If you follow the Helium network and its progress, you will probably realise that we are fast approaching the first 'halving' of HNT in a little over two weeks.
On August 1st this year the amount of HNT it's possible to mine each month will reduce from 5 million coins to 2.5 million coins, this is quite a common process in the crypto world and we have all been prepared for it for some time.
That does not mean that it hasn't impacted the price or enthusiasm of many in the community, however, I believe that this fear is largely unfounded.
Let's have a look at some indicators of the general mood of the Helium community as we approach this important date.
If you look at eBay you can still see hotspots changing hands for very high prices. The general price of an individual miner that is ready to ship today has not decreased hugely in the last month or two. This is quite surprising as there must be some doubts about how quickly you can pay back that capital investment with earnings set to change in the next few weeks.
Typically hotspots still have a 12-20 week lead time (although we have seen some improvements on that lately) and so people wanting to get into mining are forced to buy their devices from the secondary market at a considerable markup.
That's a lot of money to spend on a device if you are expecting to get your investment back before the expected arrival of the light hotspots in early 2022. The light hotspots will sell for an expected price of £100-150.
If you added this up with other devices available on the market it is clear that the people who have paid a premium for their hotspots are not planning to make any money from mining until after they have returned their investment.
If you look at the general price fluctuations of HNT itself, there has been a lack of growth in the price for a while. This is not unusual in the lead up to a halving, people are waiting to see how the network performs and how that will translate into price changes.
Anyone who studied any sort of economic theory will know that if you halve the supply of something then its price will typically rise.
Our belief as a company is that we will see HNT rise after August 1st and that should go some of the way to compensate for the hit we will all see on the number of HNT rewards we get through mining. Sure we might get less HNT each month but if that HNT is worth 40% more than it was in July the hit won't be as hard as many fear.
As Helium matures and they start to bring paying customers onto the network the rewards for actual customer data transfer will also start to increase. That's up to 30% of the mined HNT that we don't get any of at the moment.
We believe that both these factors and the continued strong growth of the network mean that HNT will continue to rise, we are very bullish on the coin itself and its price this time next year should be significantly higher than many people predict.