Helium’s IoT crypto network is barely keeping up in Lebanon

In the remote control mountain village of Zaarouieh, about an hour’s drive south of Beirut, Ahmed Abu Daher stands on the roof of a half-built house overlooking a wooded valley. He gestures towards a dreary gray box the size of a takeaway container. A couple of wires come out of it and wind their way across the bare concrete.

“It’s actually one of the most difficult forms of mining,” says Abu Daher, 22, an architecture graduate and operator of a crypto mining pool. “Of course you need decent internet, reliable power, but the height of the position is very important.”

The box is a helium hot spot. It transmits a long-distance Wi-Fi signal and forms, together with hundreds of thousands of other hot spots, a global decentralized network designed for the Internet of Things. In return for installing and running it, Abu Daher receives a cryptocurrency called HNT. Looking out over the lush hillsides as the sound of a geriatric diesel engine sputters in the distance, it’s hard to imagine what “things” the little gray box can communicate with.

Lebanon’s economic freefall in recent years, combined with a relatively high level of technological competence and a mass culture, has made the country a kind of crucible for testing the utility of crypto-assets. Stablecoin use has boomed as people attempt to circumvent a basket case in a banking system. A community of ingenious miners continues to scrape profits out of the dilapidated electricity grid, and some clever speculators have even managed to recover the savings they lost in the collapse of the banking system. Many turned to Helium.

On Helium Explorer, a dashboard showing the location and activity of hot spots globally, Lebanon appears as an intense constellation of luminous green dots surrounded by near-empty space. The Hotspotty app, which shows the state of the Helium network, records approximately 6,500 hot spots installed across Lebanon. In the rest of the Middle East, only the United Arab Emirates comes close to Lebanon’s adoption levels, with around half that number.

Helium’s promise to become the backbone network for smart devices (and delivery of breakfast burritos by drone) has little to do with its appeal in Lebanon. Lebanese citizens, many of them struggling as the country’s economy slumped, simply saw the financial dividends from the network’s hot spots as an easy way to make hard currency. However, as the value of HNT tokens has fallen, many people have seen their money depleted and stuck holding on to elegant but rather useless hardware.

At the headquarters of God of Mining, a mining pool on the outskirts of Beirut, CEO Joe Manih sighs as he gestures toward 30 or so hot spots of various brands stacked on a table. “We just disconnected them last week,” he says. “They weren’t worth the effort, and now we can’t even sell them.”

Helium was founded in 2013 by Shawn Fanning, the co-founder of Napster, and Amir Haleem under the somewhat ominous name of Skynet Phase 1. Initially, there was no crypto element to the project, and despite attracting VC investment, it struggled to gain traction time. In 2019, the founders came up with the idea of ​​using blockchain tokenization to incentivize participation in the network. In principle, anyone can buy a Helium hotspot for $400 to $500, connect it to an Internet connection and power source, and become a node. In return, the user receives Helium’s native HNT tokens, which can be traded on the open market.