for people who operate Helium hardware devices? All this “passive income” people are being promised will quickly vanish if the price of this token falls as sharply as it has risen.

The People’s Network

As with most cryptocurrency projects, there’s an element of “us against the man” marketing. Now labeled “the people’s network,” Helium has grown as fast as one would expect when rewards for adoption increase by +7,890%. Excitement is in the air. There is no longer one device provided by Helium, the company. There are now more than a dozen devices you can buy from various vendors and hundreds of YouTube videos comparing them, including the use of additional hardware like antennas.

A list of supported hardware devices for Helium
Credit: Helium

In other words, things have become far more complex since the last time we looked. And complexity equals more risk for investors, not to mention the end consumer. Helium says, “please do your own research as a vendor listing does not equal endorsement or recommendation.” Will a proper industrial IoT enterprise implementation architect feel comfortable sending data to all these different devices which aren’t endorsed by the platform provider? (More on this in a bit.) Speaking of which, this brings up a very obvious question. Just how many customers are paying to use this network? We’ve seen plenty of “build it and they will come” business models fail miserably. Attention seems to be centered more around mining the rapidly appreciating Helium token and less on how useful the network is proving to be for any Fortune 1000 reference customer.

A section of the Helium website titled “ecosystem” lets one filter on users of the platform. These are customers who will pay for access to this decentralized network and create an actual business around it. We’re not seeing a lot of notable names in that list, nor any detail as to actual usage. However, the Helium blog talks about signing “roaming” agreements where other networks can use the helium network seamlessly for solutions that are already deployed. That’s great, but still doesn’t prove us with any assurance that meaningful revenues are being produced from usage of the Helium decentralized wireless network. That missing data point keeps us from knowing how much traction Helium the company is realizing.

The Good, the Bad, and The Ugly

As the HNT price increases, more people buy Helium tokens thinking that price appreciation translates into an asset worth owning. In that respect, speculators are helping the network grow faster than it ever could otherwise. The use of a cryptocurrency automagically solves the problem of miners being given too many rewards today.

An article headline showing "How I made S10000 providing part of Helium's IoT network. Credit: Google
Credit: Google

As more miners come online, the rewards will decrease as they’re shared among more people. Once the payback period for a mining rig reaches a certain duration – perhaps measured in months – people won’t want to wait that long to be paid back for the device. The company could eventually resort to giving the devices away, which would further increase coverage. In principle, this sounds like a good business model. But there are things that can go terribly wrong if two fundamental assumptions prove to be false:

  • The underlying technology must be foolproof and secure in every respect. None of this “someone ran away with $100 million” stuff.
  • The HNT token must maintain a minimum monetary value. We don’t know what that value is, but right now it’s being assigned by speculators.

One question we have which we can’t find an answer to surrounds the need for the cryptocurrency in the longer term. It must be possible to operate this business model without the need for a volatile cryptocurrency to underlie the entire operation. Maybe that’s where they’re going with this. The cryptocurrency simply serves to accelerate adoption. Even if HNT ends up crashing, they can just pay a fixed rate of compensation to anyone with a device based on the simple measure of uptime. Again, we’re left wondering about the role of HNT in this whole thing aside from getting hundreds of thousands of people to quickly build a decentralized network that needs to generate a profit once the token excitement runs out.


It remains to be seen how well the Helium utility token ages. A good scenario would be that it stabilizes at a certain price point that assures an equilibrium across all constituents. IoT providers will have reliable connectivity at a fair price, and the providers of that decentralized wireless network are incented to continue providing it. Then, when Starlink is fully operational, let’s hope Helium’s decentralized network doesn’t get displaced by Sir Elon of Musk. The entire shebang may be encompassed by a great deal of uncertainty, but one thing is for sure. Only time will tell how well Helium ages.


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  1. Your analysis is useless and you refuses to educate yourself relying on the boomers favorite phrase “show me proof”. You want others to give you all the answers and you dismiss everything that isn’t explained perfectly to you. This is a byproduct of the world you grew up in, thinking your assumptions about the world are correct until proven otherwise. Shows a lack of real education, something else boomers are known for with the rise of the American paid useless university Education. When you’re retired and your savings has dwindled because your assumptions about the world are wrong, you’ll be thanking god for the UBI so you get so you can eat.

    1. So, this individual takes offense to the fact that we’re calling out people for being intellectually lazy, regardless of their generation, and then proceeds to demonstrate exactly the same sort of behavior that we’re condemning. They then question the education of the person who wrote the piece – as if they have any idea of what that might be – then further categorizes the author of the piece into a generation which she does not belong to, then proceeds to stereotype said generation in a way that can only be described as ignorant. Perhaps the worst part of this diatribe is the suggestion that investors ought to just invest in anything sight unseen, and shouldn’t demand that stakeholders sufficiently explain the investment thesis. If you’re a boomer’s worst nightmare, they don’t have much to worry about.

      Anyways, the article is about Helium. Did you have anything of value you wanted to add to the conversation? Or just a drive-by condemnation and now you’re off to find the next victim?

    2. You are right about one thing though. The American education is becoming useless. Just ask poor Yeonmi Park about that. She came here from the DPRK to attend Columbia University and had nothing good to say about the experience because the stench of American politics prevented her from actually learning anything, or being able to question anything without someone complaining. So, in honor of people like Yeonmi, we’re going to continue to question everything, and we won’t be silenced by people such as yourself.

  2. I’ve been following Helium for a couple years and find it to be a fascinating company/ approach to IoT with decent potential for success. Plenty uncertain, of course, especially with Starlink on the way. I’ll add a few bits of info that might help readers understand how the Helium system works. HNT token is both a reward for miners and the asset everyone uses to pay for using the network (HNT buys data credits which have fixed price in USD), that balance is expected to create stability in price of HNT and more network usage should drive demand for HNT.
    Another important element of the system is that it tests coverage and to be a profitable network node you need to be providing coverage that is not redundant, so in theory, new nodes will continue to be financially appealing until everywhere with IoT demand is covered. Network nodes are kind if like miners for other crypto but recently Helium split some network function out of nodes so its not an identical system to, say, bitcoin.
    The past 12 months have seen a lot of enterprise investment in the system,both in nodes/coverage and in devices and network usage. In kind of out of the loop on it now but I think the Helium website has some info on these users and “The Hotspot” Helium podcast was helpful for me to learn about the most recent developments.
    I think in the long run the network nodes will be run mainly by large companies not individuals just like botcoin mining has seen consolidation.

    1. Thank you for the comment Paul! Something that appreciates over 7,800% in 16 months has a long way to go before it achieves stability. Doesn’t sound like we need demand driven any further because speculators already have that part sorted. For us to see that this business model works, we’ll need some usage metrics. The company isn’t providing these metrics that we can see.

      Our previous piece touched on the value proposition and underlying technology you described: https://nanalyze.com/2019/08/helium-iot-connectivity-problem/

  3. This article is missing some important info. It’s missing a lot of Helium’s biggest selling points. First off it doesn’t emphasize that Helium is significantly cheaper to use then normal Telecom, that was the whole point. Now instead of buying a IoT tracker for your car with a $10/month network subscription, you don’t have to pay any subscription fee. The lifetime network cost is baked into the one time price of the tracker, because it’s about 100x cheaper to use Helium than normal Telecom. Also Starlink isn’t an issue for Helium at all. Starlink is a centralized Telecom with HUGE overhead compared to Helium, they’re using satellites for Christ’s sake that’s expensive. Again, the cost to use and run the decentralized Helium network is so much cheaper.

    Also another thing not very empathized in this article, Helium isn’t trying to be competition at all, they want everyone to use their significantly cheaper network and are offering roaming partnerships. They already have ones with Actility and GigSky. Article didn’t even mention that Helium has now started a 5G network and not just IoT, that’s huge! If they eventually get a roaming partnership with Verizon or Boost Mobile, network usage and HNT explodes! Remember to use the Helium network you need to buy their HNT coin to exchange it for data credits. HNT Helium token has an actual function, unlike meme coins. I agree some speculation has been driving up HNT price, but HNT is starting to now be propped up more and more by actual companies using the networks, as it was always intentioned to be.

    The Helium website lists how much data credit/HNT is being used a month. As of right now the website lists 339.22 billion data credits have been used in the last 30 days. That number has been steadily increasing as more people/companies use the network. So yeah, we have a metric to see the networks actual growth. It’s not listing specific company network usage, but we do have an overall metric. Also just look up whose using Helium and they are adding so many companies to their network. This past week alone, Volvo and Cisco are now using the Helium network for their manufacturing tracking. Read up people, Helium is a GAME CHANGER for the internet.

    1. Thank you for the comment Karl. We did cover the value propositions in a prior piece: https://nanalyze.com/2019/08/helium-iot-connectivity-problem/

      That’s great there’s a compelling bull thesis but the company still needs to show that large enterprises are willing to pay for what they’ve built. When you say “HNT is starting to be propped up more and more by companies using the networks” we’d like to see proof of that aside from the press releases and broader data metric. If companies are not willing to use this network, and pay amounts of money that constitute meaningful revenues, there’s no business here. That is a missing piece of the puzzle. Is this usage resulting in meaningful revenues? That information won’t likely be released until there is an exit event. It does sound good on paper, but that and $5 won’t get you a coffee at Starbucks unless you see hard numbers.

      Since the value of this speculative token has become completely detached from the business, there’s nothing for retail investors to do until Helium has an exit event. The token simply acts as a transaction facilitation mechanism with data credits tied to USD. On the mining side, it’s what ensures people who host all this bandwidth are rewarded, a reward that’s increased over +7,800 in the past 16 months. Getting involved with something that’s being largely driven my speculators is not anything a risk averse investor should even consider.

      So, until this company has an exit event, there’s not much point in getting too excited – unless you’re a venture capitalist who owns a piece of equity. Utility tokens are not an asset class, they’re not backed by any equity, and people don’t seem to realize that. There are many things that can go wrong here and we’ve seen enough ICOs fail to know that things may not pan out as planned.

      We had to delete your link because we only allow internal links in our comments section. Helium’s website does a great job explaining the bull case on offer if anyone wants to research that further.

  4. I agree only time will tell if Helium succeeds with mainstream adoption, but man it has a lot of things going for it and has only been heading in a positive direction so far. Every week more companies announce they are now using the Helium network. I sure do hope it succeeds, because it will benefit society. Helium’s main mission is to drastically reduce the cost of internet connection, and that helps everyone.

  5. I found this article when it was first released, I have done my own research and come to my own conclusions. This article only touches the surface in what helium are capable of, so much information has been missed, it’s rather miss leading. This article has outlined alot of negative what ifs, what about the possitives? It reminds me alot of the first days of the internet startups, many negative what ifs were spoken of and some people invested in brick and mortar businesses, others in the .com startups, which of those actually prospered? People should do their own research and come to their own conclusions, don’t all investments come with a risk?

    1. An article is hardly misleading when it points out fundamental problems associated with an “investment” that nobody else seems to be raising. Want to read the bull case on Helium? You can find dozens of articles attempting to explain why a cryptocurrency with no intrinsic value should be trading at an $4.4 billion market cap. Here at Nanalyze, we acknowledge the risk associated with tech investing by looking for red flags in every single opportunity we come across. We believe that you can maximize the Sharpe Ratio (the risk vs. reward tradeoff) by avoiding land mines. The money you save by not stepping on a landmine will exceed the missed opportunity of not maximizing every single upside opportunity there is. In other words, we’re happy to miss out on a few winners while avoiding several dozen duds. And our track record of pointing out duds speaks for itself.

      Are you trying to say that the cryptocurrency that’s appreciated +15,883% in the past 16 months somehow reflects the value of the company it is associated with? Because we’re having a real hard time seeing how a hyped utility token relates to the potential of the underlying business.

      You bring up the dot-bomb era and fail to mention just how many investors got absolutely smoked when that bubble burst.

      Your last sentence is spot on. Everyone needs to make decisions based on their own convictions, and we should always be looking at the relative risk of assets we choose to invest in.

  6. To compare Helium to Shiba inu and Doge then imply they’re similar is misleading, that’s how I read the article. That’s my only gripe with the article other then it lacked other important information about the Helium network, though I found all I needed from other sources.

    1. Thank you for coming back and commenting Lance! What all three cryptocurrencies have in common – Shiba, Doge, Helium – is that they’re largely being driven by speculators. Helium is different from the other two because it’s a utility token that didn’t start out as a joke with no useful purpose. Our main point of contention is the major disconnect between the value of the Helium token – and its $4.4 billion market cap – and the value of the company with the value proposition – Helium. The Helium token represents no equity in the underlying business, and most speculators driving the price up probably aren’t recognizing that.

  7. My previous post I was actually referring to failure’s of businesses in the dot.com era, both brick and mortar or web based. Many will fail and others will succeed, I personally do not think crypto fail altogether but the majority of them will.

  8. The thing is even if we jump in now,we can still make a decent ROI before the bubble bursts due to speculators pushing up the prices.In a 2 weeks you can pay off your miner and make off with huge profits which will continue as passive income even if the bubble bursts.

  9. I think you missed something related to the value of the HNT token. That is that in order to use the network, customers need to buy and burn HNT, which are converted to non-fungible Data Credits (DC), which are then spent on data transfer. This does two things. 1) It creates a demand for HNT beyond crypto speculators. 2) It allows hotspot operators to continue to be compensated after the last new HNT is mined. This is done by recycling the spent DC back into HNT that are distributed as network rewards while maintaining the 223M HNT cap.

    So does HNT have intrinsic value and what is it? This is one of the rare cryptos where I would answer yes. Why? You need to look at the HNT distribution split over time. At the beginning, most of the HNT rewards Proof of Coverage (POC), with that gradually shifting to rewards for actual data transfer. Helium Inc gets a constant 20% for running the business and Validators get a constant 10% in reward for doing all the computations that keep the blockchain running. To see the potential intrinsic value, you need to look at the validators. Validators are assigned work and compensated via Proof of Stake (POS).

    Lets look 50 years into the future after the last new HNT was mined and assume HNT has reached some kind of equalibrium and see if we can deduce what that equilibrium may be. Lets assume that 50% of the total 223M HNT supply is staked. What would be the amount of return necessary to make validating worthwhile? Maybe a 5% APY? So 5.575M HNT would need to be recycled to validators. Since they are getting 10%, that means 55.75M need to be burned annually to be spent as DC. So the value is going to depend on how much revenue the network can generate. If their is demand for $557M of network traffic, that makes each HNT worth $10. If there is demand for $5.6B in network traffic, HNT is intrinsically worth $100. Obviously you can tweak those assumptions up and down to arrive at different values, but that is the valuation model. If network use is continuing to grow then a growth premium would also need to be added.

    In the past 30 days, $5.2M in DC have been spent. Some of that is the $10/device fee charged to assert a location. There are 90k new devices on the network, plus some have been moved and locations reasserted, so lets assume that was $1M of the spent DC. The other $4.2M is network traffic, so about $50M annualized. Could network traffic grow 100 fold? I think its possible.

    1. Thank you for taking the time to articulate yet another bull thesis for an extremely risky utility token. One thing we didn’t miss is that HNT is being driven by speculators. The explanation you give wouldn’t be understood by half our readers, and people do not want to “invest” in something they don’t understand, certainly not in some risky utility token being driven by speculators. You can look 50 years in the future all you want but we’re looking at it right now. Nobody who is risk averse is going to touch this mess. Period. The value of the token – $4.5 billion – has become detached from the value of the underlying business. There’s also concerns around security, something referred to as the “trilema.” Decentralized networks can only provide two of three benefits at any given time with respect to decentralization, security, and scalability. We’ve heard the bull case 100 times, what we don’t often hear are people looking at HNT with a critical eye. We’ve done that, and we want nothing to do with it in this current manifestation. If HNT represented equity in the underlying business, this would be an entirely different conversation. It doesn’t. Thank you for the comment.

  10. I’m curious what the article writer thinks of the recent Dish Network/Boost Mobile partnership with Helium? In my mind that hugely validates Helium’s future and everything they’ve been working towards. Dish Network clearly see’s the value of Helium and will offload part of their 5G traffic onto the Helium network since it’s cheaper to use then their current arrangement with renting space off AT&T’s network.

    Since this will give Boost Mobile a huge financial advantage over all the other Telecoms, since they have less overhead using Helium, it’s not crazy to say the other major telecom may use Helium as well in the future to offload part of their 5G traffic and keep up.

    It’s a huge step towards mainstream adoption.

    1. Yes, we’re aware of all the partnerships being announced. We’re more interested to hear about metrics regarding usage. Check out the crypto trilemma. We’re particularly interested to hear about how enterprise customers feel regarding the ~20 different hardware devices being used within this network, all from different vendors. Helium says “please do your own research as a vendor listing does not equal endorsement or recommendation.” That sure isn’t a big vote of confidence for this network that’s being cobbled together. At any rate, you’re talking about the underlying business. We might be interested in digging into that a bit more. However, the utility token that’s attached to the business – that represents zero equity whatsoever – and is largely being driven speculators who haven’t a clue what they’re dabbling in, that’s another conversation. We can’t confuse price appreciation of a speculative utility token with the quality of the underlying business.

  11. But as I explained, HNT does represent a 10% stake in helium network revenue, not just in 50 years (I used that timeframe because you did), but today. Today the mining of new coin complicates the math, but to make a long story short, newly mined coin have an inflationary effect, devaluing the currency, but that is offset by a combination of demand from crypto investor speculation and the knowledge that the inflation is declining over time with a defined endpoint. But for validators, they know they will get 10% of newly mined coin on top of the recycled burned count from DC network revenue, so they are somewhat insulated from the inflation.

    My case was not bullish, it was just demonstrating the intrinsic value model. Based on current network revenue and zero revenue growth, HBT is worth about $1 intrinsically. So anyone who believes it is worth the current price or more is putting faith in a very high growth. So yes, it is extremely speculative.

    But so was investing in Amazon 20 years ago when they had never earned a profit. The question here is, is this Amazon, pets.com or something in between?

    So no, HNT owners don’t own Helium Corp, but they do collectively own 10% of the helium network revenue through staking with a validator (while Helium Corp owns 20% and hotspots own 70%). I’d compare this to the iStore, where Apple gets about 40% of revenue and app makers get about 60%. Apple then turns around and pays a hefty chunk of what they get to Amazon for hosting the iStore on AWS. AWS (equivalent to validators) and the app owners (equivalent to hotspot owners) don’t have equity in Apple, but they still profit from iStore revenue.

    1. Today the mining of new coin complicates the math

      You’re right about that. The entire explanation you’re giving here is complicated, and you seem like an articulate person. This hyped up mess of a utility token isn’t going to be touched by any investor who believes in capital preservation. So the utility token that’s priced at $40 has an intrinsic value of $1. You’re damn right it’s extremely speculative. And don’t start using Amazon stock as a comparison. As if the two are remotely similar. Amazon is a stock with equity in the underlying business. Helium utility token represents zero equity in the underlying business. Apples and oranges.

      Yep, you’re right about that. Helium owners don’t own Helium Corp. We also know absolutely nothing about the revenues Helium the company is bringing in. And you have not addressed the security concerns we’ve raised either. This risky mess is not something any risk averse investor wants to – in your words – speculate on. We’re investors, not speculators.