Does this news make Solana a buy now?

In an announcement on September 22, the decentralized internet provider announced Helium (HNT 0.65%) stated that it would transfer the blockchain to Solana (SUN 3.26%). After a community survey, more than 81% of the nearly 7,500 votes were in favor of ditching Helium’s current blockchain and switching to the lightning-fast, smart-contract-compatible Solana.

The goal for this transition is set to happen quickly. Helium co-founder Amir Haleem is optimistic that the deadline for the fourth quarter will be met.

Abandoning its blockchain and moving to Solana is another important and necessary move for Helium as it plans to enter a new service area. On 20 September, it was announced that Helium will cooperate with the wireless network provider T-Mobile (TMUS 3.52%) to offer a decentralized, blockchain-based 5G network.

A new partnership needs a new blockchain

Helium started as a decentralized wireless network for Internet of Things (IoT) devices such as sensors and trackers, rewarding users with tokens for running hotspots. Now Helium aims to do the same, but with a 5G network so smartphones can benefit from extended coverage. Hot spot operators and users of the 5G network will have the opportunity to receive a new token called MOBILE as a reward for sharing data and maintaining the network.

When you consider that the number of IoT hotspots is approaching 1 million active nodes and Helium is now adding 5G coverage, there is a significant need to move to a blockchain that can support this massive network – something Solana should be able to do easily.

By switching to Solana, Helium will be able to take advantage of a few advantages that the blockchain offers. First is speed. Solana is one of the fastest blockchains and can handle thousands of transactions per second. This is a highly desirable feature for an expansive and intricate network like Helium.

At one point was Ethereum (ETH 3.85%) blockchain was considered to be the home of Helium due to its diverse ecosystem of decentralized applications (dApps) and smart contract functionality. However, due to its limited transaction throughput and increasing fees during peak periods, Ethereum was shortlisted and Helium developers decided to build their own blockchain.

But now that Helium is growing, it needs a blockchain that can support its expansion. And since Solana’s ecosystem has matured in recent years, the transition will allow Helium users to interact seamlessly with wallets, DeFi protocols and dApps built on Solana – another added benefit.

The most important benefit of this move will undoubtedly be that Helium will now have to focus on just one thing – expanding and supporting its network. Before the transition, Helium developers had to ensure that their blockchain ran correctly and efficiently in addition to maintaining the network, but now they can leave the extra work to Solana.

The case for Helium

Since 2019, Helium’s goal of creating a decentralized blockchain approach to providing the internet has developed at a rapid pace. But as innovative as it is, Helium has had its share of bad press. An article by Forbes reported that around half of all HNT was mined and sent to just 30 wallets in the first three months of the network’s launch. These wallets were owned by friends and family of Helium’s creators and were worth as much as $250 million when Helium peaked last year.

While the news is certainly cause for concern, it is becoming clear that Helium’s decentralized Internet model is in growing demand, and investors can take advantage of it. For Helium to provide adequate support for T-Mobile’s 5G users, it will need to build its current inventory of 5,000 5G hotspots to somewhere around 50,000. Given its past history and long road ahead, investors should check back with Helium in a couple of months to make sure its infrastructure is growing.

The case for Solana

In the case of Solana, this migration of Helium will put the lightning-fast blockchain to the test on a scale never seen before. Yet this is exactly what Solana was built to do – provide projects with a fast and cost-effective blockchain solution to support their development.

If Solana can prove they are capable of handling such a task, it could be the beginning of a growing influx of more projects making the transition. And like Helium, Solana’s price has been decimated this year. After hitting an all-time high of nearly $260 last November, the price is now only trading around $30 or so. Due to Solana’s more favorable PR history and potential to become the future home of other projects, investors should see this as an opportunity to take advantage of some discounted prices.