Helium Explored: How often do Helium HNT miners get rewards? How much do you mine per day?
Why Are HNT Rewards So Low & What Determines How Much HNT You Mine?
How much HNT will I earn?” – Before we answer that (and I’ll show you how to make a reasonably accurate estimation by the end of this), let’s dig in to the tokenomics of the Helium ecosystem. Now, I love to understand things from a fundamental level, so we’ll start with the very basics, then work our way up to answering that first question. You can skip to the end if you’d like, but reading and understanding this idea will give you a significant advantage in your current and future Helium deployment choices.
Helium’s Token Economy
First, what is “tokenomics”? Believe it or not, we have to go back to 1972 to fully understand what tokenomics are. The well known Harvard psychologist B.F. Skinner is credited as coming up with the idea that a “token economy” could shape and incentivize behaviors. Tokenomics is the study and practice of using the economic incentives of tokens (as opposed to fiat currency) to direct patterns of behavior.
In the Helium Network, our token is called an HNT, or Helium Network Token. This token is created by the blockchain, then distributed in three generally equal sized buckets. Those three buckets are Proof of Coverage, Investors, and Data Transfer. For now, we don’t need to worry about the second and third buckets, as they don’t contribute to how we currently earn HNT. Let’s focus on the first bucket, Proof of Coverage. Proof of Coverage, or PoC, is what our Hotspots do automatically when we plug them in and give them an internet connection. A Hotspot will literally prove that it’s providing IoT (Internet of Things) radio coverage through the PoC system.
How do Helium miners work?
Here’s how it works: A Hotspot will create a Challenge on its own a few times a day. A Challenge is like an envelope of envelopes, each with instructions inside it. At each step of the challenge, the next envelope is opened and a new set of instructions is read. Once created, the Challenge is then randomly assigned to another Hotspot anywhere in the world. The Hotspot who receives that Challenge is known as the “Challengee”. The Challengee opens up the Challenge, reads it, and then transmits out a radio Beacon. The radio Beacon is received, or Witnessed, by surrounding Hotspots.
The Witnesses read the Beacon, then report back that they received and read it to the original Challenger. The initial Challenger submits the whole package to a group called the Validators, saying something like this: “Hey, my name is Nik. I constructed a Challenge and sent it to Billy. Billy received my Challenge and then Beaconed it out, and Sammy, Rachel, Lucy, and Frank all reported hearing that signal at XYZ signal strength (RSSI).” Substitute Hotspot names like Lucky Teal Starfish (or whatever) for the human names, and you have a pretty good idea of how the PoC cycle works.
The Validators check everybody’s work to make sure no one is gaming and all the signals fall within reasonable bounds, and then assign each player an amount of HNT equivalent to the value of work provided in relation to the rest of the Network. In general, constructing a Challenge is responsible for about 5% of your earnings. Transmitting a Beacon is about 20% of your earnings, and Witnessing the Beacons of other Hotspots accounts for about 75% of your earnings. That last point is key: Witnessing represents approximately 75% of your earnings! We’ll dive deeper into how to optimize for that in other articles. For now, let’s stick with the basics. So, how do you figure out how much HNT you should earn? You *could* do a bunch of crazy math and get ultra deep in various formulas, or…
Estimating your Helium Mining Rewards
The easiest way is to look at Hotspot earnings around your location, ideally over a 7 day period. In general, you’re likely to earn the average of the nearest 10 Hotspots. Yes, it’s as simple as that. No, it’s not a guarantee, but it’s an excellent start when it comes to estimating what a location will produce as of that moment. To further refine your estimate of earnings, you can begin to weight your proposed placement against the local average, minimums, and maximums. Look at the location each nearby Hotspots occupies. Is it higher than yours, or lower? Does it have more clear Lines of Sight to other Hotspots than yours, the same, or less? How high is their antenna? Finally, what is the local maximum? When I say “local”, typically I’ll go out between 1 and 5 kilometers to find this. The local maximum tells you what you’re likely to max out at. It’s NOT a guarantee you’ll earn that much, but it’s pretty safe to bet you won’t earn more than the local max unless you’re doing something extraordinary.
Extraordinary placements are orders of magnitude higher than nearby hotspots. As an example, if you’re on flat ground and most of the antennas around you are asserted to be at 9 meters above ground, an extraordinary Hotspot placement would be 90 meters above ground, on, say, a cell tower. Typically, that Hotspot will earn the local high.
Where do you find what the local earnings are? Helium Explorer allows you do this for free, though it can be a slow and painstaking process as you individually click through each nearby Hotspot and get its 7 day earnings. Hotspotty is currently free (mid-Feb 2022) but will soon charge a small fee to access their database. Hotspotty makes it easy to see the local max as well as the average 7 day earnings for your region. HeliumVision is a paid app ($5/month) that allows you to easily see the last 24 hours of HNT earnings around you; that can be the fastest way to quickly get an idea of what you’ll earn.
Finally, you can see if the Hotspots in your location are earning above or below the global average. You can calculate the global average with the following:
2,500,000 (total HNT distributed per month) divided by Number of Hotspots online the Network multiplied by 26% (amount of HNT assigned to Proof of Coverage) divided by 30 (number of days in a month).
As of today, Feb 10th 2022, the global monthly avg is: 2,500,000 / (562,460 * .86 = 483715.6) (percentage of hotspots online) * .26 (amount of HNT assigned to PoC) divided by 30 days per month = .0447 HNT/day
So, as a general rule of thumb, figure you’re going to do slightly above average (because you’re taking the time to read this and are likely to be motivated to do a better than average job), look at your local earnings, figure out what are likely to make, and go from there. If you want to learn how to choose the best locations, use the best tools, and find the best equipment, I offer top notch training and consulting on how to optimize Hotspot earnings. I’d love to help you improve as you continue on your Helium journey!
