Is it too late to earn passive income with helium mining? | by Arvinth | February 2022
I’I recently had success with helium mining and was able to maintain rewards of over $400 per month. Although it works well for me, it may not be suitable for everyone. The daily network mining average is currently around 0.11 HNT per day, which at a market price of 30 USD/HNT is only 3.30 USD. Earning $3.30 a day might not be so appealing, especially when a decent setup can cost over $1,000. In this article, I’ll cover the due diligence I did before deciding to buy a miner and suggest you do the same before choosing to join The People’s Network!
If you haven’t already checked out my first post to see how I started helium mining: I tried helium mining for a month and made $419.54! . It explains what helium mining is, the different types of rewards, and how I set up my miner.
Prime location for helium extraction
It is first important to determine if you are in a good location for helium extraction. A miner’s location is a key factor in how much HNT you earn.
Start by researching the performance of other nearby miners, all network hotspots can be found on the helium explorer (the map is shown as hexagons, if you are interested in how this mapping system works , see this article). This explorer will show the number of hotspots in a hex and the amount of HNT these hotspots have mined in the last 30 days. If there are too many malfunctioning miners in your hex, that may not be a good sign, or if there are no other miners nearby.
The best access point location is not too close to other access points, but close enough to continue receiving signals from them.
Although the Helium Explorer does not display the exact locations of hotspots pinned by the owner, this can be seen on Hotspotty. Using this data, browse nearby access points to see if the owner’s configuration is visible. This can help determine what a similar configuration can gain in the area by comparing configurations with explorer data. If you think you can have a better setup than most hotspots in your area, then that’s fine, your earnings will likely be higher.
Understand how reward scaling affects your revenue
The majority of rewards will likely come from Proof of Coverage (PoC), i.e. rewards for witnessing or witnessing. Originally, all PoC rewards were split equally; however, to encourage the installation of hotspots in areas with insufficient coverage and to penalize hotspots in areas with double coverage, reward scaling has been presented. The rewards earned by witnessing or witnessing depend on two things:
- The number of witnesses
- The number of hotspots in the emitter hex tile
The Helium Enhancement Proposals (HIPs) cover these issues in depth, in particular HIP15 and HIP17 have a detailed explanation of how rewards are calculated. Here are some summary points for them:
- Transmitters: the more witnesses, the more the Transmitter wins.
- Witness: Each additional witness beyond a total of four reduces what is earned by each witness in this challenge.
- Randomly shuffles valid received witness receipts and selects up to 25 of the valid ones to write to the chain.
- The witness earns less if the number of hotspots in the transmitter area exceeds the “target density”. Target density varies by hex resolution, as detailed in the HIP and defined in several string variables.
It can be difficult to understand the underlying calculation of tiered rewards, but what we really need to know is if the potential transmission ladder (previously called Reward Scale) for your Access Point is 1.0 or very close to 1.0. The Transmit Scale is a multiplier (0 to 1.0) applied to your rewards and reflects the density of Hotspots in that area.
We can start by looking at transmission scale values for hotspots near you on Helium Explorer. In particular, look at hotspots in your hex and compare their transmission scale values, as you will likely get similar numbers. Note however that your transmission scale may be different from others in your hex since this value is based on multiple ranges in the density zones and not just the density of your hex. Additionally, adding your hotspot to the Helium blockchain could potentially reduce the transmission scale of others around you, as it makes the hex denser.
To get a deeper understanding of the transmission scale for a Hotspotty hotspot check. the reward scaling tongue provides tons of useful information and has the functionality to edit current hotspot locations. You can choose a random hotspot and then change its location to where you plan to put one to get an estimate of your transmission ladder value.
Note: You must be logged into Discord to access all data on Hotspotty.
A low transmission scale does not necessarily mean that your earnings will be low, as it is only a multiplier. There are other factors such as your configuration and the number of access points you can communicate with that impact the amount of activity on your access point.
Elevation of a potential hotspot location
A key question to ask is: How high is a potential hotspot location from surrounding buildings or land? If the altitude is generally higher than its surroundings, it’s a good place for a helium miner because your signals aren’t blocked. On the contrary, if your location is at the bottom of a valley or not elevated, it may not work well for you.
In general, ask yourself if the signals from your antenna will have good uninterrupted range. As this will be directly correlated to your income.
Ultimately, in the end, the decision is yours. If you’ve done all of the due diligence suggested above and feel good about giving helium mining a shot, then go for it! Look at it from an investment perspective and estimate how long it will take you to recover the initial investment based on the data points you have collected. Be a data-driven investor!