Despite turbulence in the broader crypto community, the Internet Computer has enjoyed remarkable growth over the past few months.
Despite turbulence in the broader crypto community, the Internet Computer has enjoyed remarkable growth over the past few months. To help people better understand this growth, Kyle Langham recently published a piece on DFINITY's Medium about two metrics that are used to evaluate the Internet Computer ecosystem.
The Internet Computer Outperforms Expectations
For those of you who are new, welcome! The first thing you need to know is that the Internet Computer is unlike any other blockchain. Rather than relying on proprietary API and commercial cloud services, the Internet Computer achieves what's called "blockchain singularity" by hosting fully on-chain decentralized applications that run at speeds comparable to Web2.
Since its launch in May 2021, the Internet Computer ecosystem has blossomed into a diverse offering of platforms for DeFi, SocialFI, Gaming, NFTs, and Metaverse tools, all of which attract thousands of new active users every week. And lately, the Internet Computer has outperformed expectations in terms of ecosystem growth.
Ecosystem Growth Performance Metrics
Unlike other blockchains, the Internet Computer uses a reverse gas model similar to Web2 whereby creators and developers pay for processing and data storage rather than users. An exchange unit somewhat similar to a traditional stable coin cryptocurrency, known as a cycle, serves as the unit of payment for reverse gas fees. New cycles are created by burning ICP tokens, and cycles in turn are destroyed when they are used to pay for running applications. Therefore, cycle burn rate is an excellent way to measure the Internet Computer ecosystem's growth, because it measures the number and use of applications.
The month of November 2022 was unprecedented. The Internet Computer saw 14.9K trillion cycles burned, up from 9.4K trillion in October. Overall, there's been greater than a 700% increase in cycles burned since the beginning of the year.
2. Growth in Users
For most blockchains, counting the number of users can be a challenge. Fortunately, for the Internet Computer, Internet Identity anchors offer a close proxy measure. As a reminder, each anchor is an instance of an Internet Identity, which is in turn associated with a unique user. While it is true that a user can have multiple anchors for their Internet Identity, anchors are physical items so practical considerations limit their proliferation.
During November 2022, an unprecedented 36K new Internet Identity anchors were created. That means November may have seen three times as many new Internet Computer users join the ecosystem as in October. Moreover, it's really interesting to note that during the month, there was a sharp increase in new registered anchors right around the time FTX started to unravel.
While correlation does not imply causation, it would not be unreasonable to suspect that the spreading failure of centralized cryptocurrency exchanges and increasing scrutiny of crypto in general has prompted some people to take a second look at the Internet Computer.
After all, the Internet Computer is already a fully functional and global blockchain alternative to the for-profit ecosystems of Web2. Moreover, it doesn't only propose interesting ideas but also delivers on its promises.
What are you waiting for? Join the fastest growing Web3 ecosystem!
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