The San Jose, California, partnership with crypto company Helium was a flop
Written by Lindsay McKenzie
San Jose, California made headlines a year ago when it announced plans to increase high-speed internet access for low-income families through a partnership with cryptocurrency company Helium.
As part of the six-month pilot program, the city received 20 of Helium’s wireless hotspots. Using devices such as GPS trackers and air quality sensors connected to these wireless hotspots, the city planned to mine Helium’s proprietary cryptocurrency, HNT, and use the proceeds to cover the internet bills of 1,300 low-income households.
In the end, the pilot was able to fund internet access for just 86 households at $120 a year.
San Jose was the first city to partner with Helium – a company that aimed to build a “People’s Network” through the installation of hotspots in people’s homes and businesses that can be connected to small devices such as GPS trackers, environmental sensors and cameras.
Despite deploying more than 500,000 hotspots globally, Helium’s supposed “People’s Network” has failed to generate significant revenue. A report last week in Forbes showed that the vast majority of crypto mining revenue has gone back to Helium’s executives.
While Helium representatives told Forbes their business is just getting started and denied any wrongdoing, the company’s partnership with San Jose is over.
“After evaluating the initial results and potential of the model, we decided to cancel the pilot in August this year, while instead doubling down on a unit refurbishment pilot which has proven to be a greener, scalable source of funding for low-income residents. access the internet,” said Clay Garner, San Jose’s Chief Innovation Officer for the City of San Jose and Director of the Mayor’s Office of Technology and Innovation.
The city expected to earn about $156,000 from its cryptocurrency mining operation, but in reality only produced the equivalent of $10,320. The helium hotspots, which cost $500 each, were purchased for the city by the California Emerging Technology Fund.
Garner said the experiment didn’t cost the city more than it earned, noting that the Helium project was just one of several initiatives the city has tried to address the cost barrier to digital inclusion.
The underwhelming results were a consequence of volatility in the cryptocurrency market, and less than expected growth in data traffic on the Helium network, Garner said.
“As we aimed to use the funds to meet an immediate community need within a defined pilot period, we were not willing to ‘hold’ indefinitely or speculate on future price increases,” he said.
The 20 hotspots have been collected and are now in stock.
While Helium’s partnership with San Jose is featured prominently on the company’s website, there are no plans for further collaboration.
“The partnership has completely ended,” Garner said.
