Expanding mobile services with device licensing and crypto | Opinion

This article discusses two main topics: seamless access to Decentralized Finance (DeFi) protocols on the Solana blockchain through Helium Mobile’s licensing program and NFT staking rewards taxation.

Approximately 80 times more wireless traffic is projected for 2030 compared to 2020, mainly due to the rise of tokenization and mobile payments. In response to expanding internet access via cell phones, Helium Mobile was founded in 2013 by Amir Haleem, Shawn Fanning (co-creator of Napster), and Sean Carey. They developed a decentralized blockchain infrastructure called DeWi for wireless LoRaWAN networks to support IoT devices. Using blockchain technology and crypto economics, Helium Mobile enables individuals to provide wireless coverage and connectivity through peer-to-peer networks, effectively utilizing all existing resources including personal wireless access systems.

Due to growing worries about network congestion and connection interruptions caused by signal weakening as a result of heightened wireless traffic, in the year 2019, the company introduced Helium Hotspots featuring blockchain technology and digital rewards. The objective was to establish a global network that is both extended and maintained by its users for seamless wireless coverage – all at an affordable price point.

What is Helium Hotspot, and how does it work?

As a crypto investor, I understand that a hotspot refers to a wireless device that enables various gadgets such as smartphones, tablets, computers, and Internet of Things (IoT) devices to access the internet. While most modern smartphones come equipped with this functionality, there are instances where investing in dedicated mobile hotspot devices can offer advantages. These devices provide faster internet speeds, the ability to connect more gadgets simultaneously, and longer battery life compared to relying solely on a phone’s capabilities.

Helium Hotspots serve as micro-cellular towers, establishing a decentralized wireless network that enables the connection of compact, power-efficient devices over vast distances. This is achieved through an expanding global network of individual Helium hotspot owners in approximately 170 countries. To participate, users require a mobile phone plan with hotspot data capability to operate a smartphone hotspot or personal device as part of this extensive network.

Helium Mobile’s cell service operates on a combination of towers including T-Mobile in the US, Telefonica in Mexico, and hotspots run by individuals. These hotspot hosts receive rewards in the form of MOBILE tokens/NFTs (HNT). Similarly, phone subscribers who opt into Helium Mobile’s location tracking service are compensated with HNT. Hotspot deployers and mobile subscribers collaborate to create a network that provides flexible wireless coverage. This innovative approach empowers communities to enhance their internet and cell reception without the need for the extensive infrastructure typically required by traditional telecom companies. Amir Haleem, CEO of Nova Labs and founder of the open-source Helium Network, critiqued the conventional telecom industry’s centralized network expansion strategy:

“It’s not really a sustainable model, in my opinion. I think it’s starting to break now.” 

Amir anticipates that conventional mobile network providers will adopt Decentralized Wireless Infrastructure (DeWi) models in the future. With Helium Hotspots, users can generate HNT tokens, valued at approximately $3.46 as of June 24, 2024, to extend vital connectivity to nearby Helium Mobile subscribers.

Helium Mobile minted nearly one million Hotspot HNTs to enable other decentralized physical infrastructure projects (DePINs) to verify location data using Solana blockchain technology. Solana relies on network participants to run the software that keeps the system running. Participants may stop contributing their computational resources if the monetary rewards for participation are not attractive enough to incentivize these contributions. At current levels, subscribers to Helium Mobile who use Discovery Mapping are earning over 2,000 MOBILE tokens HNT per day, according to CoinDesk.

On the swift, economical, and expandable Solana platform, Helium Mobile users incur a minimal cost (average transaction fee amounts to 0.000014 SOL) settled in SOL tokens for various activities. These include transferring tokens, depositing tokens for staking, executing transactions like payments, exchanging tokens, minting NFTs, and redeeming rewards from Helium Hotspots – all encompassed by on-chain Helium transactions.

Helium Mobile continues to expand its customer base in the US, reaching thousands, by collaborating with Google. They offer a compelling deal: a $20 monthly fee for unlimited 5G cellular service, bundled with Google Pixel 8 smartphones and Helium hotspots. Additionally, Helium supports other devices such as Solana Saga, the pioneering web3 native phone.

What is a web3 phone?

As a researcher studying the latest developments in mobile technology and web3 experiences, I’m excited to share that last year, Solana Mobile, a subsidiary of Solana Labs, introduced an innovative Android-based phone called the Solana Saga. This groundbreaking device is designed to deliver a mobile-centric web3 experience, bridging the gap between the convenience of smartphones and the heightened security and privacy requirements of the digital currency landscape. With the Solana Saga, users can easily access Solana blockchain DeFi protocols for seamless transactions and interactions.

As a researcher studying the intersection of mobile technology and blockchain, I’m excited to share that with a Solana Saga phone, users can interact with decentralized applications (dApps), digital wallets, NFT marketplaces, web3 platforms, and other blockchain solutions directly, bypassing the need for numerous intermediaries or additional devices.

Helium Mobile offers a licensing program

Helium Mobile’s objective of revolutionizing the $3106.1 billion global wireless network infrastructure through its hotspot licensing program and web3 phone devices marks a noteworthy development in the industry, poised to adopt Decentralized Wireless Infrastructure (DeWi). Major telecommunication companies like AT&T, T-Mobile, NTT, Alibaba, and Tencent have integrated blockchain technology into their operations for diverse purposes such as identity verification and access management, digitizing business workflows, communication enhancement, data security, and computational processes.

As an analyst, I’ve been observing how companies are addressing wireless dead zones with innovative solutions. World Mobile has taken a unique approach by utilizing balloons and towers in the UK to provide connectivity, while offering token payouts from the Cardano blockchain. On the other hand, Vodafone has integrated cryptocurrency wallets directly into their SIM cards, merging blockchain technology with traditional telecom functionality.

As a crypto investor in Helium, I’m thrilled about the significance of licensing our mobile tech stack. Our ultimate goal is to provide affordable and widespread wireless connectivity to communities not just in the US but globally. I firmly believe that internet access is essential for every person, and many rely on their smartphones for this connection. By allowing other device manufacturers to use our technology, we can speed up the development of a global wireless infrastructure transformation. This initiative empowers individuals and communities, fostering progress, and creating a more interconnected world.

NFT staking rewards taxation

One way to rephrase this in natural and easy-to-read language is: By staking, you have the opportunity to earn returns on the digital assets you own. Digital currencies like Ethereum, Tezos, Cosmos, Solana, Cardano, and others offer staking as a feature. To take advantage of this, you can set aside a portion of your holdings for staking and receive rewards in return.

In July last year, the Internal Revenue Service in the United States released updated guidelines specifying that staking rewards for digital assets are to be reported as taxable income. These rewards fall under the “Other Income” category when you gain control and possession of the digital asset (reported on Form 1040 Schedule 1). Subsequently, any gains realized from the disposal or sale of the digital asset (reported on Form 1040 Schedule D) are subject to capital gains taxation.

As a researcher investigating digital asset taxes, I would advise that you determine the fair market value of your staking rewards once you receive them or gain control over the associated digital asset. This value serves as your cost basis for calculating any subsequent capital gains or losses when you decide to sell these rewards.

As a crypto investor, I’d put it this way: With the new Rev. Rul. 2023-14, I, along with other Helium Mobile stakers, will be required to pay taxes on our HNT rewards once we receive them, regardless of whether or not we have converted our digital assets into fiat currency.

For proposed digital asset tax disclosure for brokers and collectible NFT taxation rules, see Tokenization of art, gaming, and the future of NFTs | Opinion. For digital asset tax disclosure rules, see: What you need to know about the IRS’s crypto question on tax returns | Opinion  

Disclaimer: The following article was penned down prior to the recent speculation regarding Solana’s native token, SOL, being under investigation by the SEC. Consequently, it does not delve into the SEC’s classification of SOL as a security in their cases against Binance.US and Coinbase last year. This ongoing probe could have significant implications for all projects associated with Solana. Our editorial team will keep you informed as we monitor this developing story.

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2024-07-05 18:45