Blue Ocean on the cryptocurrency market
Where did the term “Blue ocean” come from?
The term “Blue ocean” was coined by INSEAD business school professors Chan Kim and Renee Mauborgne in their book “Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant”
What does it mean?
The authors define blue oceans as markets with high profit potential and no competitors.
Apple, for example, has found a blue ocean with its music download service iTunes. While billions of music files were being illegally downloaded every month, Apple created the first legal format for music downloads in 2003
Another example of a blue ocean firm is Netflix, the company which reinvented the entertainment industry in the 2000s. Rather than enter the competitive video rental shop market, Netflix created new models of entertainment: first by offering video rentals by mail order and then by launching the first video streaming platform paid for by user subscriptions
In the cryptocurrency market, there are also projects that can be classified as blue ocean, and our analysts have compiled the Blue Ocean Index based on them
What project will we pay attention to?
Today we will take a look at Helium from this index
Helium: what is it?
Helium is a decentralized open wireless network built on a new blockchain for the physical world.
Helium was founded in 2013 by Sean Fanning, Amir Haleem and Sean Carey with the aim of simplifying the creation of connected devices. Helium believes that today’s wireless communication capabilities are completely inappropriate for the next generation of machines.
Helium aims to improve the communication capabilities of wireless Internet of Things (IoT) devices. In 2013, the infrastructure around IoT was still in its infancy, but developers wanted to add decentralization to their offering, so they called it the ‘People’s Network’ in the official literature.
Its main attracrion will appeal to device owners and those interested in the IoT space, while financial incentives provide additional outreach opportunities.
Network participants buy access points – a combination of a wireless gateway and a miner – or create their own. Each access point provides network coverage within a certain radius and also uses its own Helium token, HNT.
The network operates on proof of coverage, a new consensus algorithm based on the HoneyBadger BFT protocol, which allows nodes in the network to reach consensus when the quality of the connection varies widely.
In addition to the HNT, users pay a transaction fee in the form of a separate token called Data Credits, which is not exchangeable and is tied to individual users.
A Helium Access Point is a physical device that is used to mine and broadcast on the Helium network. Anyone who wants to participate in the network by running an access point must purchase one from a third-party manufacturer.
There are currently 5 different Hotspot models available in the Helium online shop, priced between $410 and $577. These hotspots are available for both indoor and outdoor use, and as of April 2021, they are so popular that manufacturers can’t keep up with demand. Most of them are currently reserved and won’t be delivered until the summer.
Making money on Helium for most people is not as simple as buying a hotspot, setting it up and watching the money flow in. You have to be within range of other hotspots, but not too much. Either too few or too many access points nearby will reduce the income from your access point. Currently, the best locations are urban areas in the US and Western Europe. Each hotspot has a range of about 10 miles, although this can be increased by placing the hotspot at a higher height or by installing antennas.
Of course, it’s not so bad to be the first in your area to get an access point. As your coverage improves, so will your income. For example, there are some users who report a significant increase in revenue over a short period of time as more access points are added in the same area where their hotspot is located. As with many things in the cryptocurrency industry, first-time users will see the biggest gains.
Below is a chart of the price of Helium , at the time of writing it is trading at $25 , but it has risen 8.5 times in the last year.
As of 8 April 2021, there are 25,957 active access points on the network. Those living in major urban centers in the US and Western Europe already have a good chance of earning a decent amount of HNT, and in some areas coverage is already spreading to the suburbs.
Below is a screenshot of current coverage in the US and Europe
We can say for sure: the technology is working as intended. It is to be expected that growth can continue and hotspots will remain profitable, but the overall cryptocurrency market situation should be considered, if the market decline continues and is accompanied by a large outflow of liquidity, in the short term we should not expect a return on investment, but in the long term it is an interesting asset.