How does Helium work?

Helium is a decentralized network that uses blockchain technology to create a secure, low-cost, and long-range wireless network for the Internet of Things (IoT).

The Helium blockchain is powered by a new consensus algorithm called Proof of Coverage (PoC). This algorithm rewards users for creating and maintaining a secure wireless network by providing coverage to IoT devices. The Helium Network consists of two main components: Hotspots and Miners.

Hotspots are devices that broadcast the Helium Network’s signal, allowing IoT devices to connect to it. Miners are users who run specialized hardware that verifies transactions on the Helium blockchain. In exchange for their work, miners receive rewards in the form of Helium tokens (HNT).

The PoC consensus algorithm works by rewarding Hotspot owners for providing coverage to IoT devices. When an IoT device connects to a Hotspot, it sends out a signal that is received by other nearby Hotspots. If the signal is strong enough, then the Hotspot owner will be rewarded with HNT tokens.

The more coverage an owner provides, the more HNT they will receive as a reward. The PoC consensus algorithm also incentivizes miners to keep the network secure by verifying transactions on the blockchain. Miners are rewarded with HNT tokens for their work in verifying transactions and keeping the network secure.

This helps ensure that all transactions on the Helium Network are valid and secure. Overall, Helium is an innovative project that uses blockchain technology to create a secure and low-cost wireless network for IoT devices. By using its unique Proof of Coverage consensus algorithm, it incentivizes users to provide coverage and keep the network secure while also rewarding them with HNT tokens for their efforts.