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Lebanese are starting to disconnect and give up on Helium boxes as the cost of keeping them online has become increasingly unsustainable and unprofitable, Wired reported.
Lebanon has become a hotbed of crypto adoption and use as the country contends with a collapsed economy and banking system. Stablecoins are more common than fiat as trust in the traditional financial and political systems is at an all-time low.
However, despite the populace’s high rate of crypto adoption and use, the Helium network seems to be on its last legs in the country as its promises of profit and utility remain elusive.
Helium in Lebanon
The country currently boasts the highest number of Helium hotspots worldwide, with over 6,500 boxes online. The next highest is the UAE with less than half that number.
Lebanese adopted Helium in droves during the 2021 bull run to contend with a crashing economy and a banking system that had pretty much collapsed. At the time, a single HNT token — the crypto paid out to miners for participating in the network — was worth around $50 and people could expect to make around $50 per day from mining HNT.
In an economy where the average pay for police and government officials had fallen to $100 from $800, Helium’s promise of a steady passive income stream that was magnitudes higher than the average monthly pay was an enticing opportunity for Lebanese.
However, as crypto winter set in and bears took control of markets the price of the token fell dramatically from its all-time highs in 2021. HNT has lost over 90% of its value since and is trading at $2.28 as of press time on March 13.
What was once a promise of a $50 per day payout during the 2021 bull run, became cents over the ensuing months of 2022, with no recovery in sight.
The network has recently come under fire for its tokenomics and critics claim that the network unfairly benefited insiders — who got 25% of the total token supply. Meanwhile, Lebanese told Wired that Helium seems like a “scam” and its profits only ever manifested for early adopters, with everyone that joined late left holding the bag.
Helium’s elusive profits and utility
According to Wired’s report, Helium mining is much more complicated than its marketing claimed, with the payout determined by various factors — all of which have varying effects on the mining prowess of a device. People interviewed by the news outlet said that IP addresses, radio frequencies, and altitude were some of the things that impacted the mining payout.
Additionally, mining payouts are also affected by the density of the network. Both too few or too many devices in an area affect mining payouts negatively and Lebanon has the densest network. Sources told Wired that at the height of Helium adoption, some companies bought hundreds of devices and attempted to set up “mining farms.”
Meanwhile, the reward pot is finite and as more Helium boxes are deployed, the payouts are spread thinner and thinner. Some people still hope their investments will eventually be recouped but many are starting to cut their losses and giving up on the network.
Helium claimed that its internet of things would provide a wide variety of use cases and utility to improve people’s daily lives, from delivering food via drones to keeping track of pets. However, two years on, the network has barely made any progress toward those goals.