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Internet Computer (ICP) is a set of protocols that allow independent data centers around the world to band together and offer a decentralized alternative to the current centralized internet cloud providers. The ICP token is used for governance (holders can vote on the future of the network), to reward network participants for good behavior, and is used to pay fees for making transactions.
Like a lot of projects in the cryptocurrency space, the Internet Computer Protocol (or ICP) is much more than a form of digital money. In fact, the ICP token that can be purchased and traded via exchanges like Coinbase is just one part of a much bigger idea. ICP’s basic idea is to create a new kind of decentralized internet and global computing system — where independent data centers all over the world could join together to create an alternative to the cloud services (from companies like Amazon Web Services and Google Cloud) that power most of the current internet. ICP’s plan is to have the protocol running on millions of computers around the world.
ICP developers say the resulting network has some key advantages over the centralized alternatives. For one, it operates via open standards and avoids the conflicts of interest that can arise when a major cloud-computing provider hosts products that compete with its own services.
Originally called DFINITY, ICP’s global and distributed network of data centers can run all of the applications that are accessible via traditional Internet standards such as DNS (the domain name system you use via web browsers and smartphones).
The ICP token has several major uses: it acts as a governance token (allowing holders to “lock” some of their ICP into the network in exchange for having a say in the future development of the ICP protocol), is rewarded by the network to participating data centers for good behavior, and is used to pay transaction fees on the network.
The Internet today is highly centralized. Popular applications on the web are often closed-source, proprietary, and are hosted on a handful of data centers owned by big tech firms. And if one critical data center fails, huge swathes of the web can also shut down with it. Another major concern (particularly for privacy advocates) is that centralized, corporate web-services providers have the ability to censor or deplatform applications.
The Internet Computer attempts to offer a fundamental alternative so that developers can build, host, and serve applications in a more decentralized way — allowing websites to be deployed directly onto the public internet. Further, the Internet Computer would incentivize open source and transparent software development.
“Instead of running on a dedicated server in Google Cloud, for example, the software would have no fixed physical address, moving between servers owned by independent data centers around the world.”
One way you can think of ICP is as a way of converting crypto into processing power — the network will establish a fee based on the amount of computing power required by a developer’s project. As long as the fee is paid, the website will run on the public internet.
In theory, any kind of application can be created and run on the Internet Computer — from social networks similar to LinkedIn and TikTok to software similar to all the familiar applications you know today to new kinds of applications not yet conceived. As a demonstration, ICP developers have published open source code for CanCan, which they describe as a “decentralized TikTok.”
The Internet Computer is built by the DFINITY Foundation and was started by a developer named Dominic Williams in 2016. The DFINITY Foundation is a nonprofit organization devoted to researching and developing the Internet Computer — after years of research, it officially launched in May 2021. Researchers all over the world contribute to the foundations’ work — including cryptographers that hold around 100,000 academic citations and 200 patents.
DFINITY aims to replace the traditional IT stack and disintermediate large tech companies with its Internet Computer — a public blockchain network hosted by a collection of independent data centers around the world. The standard behind DFINITY’s Internet Computer — the Internet Computer Protocol (ICP) — allows software to run on the internet in a distributed manner, as opposed to using servers controlled by large companies. This makes it possible to develop applications that no one entity owns, controls, or censors, thus creating the opportunity to rebuild popular internet services like social media applications in an open, decentralized fashion.
DFINITY claims that its Internet Computer is highly scalable and runs at web speed, with some functions taking only milliseconds. The network is governed by an open autonomous algorithmic software system called the Network Nervous System (NNS), and its native utility token is ICP (previously known as DFN). The Internet Computer was built by the DFINITY Foundation, a not-for-profit organization based in Zug, Switzerland.
The company’s CEO and chief scientist Dominic Williams first ideated the Internet Computer Protocol (ICP) after conducting extensive research into blockchain from 2014 to 2015. During that time, Williams spent much of his time analyzing various consensus mechanisms, including Byzantine Fault Tolerance (BFT). He became convinced that many of these mechanisms possessed significant flaws, and developed the Internet Computer Protocol (ICP) with the goal of improving upon BFT and related technologies.
DFINITY’s unique infrastructure unlocks benefits of speed and efficiency when compared to open, public networks like Ethereum and Bitcoin because it does not hold itself to the same standards of decentralization in its nodal network and consensus mechanism. This makes DFINITY particularly useful for limited engagement networks and use cases befitting enterprises, rather than general public use that requires more equitable access. While many blockchain networks are slight modifications of one another built to achieve incremental gains in utility, DFINITY has launched a wholly unique iteration of blockchain tech that is brimming with utility and potential.
DFINITY’s Internet Computer could provide solutions to critical problems facing the technology industry, including security and scalability issues and the monopolization of internet services. DFINITY is one of many projects competing to solve these issues in the race to provide the infrastructure for the next generation of the internet.
The DFINITY Internet Computer network is made up of four building blocks organized in hierarchical order. At the base, there are the independent data centers that host network nodes. Unlike Bitcoin and Ethereum, Internet Computer nodes must meet a minimum standard of technical specifications, so not every computer or machine can run a node.
Participating in the Internet Computer may require more robust hardware than traditional blockchain projects, potentially threatening its ethos of decentralization by limiting the number of potential participants. If the hardware requirements are too large, only large and well-capitalized players would be able to set up data centers and participate.
Further, in a truly decentralized network, who can be held accountable for hosting abusive content? Corporations running the Internet today employ some degree of moderation, although the flip side is that they can also arbitrarily de-platform anyone at any time. Ideally, Internet Computer (and other crypto protocols) can create solutions that allow decentralized governanceto moderate these difficult questions.
Internet Computer isn’t the only protocol aiming to reinvent the Internet. Other potential competitors include IPFS/Filecoin and MIT’s Solid (which was created by web pioneer Tim Berners-Lee).
Unlike on competing platforms, the end user does not pay for the computational outputs of smart contracts (or canisters) on the Internet Computer. These canisters are pre-charged with “cycles” and instead pay for their own computations through something of a “reverse-gas” model.
This has several benefits. For one, users don’t have to own any cryptocurrencies to interact with the ICP — eliminating a significant barrier to entry. Users also don’t even need to know that the service they are interacting with is based on decentralized technologies, making the process a seamless experience to what they are accustomed to today.
Instead, data centers receive remuneration for their services in the form of ICP tokens. Some of these tokens are used to charge canisters with cycles. As the computational resource of the Internet Computer, cycles are gradually depleted with the use of each canister, and must be regularly replenished. The cost of each cycle will be set by the network’s governance system, and should tend towards a stable value over time.
This governance system, known as the Network Nervous System (NNS) was first revealed by the DFINITY Foundation in September 2020. The NNS is responsible for “controlling, configuring, and managing” the network. To participate in network governance, users will need to lock up ICP tokens for a given period of time. This process creates “Neurons” which entitle the user to voting on governance proposals to help shape the network and earn governance rewards
The Internet Computer is powered by a four-layered consensus mechanism based around proof-of-stake (POS). It consists of an identity layer, a random beacon layer, a blockchain layer and a notary layer. Together, these layers enable provable security and resistance to known attack vectors (like Sybil and 51% attacks) while maintaining decentralization and ensuring the network can scale to support millions of participants.
The Internet Computer project is being worked on by one of the most extensive teams in the crypto space, or to directly quote DFINITY, it is being built by the “industry’s most distinguished team of distributed computing engineers, cryptographers and operational experts.” Its development is led by DFINITY founder and chief scientist Dominic Williams — an experienced entrepreneur and crypto theoretician who pioneered DFINITY’s threshold relay and PSC chain technology.
Unlike Ethereum, which looks to provide the technology stack for decentralized applications (DApps) primarily concerned with moving and using digital assets (like ETH and ERC-20 tokens), the Internet Computer is tasked with replacing the traditional internet by allocating special identities to data centers and using transferring the ICP’s governance over to the end-users.
On one side, Ethereum uses smart contracts to automatically enforce agreements and actions. The Internet Computer, on the other hand, uses canisters; which are very similar to smart contracts, but are built to be ultra-scalable.
Beyond this, the two platforms differ considerably in their speed and efficiency. While Ethereum currently suffers from relatively high transaction fees and slow transaction confirmation times (largely due to congestion), the Internet Computer’s massive throughput ensures it is able to achieve absolute transaction finality in 5-10 seconds, with practically unlimited scalability thanks to the innovation of threshold relays.
ICP crypto token is the native utility token of the Internet Computer Protocol network. These tokens are used to vote on proposals that shape the future of the network. The ICP token holders have the power to govern the network. Participating data centres can earn ICP tokens for showcasing good behaviour on the network, which they can use to pay for transaction fees. One can also trade these coins on various crypto exchanges.
The Internet Cache Protocol (ICP) is an object location protocol that enables caches to communicate with one another. Caches can use ICP to send queries and replies about the existence of cached URLs and about the best locations from which to retrieve those URLs.
The idea of changing the way the internet works without any cooperation from the tech-giants has fascinated many people. But let’s understand the positive and negative effects it could bring along.
First, let’s look at the advantages of the Internet Computer Protocol:
Now, looking at the disadvantages, ICP is fairly new to the system, and it has faced quite a lot of struggle in the primary years. The kind of change it aims to bring has stirred doubts among the people about its intentions.
With that in mind, these performance advantages are seen when comparing the Internet Computer to the current state of Ethereum. With the gradual roll-out of Ethereum 2.0, these differences could change considerably.
ICP made a huge splash when it launched in May 2021, hitting an all-time high of $750 and ascending to fourth in crypto market cap rankings, which generated further interest from speculators and traders. However, as seen on the ICP chart on CoinMarketCap, ICP price has suffered from huge selling pressure and a drawdown of almost 98% from its ATH. The reason for this price performance was likely due to insiders moving $2B worth of ICP tokens to crypto exchanges, spooking investors on a possible dump. However, with retail interest in ICP still at a considerable level, likely due to strong project fundementals, notable backers and contributors to the project and high number of github commits, leading top crypto exchange like Kraken to list ICP.
ICP made a huge splash when it launched in May 2021, hitting an all-time high of $750 and ascending to fourth in crypto market cap rankings, which generated further interest from speculators and traders. However, as seen on the ICP chart on CoinMarketCap, ICP price has suffered from huge selling pressure and a drawdown of almost 98% from its ATH. The reason for this price performance was likely due to insiders moving $2B worth of ICP tokens to crypto exchanges, spooking investors on a possible dump. However, with retail interest in ICP still at a considerable level, likely due to strong project fundementals, notable backers and contributors to the project and high number of github commits, leading top crypto exchange like Kraken to list ICP.
The idea of ICP is fascinating if you think about it. If it successfully does what it has set out to accomplish, it will change the way the internet functions and how it is now, forever. The internet is controlled and modified by a larger group of people who have direct access to a global data system.
Changing the status quo is quite challenging; however, creating a cloud-based internet that is powered by a decentralised system is not impossible. The world of cryptocurrency has been evolving continuously, and the future of ICP looks positive.
Internet Computer Crypto has the potential to bring revolutionary changes to the current internet system. If implemented successfully, it will provide an opportunity for innovation and growth along with a more accessible & secure networking structure.
Currently, Dfinity has the largest Research and Development team in the crypto world, and they are working towards transforming the World Wide Web.
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