A Beginner’s Guide: What Is Internet Computer Coin?

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The world of cryptocurrencies has shone a spotlight on the concept of decentralization more than ever before. Cryptocurrencies have introduced real-world concepts into a virtually encrypted world. The creation of Bitcoin marked the infancy of a digital currency resembling gold. 

While Bitcoin served merely for transaction purposes, Ethereum later made daily life services possible in a decentralized manner. More importantly, the world of finance began to evolve into something much more efficient with the introduction of decentralized finance (DeFi).

But these major innovations are only the beginning. A new invention that can change not only the concept of cryptocurrencies but also everything we have on the internet has been launched. That is the Internet Computer Protocol (ICP). 

The ICP is not merely a network. It can also be a profitable investment for cryptocurrency traders. To understand the potential of this relatively new project and how lucrative it can be for investors, we’ll learn about some of the main components that make ICP so unique, as well as what its future may entail. Let’s begin with some basic information about the Internet Computer.

What Is Internet Computer?

The Internet Computer is a blockchain-based network that can run at web speed with the potential to “reinvent” the internet. The native token of this network is the ICP token. This coin serves as a utility token, and has several roles in the network. 

How Does Internet Computer Coin Work?

In terms of functionality, the Internet Computer is one of the most complex networks in the cryptocurrency market. Creators of the ICP plan to replace the current internet infrastructure, which is primarily private. The main purpose of ICP is to replace the centralized internet that people use today. 

The technology behind ICP is called Chain Key Technology. This technology consists of other systems, namely those of Threshold Relay consensus, Network Nervous System (NNS), Internet Identity (IID), and a few more that we will cover shortly. 

The Internet Computer Network consists of 48 data centers around the world. Within these centers, thousands of nodes run, securing the network. These nodes form subnets when they are grouped. Subnets are considered blockchains in themselves, and have a Proof-of-Stake (PoS) mechanism.

The more tokens that are staked, the more you can be rewarded. The subset of nodes that are selected to validate transactions and be rewarded with tokens are chosen depending on the staked tokens. This technology is the first of its kind, and is known as Threshold Relay.

Similar to Ethereum, the Internet Computer Network supports the launch of decentralized applications (DApps) in its network. However, smart contracts are too simple to work on the ICP network, so the “upgraded” version of smart contracts in the ICP network is known as canisters.

Canisters are able to replicate and update themselves in other subnets without the help of the host. These canisters run in the most powerful data centers of the ICP network. This is the reason why ICP can run at web speed, making it so efficient.

Additionally, unlike smart contracts, users do not need to pay gas fees for working with canisters, unless transactions are involved. The programming language of canisters is Motoko.

Another feature of the ICP network is the Internet Identity (IID). Anyone who wants to purchase ICP tokens or use them for the services in the ICP network needs to create an Internet Identity.

When creating an IID, you also create a wallet for your ICP tokens. The device you use for creating the IID is going to be the same device you use for confirming transactions. Moreover, you can use that device to sync other devices within the same IID. 

Chain Key Technology, mentioned above, allows the subnets in the ICP network to communicate with one another. This is achieved through the Network Nervous System (NNS) of the ICP. So what exactly is this NNS?

The NNS runs in a hierarchy system. The first level is the data center level, where the NNS decides which nodes can join the network and which ones cannot. The second level is the node level, where the NNS is responsible for identifying underperforming nodes and removing them from the network.

The third level is the subnet level, where the NNS is responsible for deciding which nodes form a subnet, as well as generating subnet keys (public and private). The next level is the canister level, where the NNS decides whether canisters need to be updated or not. 

The NNS itself runs through canisters. The canister types in the NNS are ledger canisters, registry canisters and governance canisters. Ledger canisters contain all the information about the IIDs in the network. Registry canisters are involved in the organization of the network. Governance canisters are involved in the voting systems of the network.

The ICP token is the native utility token of the Internet Computer. The total supply of Internet Computer is around 470 million ICP. Currently, there are around 124 million ICP tokens circulating. The rest of the ICP tokens are planned to be vested in the upcoming years. 

There are three use cases of the ICP token in the ICP network:

  • Governance: uUsers can lock their ICP tokens and use them to create Neurons. These neurons are used to vote for the governance of the network.
  • Canister fees: Users can convert their ICP tokens into Cycles. Unlike ICP tokens, cycles have a stable long-term price. Theys can be used to pay canister fees in the network. 1 ICP is equivalent to 1 trillion cycles. The used cycles are then burned so that their value is not prone to inflation.
  • Rewarding: Users who lock their ICP can vote. Since the locking period can vary from six months to eight years, the network rewards the voters for their participation based on the number of tokens locked. Also, data centers receive rewards for securing the network.

To become a node in this ICP network, you should apply for a Data Center ID (DCID) in the Network Nervous System (NNS). You should get a hold of the machines required, install the required protocols, and link your node with the network.

Origins of Internet Computer Coin

The Internet Computer was created and launched in 2016 by DFINITY Foundation, which is a non-profit organization. DFINITY is based in Switzerland, and is composed of some of the best crypto experts, computer scientists and programmers in the world. Some of them have previously been involved in various projects for companies such as Google, YouTube and AsicBoost.

The expertise at DFINITY has established enough credibility for people to realize that what they are working on is a very serious project. The founder of DFINITY is Dominic Williams, an entrepreneur and an early engager in cryptocurrency communities for the likes of Bitcoin and Ethereum.

Prior to starting DFINITY, Williams was president of String Labs and was also part of many crypto-based startup projects, helping him acquire the experience needed to devise Internet Computer.

To develop the project, DFINITY held Initial Coin Offerings (ICO) which raised a sufficient amount of money. In their first public ICO in 2017, 25% of ICP tokens were sold for around $4.1 million. Most of the investors in this public ICO are believed to be people from the Ethereum network.

The first private ICO was in 2018, when 7% of the ICP supply was sold at a total of around $20 million. The second private funding of the Internet Computer Protocol took place later that year, in which 5% of the ICP supply was sold for a total price of around $105 million.

The rest of the ICP tokens were allocated to the DFINITY team. The tokens allocated on the public seed sale are planned to be vested monthly in the next four years. Overall, the funding of ICP turned out to be a huge success, as more than $120 million was raised.

The first real development of ICP was marked with their Copper release, when the software developer kit (SDK) and the programming language Motoko were launched. This was done in the fourth quarter of 2019. In the first quarter of 2020, Bronze marked the second phase of development.

This introduced the first decentralized application on the network, titled LinkedUp. LinkedUp was a networking app, resembling the LinkedIn app. The project was hosted by the World Economic Forum (WEF). Next, DFINITY’s Tungsten phase allowed third parties to develop more apps in the ICP network.

One of them was CanCan, a decentralized version of TikTok. After Tungsten came the Sodium milestone, which introduced the way that ICP is governed as well as other features. Last but not least, the Mercury milestone was marked when the network went public and the ICP token was released in the market.

Internet Coin Price History

ICP’s all-time high came on the very first day of its release, at a price of $640 on May 10, 2021 per CoinMarketCap. This was unusual, considering it was the first day of its launch. Investors started selling and the price dropped close to $250 on the same day.

Unsurprisingly, others bought the dip and increased the price again at around $550 by the next day. However, the price of ICP has been decreasing ever since. As of May 26, the price of ICP is around $130.

The price of Internet Computer (ICP) since its release in May 2021. Source: CoinMarketCap

Since the circulating supply is around 124 million ICP and its price is around $130, the market capitalization of Internet Computer is around $16.5 billion. This makes Internet Computer a large-cap cryptocurrency and places it among the top 10 biggest cryptocurrencies in the market, based on market cap. The fully diluted market cap of ICP is around $62.3 billion.

Internet Computer Coin Current Projects

Currently, there are several projects built on Internet Computer that have increasingly begun receiving attention.

In the DeFi field, apps like Enso Finance, Tacen, and Sailfish have raised millions of dollars and are looking very promising for providing efficient financial services.

In the social fields, CanCan (the decentralized version of TikTok) was one of the first DApps to demonstrate that even social media can become a part of the Internet Computer. Other apps such as Distrikt (the rebranded version of LinkedUp), OpenChat and Capsule have also raised millions of dollars, introducing social media in open versions.

Lastly, in the infrastructure field, projects such as Fleek and Origin are starting to become fundamental in showcasing Internet Computer’s capabilities.

The Future of Internet Computer Coin

At the moment, there are around 200 members of the DFINITY team. They plan to double that number in the next five years, as well as increase their community.

According to the road map of ICP in the recent Medium article, the Internet Computer plans to become a solid alternative to today’s internet within the next decade. The article claims that, in the next 20 years, the Internet Computer plans to obviate the companies controlling today’s internet, such as Google, Facebook, Amazon and Microsoft.

Interestingly enough, as promising as this big project looks, it has received a lot of internet backlash. The reason: the team behind the Internet Computer has full leverage over what happens in the network, rendering it somewhat centralized.

Moreover, linking everything to an internet identity could end up removing the sense of autonomy that the internet and cryptocurrencies offer. So at this time it is uncertain whether people may keep supporting such a project, especially since it is connected to the WEF and plans to be the only authority behind the future of the internet. Nevertheless, in the long run the ICP token is quite a promising investment.

The Bottom Line

The Internet Computer could prove to be one of the biggest technological innovations in the cryptocurrency era. It has captivated many people in crypto communities and is becoming a serious factor in the future of tech giants such as Google and Amazon. It has taken blockchain technology by storm. The future for ICP looks bright.

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Disclaimer

This article is intended for and only to be used for reference purposes only. No such information provided through Bybit constitutes advice or a recommendation that any investment or trading strategy is suitable for any specific person. These forecasts are based on industry trends, circumstances involving clients, and other factors, and they involve risks, variables, and uncertainties. There is no guarantee presented or implied as to the accuracy of specific forecasts, projections, or predictive statements contained herein. Users of this article agree that Bybit does not take responsibility for any of your investment decisions. Please seek professional advice before trading.

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