What are Helium Data Credits and what are they used for?

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Helium – the largest LoRaWAN Network globally with over 300,000 global Hotspots – leverages blockchain to decentralize wireless networks for the internet of things (IoT) and, in return, reward its users with Helium’s native cryptocurrency HNT as an incentive for maintaining and validating the network. Furthermore, this HNT is burned (destroyed) to create Data Credits used to operate devices on the network. With these Data credits as the nitty-gritty of a successful operation. Let’s answer the question, What are Helium Data Credits, and what are they used for?

What are Data Credits?

Helium charges its network users transaction fees in data credits (DCS) as with most blockchains. What then are Helium Data Credits (DCS)?

They are a USD based utility token of the Helium blockchain ecosystem, allowing businesses and developers to use the Helium Network for wireless data transmissions on the network for actions such as sending sensor data and challenging other hotspots to verify their locations, and more importantly, routing data from devices connected to the Helium network. 

For example, you can think of data credits as paid phone minutes, which allow consumers to send and receive data through Helium LongFi. You can only generate these tokens by burning HNT, and they are non-transferable but can only be used by their original owner. 

How much do Data Credits cost?

The data credit has a fixed price of 1 Data Credit = $0.00001 (burning one dollar creates 100.000 DC), which means that $1 will purchase 100,000 credits. 

Also, it is worthy to note that, One Data Credits allows you to send a package of 24 bytes over the LoRaWAN network. A number that exceeds 24 bytes is rounded up; thus, a packet with a 25-byte payload will cost the same as one with 47 bytes – two data credits. However, the value of HNT fluctuates, so the amount of HNT needed for $1 will vary.

But Like a double-edged sword, data credits are a dual token system that ensures that helium inflation is associated with utility by making HNT rarer.

Using this HNT to DC relationship, a token economic structure known as a burn and mint equilibrium is established, guaranteeing an abundant and relatively scarce supply of HNT. Although, certain crypto networks use this model. As far as blockchain projects that deal with the Internet of Things go, Helium stands out, aside from IOTA (MIOTA), which employs so-called “blockless” technology to link devices to the Internet of Things. Helium is unique because it is a blockchain-based project with the same use case but a different strategy.

Side Note: You can use the Helium Data Credit Calculator to determine how much it will cost to send data between devices on the network.

What are Data Credits used for Currently?

As noted above, Helium Data Credits (DCs) are critical utility tokens derived from burnt HNT used to pay for network operations such as blockchain transaction fees, send and receive sensor data, assert hotspots, register OUIs and devices, purchase blockchains, transfer bytes using Helium LongFi and for almost everything on the Helium network.

Where to Buy Data Credits?

If you’re excited as we are, and you’re wondering where to get helium data credits to participate in this blockchain-Internet-of-Things convergence, look no further. Users on the network can convert Helium from a connected wallet or pay for them with USD. After onboarding your IoT device through the Helium Console, you can obtain DC and start utilizing the People’s Network. Any Helium converted to Data Credits is permanently removed from circulation (“burned”).

Helium – The future of IoT networks

As the need for the Internet of Things is growing exponentially with the development of technology, Helium, also known as “The People’s Network”, seeks to prepare an efficient and functional IoT in addition to its already existing major applications in Logistics and Supply Chain, Environment Monitoring, Smart water monitoring, smart Agriculture, and Smart Cities, Logistics and Supply Chain and Helium Data Credits (DCs) are critical players in the payment of the value Helium brings.

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Sources:

https://explorer.helium.com/hotspots

https://docs.helium.com/faq/data-credits

https://docs.helium.com/blockchain/transaction-fees/

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