Internet Computer Crypto: A Guide To The Popular New Crypto Already Worth Billions
Although Internet Computer (ICP) doesn’t have the catchiest name on the cryptocurrency market this project has the potential to revolutionize not only the world of blockchain but also the internet itself with its ambitious Web 3.0 goals.
The project is fueled by its native ICP token, which saw its price skyrocket at launch and then came crashing back down. Now the token trades at a huge discount, so is this the right time to invest?
In this guide, we’ll give you all the information you need to decide whether or not ICP deserves a space in your crypto wallet.
What is Internet Computer Crypto?
The Internet Computer is a decentralized blockchain network that aims to create an ecosystem where smart contracts and dApps can run at high speeds without requiring a central server.
Essentially the developers and community believe that the network can overcome the scaling issues that have plagued the Ethereum (ETH) blockchain and, in the process, create a rapid web 3.0 platform.
Unlike Ethereum, the Internet Computer aims to operate at high speeds and meager costs, making it an excellent platform for dApp developers.
The idea that drives the project is the use of nodes worldwide to power a network instead of having one central database like current Web 2.0 systems such as Google’s cloud services. The decentralized model prevents one central player from gaining too much power over the web and inflicting bias on the system.
Furthermore, a decentralized web will not require users to manage and secure centralized databases that are very vulnerable to hackers.
The project has five key features that will help it achieve its goals:
- Chain Key Technology: Using the cryptographic protocols, nodes can be added to the network securely using this technology, allowing the protocol to scale.
- Non-interactive Distributed Key Generation (NIDKG): Without getting too far into this feature, it essentially makes verifying shares possible without sacrificing confidentiality.
- Network nervous System (NNS): The NNS is the governance system that allows the community to influence the direction of the project’s development.
- Internet Identity: The project will allow users to create secure online identities.
It’s worth noting that the grand ambitions of this project are, for now, mere ‘ambitions,’ but this isn’t necessarily a bad thing, as learning about a project before it goes mainstream can be a very profitable venture.
How Did The Internet Computer Become So Instantly Popular?
When the ICP launched back in early 2021, its market capitalization skyrocketed, hitting over $35 billion within 72 hours and raising around $100 million from venture capital firms during its development.
The astronomical rise of ICP in such a short period of time turned many heads in the community and got people asking why it was so popular.
Although it’s impossible to pinpoint exactly what led to the hype around the project on launch day, there are a few theories.
Firstly, ICP’s potential to become an ‘Ethereum’ killer network had many investors thinking that picking up some ICP tokens early would be an excellent long-term investment.
Secondly, the smart contract compatibility combined with the promises of high speeds and low costs made people think that ICP would grow into a flourishing dApp ecosystem.
Thirdly, the hype around Web 3.0 has been growing for years now, and finding a winner amongst the crowd of projects promising to deliver a decentralized web is no easy task; ICP looked like it could be a Web 3.0 champion, so people rushed to get into the project early.
How Internet Computer Differs From Other Cryptocurrencies
When Internet Computer launched, it promised to beat Ethereum at its own game by standing out from the layer-1 crowd through some notable differences such as very high speeds, low costs, and scalability. In addition, the developers embed some unique features into the network, such as the Chain Key technology and NIDKG.
However, the most remarkable difference from other cryptos is the Internet Computer’s potential ability to run applications from the current version of the web on its blockchain — this use case is yet to be realized in full, but if it did, ICP would set an impressive milestone in the web 3.0 story.
What Risks Might the Internet Computer Face?
The primary risk that the Internet Computer faces is the entry barrier that nodes need to overcome in terms of hardware. If the hardware is too expensive, only wealthy organizations and individuals will become nodes on the network, increasing the centralization of ICP.
Ethereum 2.0 is expected to merge this year, and this could lead to the network becoming more scalable and cheaper, potentially undermining ICP’s status as a viable alternative to Ethereum.
Another risk the project now faces is fierce competition, cryptocurrencies such as Cardano (ADA) and Solana (SOL) are offering features that also compete with Ethereum and could potentially make Internet Computer redundant.
Who Originally Developed The Internet Computer?
Dominic Williams started the project, and the Switzerland-based non-profit DFINITY foundation is responsible for its development.
The DFINITY Foundation has harnessed the skills of researchers and engineers from all over the world and in the process patented over 200 technologies showing how serious the organization is about innovation.
The ICP Token
The ICP token functions in a very similar manner to other cryptos through three use cases:
- Governance: ICP holders can lock up their tokens to create ‘Neurons’ which participate in governance by voting on proposals.
- Rewards: Operating nodes and locking up tokens in ‘neurons’ is incentivized with ICP rewards.
- Fuel: ICP is burnt when used for transactions, and the amount that’s burnt changes depending on the market, meaning fees are variable.
The ICP token’s price history has been highly turbulent; following the launch, it hit an all-time high of over $700, but since then, it’s been struggling to gain momentum and trades at an over 95% discount for just $6.
When Internet Computer launched, the crypto world went mad, and billions of dollars flooded into the project that people believed would build the future internet.
Unfortunately, the truth is that the developers behind ICP have embarked on a long quest and not one that guarantees short-term rewards, so the launch day speculators have been burnt as the network’s token has taken a nosedive from last year’s highs.
However, the Internet Computer dream is not dead as long as the experts at DFINITY continue to work on the project that has its eyes set on the web 3.0 prize. The fact that nearly 100 dApps are already running on the network shows that ICP has a lot of potential.