(Bloomberg) -- In another example of crypto being back in vogue, Nova Labs Inc. is going nationwide with a mobile plan that costs $20 a month for unlimited text, talk and data, all while using blockchain technology, as well as the T-Mobile wireless network.
The move isn’t crypto’s first foray into telecommunications. Los Angeles-based Nova Labs launched a similar $5 offering in August under its Helium Mobile brand that was limited to customers in Miami. Other companies including Solana Labs and Sirin Labs, have developed blockchain mobile phones that saw mixed results.
But Nova Labs Chief Executive Officer Amir Haleem said in an interview that the success of the Miami plan, which will continue to cost $5, paved the way for the $20 offering from Helium Mobile. “We certainly saw a lot of demand and a lot of requests for a nationwide plan,” he said. Haleem declined to comment on how many customers currently use Helium Mobile.
The network functions through the use of wireless hotspots that users can set up in their own homes. Nova Labs offers both an outdoor version that costs $499 as well as indoor one at $249. If a Helium hotspot isn’t in range, the phone will switch to the network belonging to T-Mobile, which declined to comment for this story. Haleem said that hotspot owners earn crypto tokens called MOBILE as people use the Helium network.
“It’s around 50 cents a gigabyte that you’ll earn in MOBILE tokens, so if there’s someone sitting near one of your hotspots, like streaming a Netflix movie or something, you will earn per gigabyte as that person is using your hotspot,” he said.
The price of MOBILE does fluctuate, but Haleem said “it always costs 50 cents a gigabyte for someone to use the network and then there’s a conversion that happens where the hotspot host will receive a requisite number of mobile tokens depending on what the value of MOBILE is at that time.” The token traded at around 6 cents on Tuesday.
He noted that the Helium system has multiple tokens, including one that acts as a stablecoin and stays the same price. He said that while the system is algorithmically based “to some degree,” it’s different from the relationship between the TerraUSD algorithmic stablecoin and the Luna token, both of which saw an epic collapse with serious repercussions for the crypto industry in 2022.
Originally named Helium Inc., Nova Labs was founded in 2013 and developed a decentralized wireless network for the “internet of things.” With a model similar to Helium Mobile, the network provides connectivity for wireless devices like pet-tracking collars and environmental sensors and rewards hotspot owners in crypto tokens for offering coverage. Haleem said Nova Labs is still developing offerings related to its IoT network.
In 2022, Nova Labs raised $200 million at a $1.2 billion valuation from investors led by Tiger Global Management and Andreessen Horowitz, but came under fire from crypto investors later that year for saying Salesforce Inc. and electric scooter company Lime were using its wireless network services when they were not.
Nova Labs told Bloomberg it had previously had a relationship with Salesforce. A Salesforce spokesperson told The Verge in 2022 that the company was not one of its partners and that a graphic on the Nova Labs website that showed the Salesforce logo under the heading “Helium is used by” was “not accurate”. Nova Labs later removed the Salesforce logo from the website.
(Updates to add that Nova Labs says it has worked with Salesforce in 10th paragraph)
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