Internet Computer (ICP) is a utility token that allows users to join and manage the Internet Computer blockchain network. By “putting their code directly on the public Internet,” the network hopes to assist developers in creating websites, enterprise IT systems, internet services, and DeFi apps. ICP can also be pegged or “converted into cycles” for usage in dApps and regular applications.
What is Internet Computer (ICP)?
The Internet Computer Protocol (ICP) is a set of protocols that enable independent data centers all over the world to band together and provide a decentralised alternative to today’s centralized internet cloud providers. The ICP token is used for governance (holders can vote on the network’s future), to reward good behavior among network participants, and to pay transaction fees.
The Internet Computer Protocol, like many other projects in the cryptocurrency arena, is much more than a type of digital currency. In reality, the ICP token is only a small element of a much larger concept. The basic idea behind ICP is to create a new type of decentralised internet and global computing system in which independent data centers from around the world collaborate to create an alternative to the cloud services (provided by companies such as AWS and Google Cloud) that currently power the majority of the internet. The protocol will be installed on millions of computers around the world, according to the ICP.
The resulting network, according to ICP creators, has several important advantages over centralised alternatives. For starters, it adheres to open standards, avoiding the potential for conflicts of interest that might occur when a major cloud computing provider runs products that compete with its own. ICP’s worldwide and dispersed network of data centers, formerly known as DFINITY, can run all of the applications that are available via traditional Internet standards such as DNS
How does it work?
Today’s Internet is extremely centralised. Popular web apps are frequently closed-source, proprietary, and stored in a limited number of data centers controlled by large tech companies. And if a critical data center goes down, it can bring down large swaths of the internet with it. Another big issue (especially among privacy activists) is the capacity of centralised, corporate web-services providers to censor or deplatform applications.
The Internet Computer aims to provide a fundamental alternative that will allow developers to design, host, and serve applications in a more decentralised manner, allowing websites to be distributed directly onto the public internet. Furthermore, the Internet Computer would promote 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, roaming between servers controlled by independent data centers around the world,” according to an Internet Computer feature in the MIT Technology Review.
ICP can be seen as a means to turn crypto into processing power: the network will set a cost according to how much computing power a developer’s project requires. As long as the fee is paid, the website will be accessible via the public internet.
In theory, any type of program may be written and run on an Internet Computer, from social networks like LinkedIn and Instagram to software that is identical to all of the familiar applications you use now, to new types of applications that have yet to be imagined.
Risks that Internet Computer could face?
Participating in the Internet Computer may necessitate more powerful hardware than other blockchain projects, thus jeopardizing the project’s decentralisation ethos by limiting the number of members. Only large and well-capitalized players would be able to establish data centers and participate if the hardware requirements are too high.
Who can be held responsible for hosting harmful information in a decentralised network? Corporations that control the Internet today employ some form of moderation, but they also have the power to deplatform anyone at any time. In an ideal world, Internet Computer (and other crypto protocols) will be able to develop solutions that enable decentralised governance to address these complex issues.
ICP Background
The Internet Computer is built by the DFINITY Foundation, which was founded in 2016 by a developer named Dominic Williams. The DFINITY Foundation is a non-profit organization dedicated to researching and developing the Internet Computer, which has officially launched in May 2021 after years of research. Researchers from all over the world contribute to the work of the foundations, including cryptographers with over 100,000 academic citations and 200 patents.
Pros and Cons
| PROS | CONS |
|---|---|
| The Internet Computer provides a decentralised, censorship-free framework. | In just a few days of trading, ICP has seen large jumps and sharp declines, making it extremely volatile and susceptible to fluctuations. |
| The Internet Computer is open to the public and can be accessed by anyone in the world. | Regardless of technological advancements, ICP is not significantly different from other altcoins. |
| Internet Computer began its journey with significant investor interest, charting the course from the start. | Its decentralisation and permissionless transactions are fraught with uncertainty. |
| ICP is available on the majority of cryptocurrency exchanges. | The future of ICP and the network is based on possibilities rather than certainties. |
| Since their introduction, Internet Computer and ICP have gotten a lot of attention. | |
| Development is supported by a strong and stable team. | |
| Smart contracts are supported, and more can be added in the future. |
Closing thoughts
The Internet Computer promises many advantages, but those who trade cryptocurrency should be aware of what they are purchasing. All of this is part of risk management when dealing with cryptocurrencies, which have volatile price swings that can easily shake out inexperienced traders. As a result, it is easy for people to become engrossed and make emotional decisions without considering their long-term goals.