The ICP Token promises a lot of new innovation in the field of cryptocurrency. Here's all you need to know about Dfinity's new cryptocurrency.
Are you curious to know why everyone is talking about the Internet Computer coin? What is the Internet Computer coin? Here at the Dfinity Community, we've written many articles about this exciting and promising new cryptocurrency. We know that the present article will retread familiar ground for some of our readers. Still, one year after its public launch, it's fitting to recap everything you need to know about the DFINITY Foundation's cryptocurrency in one place!
The coin itself is called ICP, and this upstart cryptocurrency promises to revolutionize the Internet as we know it. And due to plummeting prices in the current cryptocurrency bear market, experienced investors are flocking to buy into the Internet Computer crypto ecosystem while it's cheap. "How high could it go?" asks Trevor Jennewine at The Motley Fool. "If the Internet Computer were to surpass Ethereum's peak market value of $569 billion, that would mean 150x returns from its current valuation of $3.6 billion [as of 3/11/2022]." Best of all, for people who decide to invest now, at the time of writing, when ICP costs only about $8 USD, returns could go as high as 300x! This cryptocurrency could make you significantly richer in the long run.
Of course, we at the Dfinity Community are not able to offer our readers financial advice. We can, however, share our experiences and opinions, as I did when I wrote about my reasons for investing in the ICP ecosystem. We've had an extremely positive experience building our ICP Squad NFT project on the Internet Computer crypto's incredibly flexible and lightning-fast blockchain.
Did you know that by January 5, 2022, ICP's performance evaluation showed that it was executing up to 11,500 transactions per second with a 1-second finality? Moreover, ICP was running updates in 2 seconds and queries in 200 milliseconds. In contrast, Bitcoin took 40 minutes, Ethereum took 15 minutes, and Solana took 16 seconds to perform similar tasks. In terms of performance, ICP is incomparable! How fast is fast? Check out how ICP leaves its competitors in the dust.
What is ICP?
Bitcoin brought us the concept of digital gold. Next, Ethereum launched the decentralized finance revolution and popularized the notion of running software on blockchains. Now, ICP heralds the third great innovation in blockchain technology by extending, decentralizing, and enhancing the World Wide Web. For the first time ever, all public Internet users can enjoy the privacy and peace of mind that comes with end-to-end blockchain security.
Simply put, ICP is the long-awaited backbone for Web3, the decentralized Internet of the future. Dominic Williams, the charismatic leader and spokesperson of the DFINITY Foundation, calls it "a paradigm shift that will change everything."
More specifically, ICP is a public blockchain that empowers online developers to eschew commercial cloud services, database servers, web servers, DNS services, firewalls, and all dependence on Big Tech's proprietary application programming (API) services.
Instead, developers are liberated to build and deploy secure, autonomous, and tamper-proof compute units called canisters, which can accomplish nearly anything imaginable. This includes, but is not limited to: tokenized Internet services, pan-industry platforms, DeFi and smart contracts, enterprise systems, and traditional websites.
All the technical details of canisters get pretty complicated, but the key takeaway is that canisters are an evolution of smart contracts that run software in a distributed, replicated way that also captures the complete history of that software's program states. Users interact with these canisters via an Internet Identity, an anonymous blockchain authentication framework that associates online activity with physical tech gear, such as a smartphone or laptop.
But regardless of what the Internet Computer crypto is, why does it matter? There are five reasons you need to know.
- First, ICP is democratically governed by its network nervous system, in which participants who have skin in the game via staked ICP shape the future of the ICP. In contrast, today's Internet, often called Web 2.0, is a jumble of proprietary networks and services overseen by Big Tech. In fact, corporations like Amazon, Google, Meta, and Microsoft control most application ecosystems and own and maintain a significant proportion of the physical infrastructure of the World Wide Web. Needless to say, because of Big Tech's excessive centralization of power and ownership, the potential for corruption, censorship, and failure in global communication systems is vast. Even worse, Big Tech may be inadvertently contributing to stalled technological innovation. To help rekindle much-needed innovation that unfortunately appears to have stagnated during the era of Big Tech, the ICA, a Geneva-based independent members organization, will advocate for the ICP and coordinate ecosystem participants without concern for corporate revenue. Your needs and values will drive the IC, not Big Tech's bottom line.
- Second, ICP secures your digital identity and activity against advertisers, hackers, and other malicious agents. Also, no more proliferation of passwords across dozens of Web services! ICP does away with the need for passwords (and associated hacking risks) using your Internet Identity to connect your online activity with your physical tech gear, such as a smartphone or laptop. This anonymous blockchain authentication framework ensures that you own your data, that your data is backed up by the blockchain, and that your access to your data is even more secure than with two-step verification. In case any of your physical devices get compromised, you can quickly recover your Internet Identity using a seed phrase that you've stored in a secure location. That's a lot easier than keeping track of dozens of different login credentials for a multitude of different Web services! You also won't have to worry about data leaks from centralized server hacks or pesky pop-up ads. Nobody can access your account or any information about you unless you willingly volunteer it or grant access to a registered physical device.
- Third, ICP reimagines smart contracts and software in a decentralized, integrated ecosystem that synchronizes services to best meet your needs. Indeed, it's valid to ask whether common cryptocurrency concepts like smart contracts can sufficiently explain the mechanics of the Internet Computer crypto. Canisters are, in fact, a remarkable evolution beyond smart contracts, and they are what empower ICP's amazing capabilities. These interoperable compute units are protected against external tampering and work across platforms and programming languages. Say goodbye to database servers, web servers, DNS services, and firewalls! None of these traditional features are needed or relevant due to the novel functionality of canisters. Someday soon, you'll be able to do everything (and more!) on ICP's blockchain that you can on the World Wide Web. Imagine a future where delays in train or plane arrivals are automatically communicated to your calendar and ride-sharing arrangements. Thanks to the near zero-cost of NFT (non-fungible token) transactions on the ICP, collective and individual ownership of intellectual property will be easy and tamper-proof to track and verify. For example, if someone steals a copyrighted image and reposts it, the fraud will be spotted immediately. Only the Internet Identity that owns the image, or has rights to use it, will be associated with that image's NFT. This can be checked almost instantaneously!
- Fourth, ICP presents an exciting new theoretical model of value that will complement Bitcoin by associating cryptocurrency with fiat currency's tokenization of utility without the weaknesses of centralized administration. Bitcoin alone can't beat fiat currencies because it digitally replicates an outmoded arbitrary, non-utility value model. Just like gold, Bitcoin only has value right now by popular consensus because it's scarce and difficult to mine. ICP goes beyond Bitcoin to embrace the advantage of directly tokenizing utility without the disadvantage of fiat currencies' centralized administration. Owning ICP allows participation in network governance using Network Nervous system (NNS) and can power cycles to run decentralized applications that do not depend on the whims of governments or major private entities like Google, Facebook, and Amazon. ICP promises to enhance Bitcoin and increase its practical value by associating it with utility. A recent vote to integrate the ICP with Bitcoin will allow smart contracts to directly operate on Bitcoin balances for the very first time. Rather than being an Ethereum Killer or Bitcoin Killer, the ICP is poised to enter into a symbiotic relationship with existing cryptocurrency and Web3 structures to connect and empower them. One could argue the ICP is an Ethereum savior. Indeed, the ICP has positioned itself to become the decentralized Internet of the future, with the goal of creating a new open Internet within ten years. Therefore, the ICP has the potential to create entirely new modes of value.
- Fifth, ICP's blockchain is environmentally friendly, so transacting ICP or NFTs or doing other everyday tasks consumes only about as much electricity as sending an email. This makes the ICP sustainable, with a minimal carbon footprint in contrast to other blockchains and cryptocurrencies. In December 2021, Fortune Magazine reported that each Bitcoin transaction consumed 1,173-kilowatt-hours of electricity, which translates to about $176 in energy costs alone. Carbon emissions from Bitcoin mining and transactions grew by 40 million tons from 2018 to 2020, equal to that of 8.9 million cars; this carbon footprint is roughly comparable to that of whole nations, including Greece! According to Statista, this electricity usage is equivalent to 100,000 VISA transactions. Meanwhile, NFT exchanges built on Ethereum are so costly that some artists have denounced them as an "ecological nightmare pyramid scheme." Due to the intensive processing demands of cryptographic mining operations, transacting an NFT on the Ethereum blockchain produces the same carbon footprint generated in a month by an average resident of the European Union. Blockchains like Ethereum and Bitcoin may be unsustainable long-term without new infrastructure and more efficient transaction processes. In contrast to Ethereum, Bitcoin, and many other blockchains, ICP subnets do not use proof-of-stake or proof-of-work consensus mechanisms that require sprawling digital mining operations to process transactions. Instead, ICP subnets interact via chain key technology. Smart contract transactions are finalized in about 1 second at a total cost of approximately 0.0001 ICP, which works out to about 0.6 USD. Sending or receiving ICP, NFTs, or other data on ICP's blockchain is comparable in electricity usage to sending an email. Moreover, in case of rising ICP prices, transaction costs can be dynamically changed via new proposals on ICP's NNS.
How does ICP work?
As Sunny has explained in detail, canisters are the building blocks of the Internet Computer crypto. They have all the features of traditional smart contracts plus added utility and memory to store software and user data. Canisters can scale up based on application load and can call other canisters and serve hundreds of user requests concurrently.
This gives ICP canisters the unique advantage of achieving thousands of transactions per second, a throughput that blows Ethereum away and presents a practical case for hosting future DeFi applications. Even better, ICP's canister-based software can accomplish the same tasks as traditional software applications that are built on Big Tech platforms like AWS, Google, or Azure. DSCVR.one, a decentralized alternative to Reddit, is a prominent example.
Users can interact with canisters through their preferred Internet browser, directly interacting with ICP's blockchain rather than communicating with various proprietary frontend API.
Canisters are loaded with cycles(gas) for computation. ICP tokens are used to mint new cycles, which are burned by canisters for computation. This burn mechanism acts as a deflationary force on ICP's fiat currency price. Cycles' value will always remain stable irrespective of ICP token price. As many readers may know, one of the most significant disadvantages of Ethereum is its high gas prices.
On ICP's blockchain, stable cycles make canister-based software developers' costs predictable and consistently low. Cycles can be sent to a canister for later use as it performs computations or stores data. Currently, 1 trillion cycles cost one Swiss Franc value of ICP token to purchase. Moreover, software canisters can be written in any programing language that can be compiled to WebAssembly modules (e.g., Motoko, Rust) for deployment on ICP's blockchain.
Better yet, canisters can decouple from their environment and interact with other canisters or users to perform computations and execute smart contract codes. The interoperability of canisters enables the development of a wide range of services on ICP's blockchain. And, since all anonymized transactional and computational data is publicly available for ICP's blockchain, anyone can look at the activity stats of currently deployed canisters using metrics websites like internetcomputer.org or Canlista.
Want to learn more?
Dominic Williams's concise video primer on the IC is an excellent place to start!
Where to buy ICP Token?
Now that we've answered the question, "What is the Internet Computer coin?", we can ask, "Where can you buy the ICP token?" Please refer to Berto Parga's guide to choosing the right crypto currency exchange for you. There are many, many choices available!
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How can you join the Internet Computer crypto revolution?
Joining the exciting new era of Web3 is as easy as creating an Internet Identity. Follow our easy guides on setting things up and getting started with investing and participating in the network nervous system.
You'll be surfing an entirely new Internet in no time!
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- Disclaimer: The views and opinions expressed on this website are solely those of the original author and other contributors. These views and opinions do not necessarily represent those of the Dfinity Community staff and/or any/all contributors to this site.