The Helium Blockchain
The Helium blockchain powers The People’s Network, the world’s largest decentralized wireless network. Helium ($HNT) can be burned in exchange for data credits required to use the network’s bandwidth, which is especially useful for LoRaWAN Internet of Things (IoT) deployments. Those who host hotspots providing bandwidth and coverage to this network are rewarded with Helium.
Hotspot hosts and early adopters alike have gleefully rejoiced as the price of Helium has shot up, and many find themselves consulting search engines, especially when it comes time to sell their hard-earned $HNT for fiat currency like the US Dollar. This article presents guidelines for buying, selling, and trading Helium and recommends which exchanges to use.
Helium Wallet App
The Helium App Wallet (iOS, Android) is the official app published by Helium Systems, Inc. The app allows users to set up, monitor, and discover hotspots. Hotspot ownership is established during setup, which requires connecting the mobile wallet app to the hotspot. This wallet provides a secure platform from which you can receive and send Helium ($HNT) in addition to burning Helium in exchange for data credits.
It’s not possible to exchange Helium for other currencies (crypto or fiat) directly using the app wallet. Instead, Helium must be transferred–withdrawn–to an exchange that supports Helium trading pairs. Likewise, anyone wishing to increase holdings of Helium, perhaps with the goal of running a validator, will likely deposit the cryptocurrency in the app wallet from an exchange wallet.
Why Transact Helium?
Though the rationale motivating people to transact Helium could be considered self-evident, this section will explore some common scenarios.
It’s important to remember that the majority of people possessing Helium received Helium through passive earning via Proof-of-Coverage (PoC). For cryptocurrencies such as Bitcoin, it’s incredibly common for users to begin their journeys by obtaining partitioned wallets at exchanges. Mining and staking entrenched cryptocurrencies can be difficult and is not particularly profitable for new entrants. Comparatively, hosting a Helium hotspot was touted as a surefire way for early adopters to earn outsized ROI.
With Helium, a large amount of daily activity comes from users passively receiving Helium in their app wallets. Some percentages of these wallets have never sent their earnings to an exchange or received HNT from a source other than their own hotspots.
It is advisable for all Helium hotspot hosts to set up and verify accounts on exchanges. In the event of a major market crash, a host who doesn’t have these privileges set up may have to wait weeks in order to finish validation and actually exchange HNT for another currency. The feeling of helplessness that accompanies this situation is something that can be avoided.
Aside from the obvious reasons of wanting to realize your earnings or speculate on the future of Helium, setting up a trading account at an exchange also allows you to take advantage of past or future features that may require outlays of fixed amounts of Helium. For example, when the community-hosted validator project was announced last year, those who already had 10,000 or more HNT were rewarded for holding, while those who had less rushed to exchanges and had to wait helplessly for verification as prices rose exponentially.
In short, whenever you are earning or are otherwise involved with a cryptocurrency, you should make sure you have a verified account on an exchange that allows you to buy and sell that cryptocurrency. During critical trading periods, especially those surrounding news announcements, having been lackadaisical about verifying your trading account can have painful consequences.
Exchanges That Support Helium Trading Pairs
Only a few exchanges support Helium trading pairs. Among them, there is no absolute “best” exchange on which you can transact Helium.
Regulations differ by country, so depending on where a user is located, only a small subset of exchanges may be available for use. At any given time, one exchange may have the absolute best price inclusive of fees if you execute a trade at that exact moment. However, smaller exchanges may offer other incentives to attract traders away from larger institutions.
Currently, the major exchanges available to trade Helium in the United States are Binance.us, Crypto.com, and Uphold. Because Uphold’s share of overall cryptocurrency volume is extremely small, this article will focus on Binance.us and Crypto.com.
Binance is the dominant exchange by overall volume, and Binance.us is the spinoff that complies with US regulations. Though this exchange may have fewer total trading pairs than competitors, it has an advanced market view and was the first to list Helium. Binance.us listed Helium back in September 2020, long before it was on the radar. For this reason, Binance.us has been the exchange of choice for serious traders and Helium enthusiasts alike. Later, in 2021, USD/HNT trading pairs were added. Account security is excellent, but the account verification process is known to take longer than it does on Crypto.com.
Crypto.com is a popular exchange with a large percentage of the market share in the United States. The exchange has a large team, millions of users, plenty of trading pairs, and numerous value-added services, including DeFi, NFTs, staking, and credit cards. Crypto.com added Helium on April 30th, 2021. Though Crypto.com wasn’t the first US-based exchange to add Helium, it offers trading in roughly double the number of distinct coins that Binance.us does. Verification tends to be fast; customer support and the in-app user experience is the best in class.
What Exchanges Don’t Support Helium Trading Pairs?
Many popular exchanges, especially those located in the United States, do not yet support the trading of Helium. Coinbase, Kraken, FTX, and Gemini have not added Helium trading pairs. In mid-2021, Coinbase reported that it was considering adding Helium. While details explaining these decisions are scant, it’s likely that Helium having its own blockchain presents a slew of technical and security challenges compared to other projects built upon Bitcoin or Ethereum blockchains.
What to Keep in Mind When Transacting $HNT
All trading involves risk, but, thankfully, there are not many unique circumstances when it comes to trading Helium. The advice here is generally applicable to all cryptocurrency transactions.
When you sell cryptocurrency for profit, you owe taxes. If you have mined a significant portion of your holdings, you will likely be facing a larger tax bill than if you were only trading it. You should be aware of the tax implications before submitting transactions.
When trading on an exchange, remember the adage “not your [private] key, not your [bit]coins.” You shouldn’t rely on cryptocurrency exchanges to safely keep your stash of Helium. There have been many instances of exchanges getting hacked and wallets being pilfered. Using exchanges for anything more than transactions adds an element of danger.
When observing a market order book before making a trade, the amount of information displayed can be overwhelming. It’s important to note that there is no guarantee you will be able to buy your holdings back for the same price, even immediately after a sell order gets filled. All markets, including extremely liquid markets, have what’s known as the bid-ask spread. If there are resting orders in the market, the maximum price at which someone is willing to buy will always be less than the lowest price someone is willing to sell at. Any prices that “cross” the spread is executed–they’re filled. Market orders cross the spread, getting a price under the theoretical market price in order for instantaneous execution. If you attempt to quickly reverse a trade you just made, you’re almost guaranteed to end up with less value, because you’ll effectively “pay” the bid-ask spread when buying or selling with a market order.
Trading on an exchange for the first time can be frustrating due to identity verification requirements. Each exchange has different requirements, and each country has different regulations governing cryptocurrency trading. During some of the manias seen in the crypto space, it wasn’t unusual for full-privileged authentication on major exchanges to take several weeks. This could actually exacerbate manic behaviors, as some would-be traders might seek out less-reputable exchanges or services offering transactions with less red tape.
The last point about exchanges and general safety is that the exchanges don’t necessarily guarantee a service-level agreement when it comes to on-chain transactions. What this means is that, under certain circumstances, depositing any amount of a cryptocurrency to a wallet owned by an exchange may fail for reasons out of your control or may get “stuck” for days at a time.
In 2021, Helium ($HNT) ascended to become one of the top 100 cryptocurrencies by market cap. Helium has its own blockchain and its daily trading volume is low--an order of magnitude less than some of its peers. An exchange may not rush to implement Helium trading for these reasons. After all, exchanges make more money with more trading activity, and Helium is one of the lowest-volume products exchanged in the entire top 100!
Whether you are receiving HNT for hosting a hotspot or operating a validator, planning on building a trading strategy, or just want to find an exchange on which you can make your first purchase, Binance.us and Crypto.com are the two main options for those residing in the United States.
The cryptocurrency space changes at a fast pace. It is undeniable that Helium trading pairs will be added to additional platforms as trading activity and adoption rise. This article will be updated with any pertinent details and if you have any suggestions for how it can be approved, feel free to comment below.