HNT is the native cryptocurrency of the network. It's used to reward participants in the network, called Hotspots, for providing and validating wireless coverage.
A brief history
Launched in July 2019, Helium is an open-source blockchain network designed to power the Internet of Things (IoT), with the goal to enable global wireless connectivity. Helium technology enables the communication between the devices, while the system sends data across the network nodes. The nodes that compose the network are known as Hotspots. These Hotspots are devices that need to be purchased from the Helium website and are responsible for simultaneously mining HNT for building and securing the Network. Miners/Hotspots produce radio frequencies by connecting to the network, while Helium’s Proof of Coverage mechanism validates Hotspot locations. Hotspots are able to provide public network coverage through LoRaWAN- a media access control layer protocol that has a cloud component to which platforms like Helium can connect. Helium is one of the biggest LoRaWAN networks with over 25,000 Hotspots.
HNT in practice
Hotspot operators earn HNT for providing coverage and transferring data on the Network. In total there are five ways Hotspots earn tokens. First, Hotspots can transfer network data packets from devices using the network and are given a reward proportional to their overall share of data transferred. Second, through the PoC consensus Hotspots can earn HNT by validating their peer's wireless coverage. Third, Hotspots can participate as “witnesses” by monitoring and reporting on the PoC mechanism. Fourth, the Consensus Group validates transactions and publishes new blocks. However, the likelihood of participating in this consensus process is based on a reputation score that changes based on network participation. Lastly, there are challenges in which Hotspots are chosen to encrypt messages over the Internet to a target group of Hotspots. These challenges are used by Proof-of-Coverage to validate wireless coverage.