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IoT

Can wireless learn to love DeWi, blockchain and cryptocurrency?

Althea, Nova Labs (Helium), World Mobile Group, Airwaive, Pollen Mobile and Hexagon Wireless are among the companies hoping to use cryptocurrency, blockchains and decentralized wireless networking to revolutionize the wireless industry.

Some companies – like Helium and Pollen – are taking a very public, commercial approach to the market, with grand plans to build their own wireless networks. Others – like Althea and Airwaive – are taking a business-to-business tack, with the goal of connecting different elements within an ecosystem and value chain.

Taken together the efforts represent a major change to the status quo, whereby massive telecom companies take on debt to build their own networks. This new sector even has its own catchy, Web3-friendly portmanteau: DeWi, for decentralized wireless. In fact, there's already an association for the space, the Decentralized Wireless Alliance, which is working to foster "research, development, and innovation at the intersection of radio hardware, sensors and manufacturing, blockchain, and peer-to-peer systems."

Will these new decentralized, crypto-blockchain upstarts be successful? Some are not convinced.

"At best, I think these are delusional wishful thinking. At worst, I think several are outright scams," Disruptive Wireless analyst Dean Bubley wrote in a brief LinkedIn post on the topic recently.

Crowdsourced network buildouts

It's still early days in the space and the data, at this point, doesn't make the business case. Nova Labs' Helium LoRa-based IoT network is undoubtedly the biggest and best-known player in the space, and it generated $6,500 in revenue in June. That seems small considering the company counts almost 1 million LoRa transmitters around the world, covering almost 10% of the world's population.

But it's worth noting that Nova Labs didn't spend anything to build that network. Its users – which include developers, speculators, investors, companies and everyday people – are the ones who forked over at least $100 (and in some cases much more) for each one of those LoRa transmitters.

"It's just getting started," said Amir Haleem, co-founder and CEO of Nova Labs, the company backing the Helium network.

Nova is already getting ready to launch another DeWi network, this one running 4G LTE connections in the unlicensed 3.5GHz CBRS spectrum band, in the coming weeks. There are already more than 2,800 of those radios deployed around the country, and each one costs anywhere from $1,500 to $5,000.

Nova Labs uses equipment from FreedomFi and others for its 4G Helium network. (Source: FreedomFi. Used with permission.)
Nova Labs uses equipment from FreedomFi and others for its 4G Helium network.
(Source: FreedomFi. Used with permission.)

And Nova isn't alone. For example, Pollen Mobile offers $7,500 mini cell towers it calls "Flowers," and according to its deployment map it has sold around 600 of them.

The setup is surely bemusing to executives at companies like Dish Network and Verizon, which are spending billions of their own dollars to build and update their own wireless networks.

Why are wireless users and other speculators buying these transmitters and building these companies' networks for them? Both Helium and Pollen offer egalitarian arguments about their networking goals: "The centralization of the world's digital communications systems and networks has in too many instances handed the tools of exploitation, oppression, and manipulation to increasingly powerful states and non-state actors. Pollen was created to help deliver on that initial promise of the Internet," according to the company's white paper.

In reality, each company is rewarding its users with cryptocurrency for buying, activating and maintaining all those transmitters. And not just any cryptocurrency – many companies are doing it with their own cryptocurrency: Helium has its HNT tokens and Pollen has its PollenCoin (PCN).

(Source: Andre Taissin on Unsplash)
(Source: Andre Taissin on Unsplash)

If that sounds a little like paying people with Monopoly money – or Stanley Nickels or Schrute Bucks – it should. It's exactly like that. Cryptocurrency costs virtually nothing to make, and there are literally thousands of different kinds of cryptocurrency coins.

But that doesn't mean cryptocurrency has no value. It does mean it might have no value.

Investors piling on

Helium's success has given birth to a menagerie of copycats and imitators, each with its own unique characteristics and spin.

Pollen sprang from a startup called Pronto that was working on autonomous car technology, but was unhappy with its commercial wireless options. Anthony Levandowski, a former Google software engineer, founded the company. Levandowski previously worked on Google's autonomous driving efforts, but was sentenced to 18 months in prison for stealing that company's trade secrets. He was pardoned in the final hours of Trump's presidency.

"Help us build the future of mobile – one that's private, cheaper, and decentralized, and gives back. A mobile network built for you, by you," according to Pollen's website.

Meanwhile, World Mobile appears to have similar aspirations, but it is currently focusing its efforts in Africa. "Our network is run by the people for the people, so anyone can tap into the telecom industry, and make the world a more connected place," according to the company's website. World Mobile's cryptocurrency is WMT.

According to the company's latest "deployment diary" posting, World Mobile is "evaluating and planning first USA deployments in Wyoming. Site visits and potential first rollout scheduled for early September."

However, World Mobile may not be ready for prime time. A PR firm contacted Light Reading earlier this year, offering an interview with a World Mobile executive. But then the firm responded to requests for that interview by arguing the topic was "no longer relevant." After another round of emails, the firm suggested World Mobile had "paused all PR efforts."

Yet another DeWi aspirant is Hexagon Mobile. The company in May announced a $2 million seed round of funding with participation from Hypersphere Ventures, Mechanism Capital, Superfluid Group and others. (Helium, for its part, recently raised $200 million in its Series D funding round, with Tiger Global and Andreessen Horowitz participating. One of the company's co-founders is Shawn Fanning of Napster fame.)

"By allowing anyone to purchase and deploy hardware that creates wireless coverage, DeWi democratizes ownership of and access to spectrum and Internet connectivity," according to Hexagon's announcement.

But Hexagon appears to still be in the development phase considering there's no way to purchase equipment for its network on its website. It's also unclear what its cryptocurrency might be (the Hexagon Pay token, HXP, already seems to be taken by another company).

The noise in the DeWi space is hard to ignore. There's already an ecosystem developing around Helium, with companies like Parley Labs selling IoT development services atop its LoRa network.

Also, equipment vendors like Baicells are almost giddy about the prospect of selling their radios to everyday users in addition to their existing customer base of network operators. "The opportunity for vendors, operators and consumers to be involved with the growth of new distributed networks is an exciting one," Minchul Ho, the GM of Baicells in North America, wrote in March. "Anything which can build a more open, free and secure digital future for everyone is to be encouraged."

DeWi in the background

Deborah Simpier is excited about the opportunities highlighted by Helium and other companies taking DeWi into the consumer space. But she's also quick to point out that her DeWi company, Althea, already generates 7x the revenues of Helium.

Althea is using blockchain-based payments to connect different parts of the telecom ecosystem. For example, an Internet service provider could use Althea's platform to instantly share revenues among middle mile providers, building owners and other partners.

Althea's platform supports blockchain-based revenue sharing. Click here for a larger version of this image.  (Source: Althea. Used with permission.)
Althea's platform supports blockchain-based revenue sharing. Click here for a larger version of this image.
(Source: Althea. Used with permission.)

Althea's services have already been deployed in networks across seven different states, mostly via smaller wireless Internet service providers (WISPs). For example, TreeLink is using the platform to connect around 140 users through Ubiquiti's equipment in Northern California. Simpier, previously the owner of a computer repair shop in Oregon that was involved in an early deployment of the technology, has headed Althea since its founding in 2018. The company today counts $6.5 million in seed funding and 14 employees.

"We really can coordinate a cooperative effort," she said of the company's technology.

But things get complicated with Althea pretty quick. For example, if you're wondering which cryptocurrency the company is using, the company on its website explains that "Althea's novel pay-per-forward model operates on the xDai blockchain, representing 70% of xDai's microtransaction volume over the last year (as of January 2021). Althea routers seamlessly bridge payments in Ethereum and Dai to the xDai platform." Make of that what you will.

Another business-to-business startup, Airwaive, is basically selling a matchmaking service between building owners and network operators looking for places to install their transmission equipment. Later this year, the company said it will introduce a blockchain-based cryptocurrency service – using its own Airwaive tokens – that will allow network operators to pay equipment hosts in digital currency. The service will also include a mechanism that will allow the hosts themselves to pay for the equipment necessary for network operators to expand their service.

But can DeWi make a difference?

"Critique is good for the crypto and web3 world. there's a lot of garbage out there. but a global IoT network isn't one of them, and I'm so proud of what the @novalabs_ team has built. we're now seeing teams like @PollenMobile and @AltheaNetwork make great strides in this space," wrote Nova Labs' Haleem on Twitter recently.

But an outstanding question is how DeWi networks and blockchain models might be broadly integrated into the wider wireless and telecom industry. Companies like Althea and Airwaive are clearly interested in using their technology to help smaller players take advantage of regional opportunities. And those types of models may come into fashion in the coming years thanks to billions of dollars in US government subsidies for broadband networks in rural areas.

But the situation is less clear for commercial networks like those from Pollen and Helium. Indeed, Helium no longer wants to be viewed as a direct competitor to the likes of Verizon or AT&T.

"We are not here to compete with the established telecommunications entities; we are here to complement and add to them," Nova Labs COO Frank Mong recently told RCR.

That's a noteworthy stance considering just last year the company publicly contemplated growing into the "largest cellular network in the US within the next couple of years."

The unlicensed 3.5GHz CBRS spectrum band that Helium and Pollen are using is not considered suitable for wide geographic coverage. The FCC currently restricts operations in the band to relatively low power levels, meaning that signals in the band can't travel more than a few miles at the most.

As a result, Verizon is using the band for extra network capacity, AT&T is using it for fixed wireless, and Dish is using it for private wireless network deployments. Many of those companies are urging the FCC to change its rules in the band to support high-power broadcasts, but the agency has been avoiding controversial rulings while it remains short a fifth and final commissioner.

Nonetheless, there are hints that big network operators might be willing to play with DeWi networks in some cases. For example, Dish Network has partnered with Helium and invested in Pollen. And Senet, a LoRa network operator, has a roaming agreement with Helium for IoT services.

But, as one analyst reminds us, major network operators may not even want to embrace DeWi operations built and maintained by everyday users.

Mobile network operators "aren't going to roam onto a grid of unknown access points in random places, on the end of random home broadband lines. And they're certainly not going to pay in variable-cost funny-money tokens," Bubley, of Disruptive Wireless, wrote in his LinkedIn post. "Coverage in the wrong places, lots of extra latency, no mobility, little capacity, no customer visibility, questionable security and a ton of regulatory headaches."

Bubley also took aim at the notion that eSIM technology – a technology long in development in the US – might somehow support services across multiple networks.

Even if DeWi networks somehow ditch their shorts-and-flip-flops attire for a suit and tie, there's no guarantee that big network operators will care. For example, Boingo for years worked to sell its Wi-Fi offloading capabilities to big network operators in airports and other high-traffic venues where network capacity was often stretched thin. It did manage an early win with Sprint, but only added AT&T after years of efforts. Now a DigitalBridge company, Boingo doesn't talk much about Wi-Fi offload anymore.

Boingo isn't the only Wi-Fi company that attempted to build a wireless networking business in support of the cellular industry. A number of other players – from Republic Wireless to Google to iPass – had hoped to cash in on seamless Wi-Fi-to-cellular roaming. But even today that kind of roaming remains mostly unsupported.

That doesn't mean DeWi is dead, but there is an industry precedent to consider: Networks built by others in unlicensed spectrum have never really appealed to cellular network operators. That's because cellular operators want to retain complete and total control over their users' experiences – and their wallets.

Where does that leave a DeWi network? It's not clear. But, as an illustration, iPass at one point operated a federated network of 50 million Wi-Fi hotspots globally. It didn't burn out; it faded away. Pareteum purchased iPass in 2018 and, earlier this year, Pareteum filed for Chapter 11 bankruptcy. Channel Ventures Group then bought a few Pareteum businesses, including iPass, via the bankruptcy process.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

— Additional reporting by Rob Pegoraro, contributor, Light Reading

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