EGD: Explaining San Jose’s partnership with Helium

A peculiar news release landed in my inbox the morning of Sept. 29 about San Jose using some cryptocurrency program to raise money for internet services for those who can’t afford it. I almost immediately rolled my eyes upon even seeing the word “cryptocurrency” in a government news release. What’s more, I had never heard of the Helium currency referenced in the release.

My interested piqued, I decided to attend the virtual news conference held that same morning. What ensued was an explanation that confused me and likely everyone else in attendance. Even ZDNet, a leading business technology publication, called the program a “complicated scheme.”

After some research into the technical and municipal documentation of the program, allow me to explain it in hopefully clearer terms.

Who is Helium?

Helium is a startup based in San Francisco. Its cryptocurrency, which carries the same name as the company and is abbreviated HNT, has been climbing in value all of 2021. While the majority of profits undoubtedly come from the company’s HNT currency, it’s not the main product they offer.

Helium has built what it calls “the people’s network” and aims to spark a “wireless revolution” with it. Essentially, the company has built a distributed cellular network with lots of small computers—”hotspots” in Helium parlance—placed on the Wi-Fi networks of homes and business around the world.

At the time of this writing, there are approximately 230,000 hotspots scattered mostly throughout the United States and Europe, with some sprinkled throughout the rest of the world. These hotspots use the internet connection provided to them and broadcast it to other hotspots within range to share the connection, thus creating a distributed, long-range network.

I personally find the term “hotspot” confusing in this context because they are not providing Wi-Fi as we have all come to associate with the term. Instead, think of them all as mini cellular towers creating a new network and using their owner’s internet connection to route their traffic to the internet. Helium then sells access to this network to entities with devices that require internet connectivity.

Perhaps the most well-known user of the Helium network is Lime. Yes, those annoying scooters parked all over downtown. The scooters connect to the Helium network, allowing them to consistently send their location and other data back to Lime.

What does San Jose want with these hotspots?

The possibilities of devices that can benefit from the Helium network aren’t limited to just scooters, but to any internet-connected device. These devices are something San Jose has an increasing number of with Mayor Sam Liccardo’s dream of becoming a “smart city.”

Smart cities require a lot of automation that depends on internet connectivity. As such, the city benefits from having more residents host these hotspots, thus making the network within city limits more dependable for internet-connected air quality monitors, weather stations, sewage monitors, traffic lights and whatever else the city plans on deploying.

How is this all going to help low-income families?

This is where the cryptocurrency comes in. The hotspots are not only relaying web traffic, but also mining HNT. For those not familiar with the concept of “mining” cryptocurrency, in the simplest of terms it’s a computer performing many calculations before the algorithm grants it a unit of HNT, currently worth just under $20 today.

Any San Jose resident or business owner can apply to host a hotspot. All the HNT collected by the hotspots in the city’s program will be transferred to the California Emerging Technology Fund. In turn, the fund will cash out all the cryptocurrency collected and provide $120 gift cards to low-income families, allowing them to pay their broadband bill through Comcast’s Internet Essentials program for a whole year.

Helium claims the mining activity requires little power, something that cannot be said for other cryptocurrencies, especially Bitcoin.

Currently, the city has paid $10,000 to place 20 Helium hotspots around the city. Officials predict that will provide enough money to assist 1,300 low-income households with their internet bill. It’s unclear how much money Helium is getting from this deal, although, based on its own documentation, the company takes 33% of all HNT mined.

Is this all secure?

As a cybersecurity engineer, red flags immediately went off in my head when I heard San Jose wants to use residents’ home networks to enable its smart city. Even worse, as a surveillance skeptic, when I hear the words “smart city,” what I really hear is “a surveilled city.”

While the security and privacy concerns are numerous, I only had the opportunity to ask one question at the news conference: Whether or not the devices are monitoring and profiling the home networks of the residents hosting them. Helium’s chief technology officer, who also has a cybersecurity background, assured me that isn’t the case. He added that his word was verifiable given that all of Helium’s code is publicly available and that all the traffic sent through the hotspots is encrypted.

As far as my opinion on the network, program and technology, I land somewhere between hopefully skeptical and skeptically hopeful. While it’s true Helium’s technology does seem to be transparent and its creators security aware, I personally don’t feel comfortable or capable of giving an authoritative opinion until I have obtained a hotspot myself and observed it in action (Helium if you’re reading this, let’s talk).

That said, there does seem to be a certain irony in the city petitioning residents to host a network that will be leveraged to enable further surveillance of them.

San José Spotlight columnist Ethan Gregory Dodge is the founder of the Citizens Privacy Coalition of Santa Clara County. He is also the creator of Surveillance Today, a weekly newsletter and podcast discussing current events in surveillance. His columns appear every second Wednesday of the month. You can follow Ethan on Twitter @egd_io.