A friend had told him about the service, where people set up radio devices in their homes to spread a decentralized wireless network that linked Internet of Things products like air quality monitors and keg trackers. In exchange for transferring data across the so-called “People’s Network,” miners would receive a crypto token called HNT.

When Gold installed his first Helium hotspot, he was working for an offshore drilling company, but he got laid off in May 2021 and decided to focus on Helium full time. As he learned from his own prime location, the Helium devices produced more HNT at higher altitudes, so he would connect hotspot owners with internet service providers that already had access to different types of towers, taking a cut of the profits. At the peak of his business, which he named Hotspot Rescue, Gold said he was making mid-six figures.  

Helium has become one of the most notorious companies in crypto—a kind of weathervane for the industry’s rollercoaster trajectory. In February, as hotspot owners like Gold raked in earnings, the New York Times published a fawning profile of the company, describing it as one of the rare crypto projects to have “normie utility.” The next month, the company behind Helium confirmed a $200 million funding round and rebranded as Nova Labs.

As the overall crypto market plunged, Helium’s prospects fell in tandem. A Mashable report from July found that Helium had misled the public on its clients, calling into question the practicality of its technology. The previous month, IoT companies had only spent around $6,500 on data transfer using the Helium network—not a promising figure for a company valued at $1.2 billion. Meanwhile, Helium’s HNT token plummeted over 90%.

A Fortune analysis has found that the entire Helium network has only received around $1,150 in revenue from IoT device demand over the past 30 days—a figure confirmed by the nonprofit Helium Foundation.

Meanwhile, as people like Gold saturated the hotspot market and the token price fell, adoption nosedived. Fortune found that only around 15,000 hotspots have been installed so far in September, down from a peak of over 90,000 in November 2021. Gold’s hotspot, the one originally minting around $16,000 in HNT a month, is now producing around $10 monthly.

With miners’ profits and installations tanking, Nova Labs is now attempting a second act. After hinting at building a 5G network last year and acquiring hardware companies, Helium announced it would be launching a separate mobile network in June, powered by a different type of hotspot and a new crypto token called MOBILE.

The question, as Nova Labs pushes into 5G, is whether the company can pull off an ambitious, new project while its other is mired in turmoil. For critics like Nicholas Weaver, a researcher at Berkeley’s International Computer Science Institute, Helium Mobile isn’t a new attempt to create a decentralized wireless network, but a distraction.

“They’ve been trying to keep the scam going by doing a shift to a model where it’s cellular connectivity, because people can understand that better,” he said. “They need to keep the grift going.” 

‘The People’s Network’ 

Amir Haleem, a game designer, started Helium with the Napster co-founder Shawn Fanning in 2013. Despite funding from major investors such as Khosla Ventures, the company struggled to find a foothold and was hemorrhaging cash before pivoting to crypto in 2017. Its decentralized IoT-focused network launched in 2019. 

A Forbes investigation published this month found that Helium insiders profited handsomely from the early days of the network, setting up hotspots and mining half of all Helium tokens during the first three months—a practice common among blockchain projects, albeit contradictory to the principles of decentralization.

Consumers like Gold also rushed into the project, buying up approximately $500 million worth of hotspots. Rather than producing the devices themselves, Helium relied on third-party manufacturers, resulting in varying degrees of quality and longer fulfillment times.

“I think from [Helium’s] perspective, they didn’t want to come off as, ‘We’re doing all the manufacturing and selling you these overpriced Raspberry Pis that mine our token,’” Gold said. 

This allowed secondary markets to proliferate. Gold’s first miner came from a company called Emrit, which sent him a free hotspot in exchange for 80% of the earnings. He would later apply elements of that transaction model to his own business.

Even as the network spread across the U.S.—and the world—through people setting up devices, its capabilities didn’t make much sense from an economic standpoint. IoT could transfer data across the network through “data credits,” which were used to buy HNT. Helium touted major clients like the electric scooter company Lime as using the network, although Lime later denied working with Helium beyond an initial test. (Nova Labs COO Frank Mong told Fortune that Helium had a pilot with Lime.) 

Today, Mong said that Helium has hundreds of clients who are using the network. Even so, most of the revenue is from other fees, such as onboarding new devices. As Fortune found, only around $1,150 generated in the last month came from actual data transfers.

In an interview with Fortune, Haleem, Helium’s CEO, explained that the IoT network is still in its infancy.

“For Helium to succeed over a decade-long window on the IoT network, there have to be hundreds of millions of devices using the network globally,” he said. “There’s no other way to slice the answer to that question other than there has to be a lot of traffic.” 

He declined to estimate how many devices are currently using the network.

Weaver, the Berkeley researcher, expressed skepticism that such an IoT network could attract enough companies to be sustainable. For one, he explained, because the network relies on a decentralized network of hotspots, it will always be patchwork. For IoT companies looking for consistent data transfer, Helium wouldn’t offer the most reliable service.

“[IoT Companies] also want to pay in actual money,” he told Fortune. “You’re not going to want to pay in some stupid third-party token that jumps up and down in value.”

Enter Helium Mobile. 

‘Getting as many lottery tickets as you can’ 

Haleem explained that Nova Labs as a company doesn’t collect revenue from people paying for new hotspots or IoT companies paying for data transfers, which instead goes to third-party manufacturers or the blockchain protocol powering the Helium network. Instead, the company is looking to other projects.

“We are now moving into a phase where we will focus ourselves in the form of revenue,” he said. “Helium Mobile is an example of that.”

The project has echoes of the IoT network, with people setting up hotspots in their homes or other locations and mining a crypto token as a reward. The major difference is that the major clients for the network will not be IoT companies, but everyday mobile users.

The principal challenge, of course, is coverage—for a cellular network to work, it can’t be patchwork. The hotspots are priced around $2,000 to $3,000. Currently, there are only around 5,000 Helium Mobile hotspots operational, and over two-thirds of them are “indoor radios,” meaning they would have questionable reception outside the buildings they’re housed in. An August report from PCMag critiqued the hotspots’ tech—powered by the Nova Labs-owned software company FreedomFi—questioning whether it could scale.

Haleem explained that Helium is dealing with the limitations of operating in unlicensed spectrum, admitting that the hotspots could never be able to compete with cell towers. “You’re not trying to create that apples-to-apples comparison,” he said.

Instead, he argued that most cell usage happens indoors, which would be the target of the network, helping provide coverage through hotspots to places where cell service struggles, like rural areas or crowded locations. “We’re not trying to compete with major telecoms operators,” he told Fortune. “This is a cellular network that is going to exist in places where traditional networks either can’t exist or don’t exist.” 

To help with the rest of the coverage, Helium recently announced a deal with T-Mobile in which whenever Helium Mobile customers can’t access Helium network, their devices automatically revert to T-Mobile’s. Wong, Helium’s COO, said that the price point will be $5 per month for 1 gigabyte of data usage. No other plans have been priced out. The company’s targeted launch date is early next year. 

“We believe Helium Mobile is pursuing a very nascent and exciting market segment,” Dan Thygesen, T-Mobile’s senior vice president of wholesale, said in a statement. “T-Mobile is excited to support Nova Labs’ innovation in this new crypto-powered space.”

Weaver described Helium Mobile as a run-of-the-mill MVNO, or mobile virtual network operator, which doesn’t provide its own infrastructure but instead leases a network from a bigger operator.  

“As a service, they offer nothing over consumer cellular,” he said. 

Gold, the IoT hotspot mogul, has scaled down his Helium IoT hotspot business, focusing on other decentralized wireless projects such as the competing crypto-powered mobile network Pollen. Rather than onboarding new IoT hotspots, he focuses on governance issues within Helium, hoping it pushes back up his HNT holdings. He also founded the People’s Antenna brand, a popular merchandise and equipment platform within the Helium community.

Gold views Helium Mobile similarly as Weaver. “They’re calling it a crypto carrier, but it’s an MVNO,” he told Fortune. “It’s a way for them to start making actual dollars to support their billion-dollar valuation.” 

That didn’t stop him from buying a hotspot—two, in fact. One is indoors, and the other is outside his apartment and covers Minute Maid Park in his hometown of Houston.

“There’s so much luck involved with this that it’s just spreading out into different projects, and getting as many of these lottery tickets as you can,” he said.