With the recent turmoil in the crypto markets, the bountiful crypto future we’ve all been dreaming of has become blurred by the pain of our current losses. Emotions are running high right now and many people are looking for someone to blame, but those of us who have been through these kinds of dips before know that this is when patience will pay off the most.
I’ve paid an average price of ~$115 for the ICP in my portfolio. I initially bought above $300 and have consistently added to my position as the price has dropped. Even though I’m obviously in the red with my ICP investment, I’ve still been confidently adding to my neuron with an 8 year dissolve delay as recently as last week with no intention of slowing down. My goal in this post is to explain why I remain bullish on this project despite the significant price drop and all of the surrounding FUD.
Why is the ICP price so low now?
- Most people don't understand this project yet (which is understandable since the educational material is still severely lacking and is currently being built-up)
- The wider crypto trading community had their feathers ruffled when ICP shot up to be within the top 10 tokens on the first day. It also came out at a time when countless trash projects were making similar-sounding claims, so ICP got unfairly grouped in and labeled a third rate project by most people who had never heard of it.
- People who don't understand the complexity of the Internet Computer are suspicious of the centralized organization that built it (Dfinity Foundation). Considering the nature of what it is, it needed to be built all at once and isn't the type of technology that could be easily crowdsourced (though it is open-sourced now).
- Early investors are still dumping to lock in their gains since the current crypto market is so uncertain and volatile.
- With general crypto speculation and enthusiasm at a recent low, there’s almost nothing driving demand for ICP right now other than the dedicated support of a few thousand nerds who "get it".
Why does this not matter?
People don't "get" the Internet Computer right now just like most people didn't "get" the hype around the internet a few decades ago. At the end of the day, that doesn't matter because they'll eventually end up using it and getting value from it without having to know how it all works. As early adopters, we just have a head start because we took the time to learn about it ahead of the crowd.
What about the Dfinity Foundation team?
There are two things that are at a severe shortage when it comes to the teams which run most crypto projects:
- The ability to publish code that actually works.
- The ability to focus on what adds value and what they are good at.
Sure, the Dfinity team has made some mistakes and certainly isn’t perfect, but they’ve also published a smart contract platform that does things most people thought were impossible. They aren’t the best marketers, they can’t control the price swings in the market, and they haven’t had the smoothest transition out of the research phase, but they are ignoring FUD and staying focused on finishing the Genesis launch and building tangible features which will add value to the Internet Computer.
For example, a few rude comments on Reddit have been going unanswered, but I just spoke with a node provider yesterday who said they were getting excellent support from the Dfinity team. If you ask me, I think this is an example most crypto projects could learn from: Shut up, build something useful, and don’t get paralyzed by FUD!
The dapps made with the internet computer will be able to:
- Give people an enhanced user experience for login (no more Metamask, usernames, or passwords).
- Deliver advanced capabilities to launch things like CanCan, while still running on smart contracts!
- Provide seamless integration with both Bitcoin and Ethereum (and probably more to come).
- Have smart contract transactions funded by dapp providers or DAOs, instead of stopping the user and charging them each time.
What will drive ICP Demand
The Internet Computer is the first project that gives developers the ability to directly target average consumers with an experience that’s seamless from the rest of the internet, instead of being limited to crypto-savvy users. Developer teams are building the first wave of unicorn apps on the Internet Computer right now (this post was originally published on one of them). Once a handful of these projects start to gain traction, the value of ICP will achieve huge gains!
Like ETH, the ICP token is needed for gas. Unlike ETH, increases in token's value won't increase gas costs and slow down activity on the platform. When developers or users buy cycles at a fixed price to run their dapps, ICP is purchased in the background and burned when those cycles are used. This means the demand for ICP is utility-driven and separated from the price, unlike most tokens which are purely speculation-driven.
The deflationary pressure on ICP is basically nothing right now (it's still in the middle of launching and there are few dapps most people can use). It’s easy to forget how early this project is, the Internet Computer doesn't even have pretty domains yet. There are a lot of basic features which haven't been turned on yet and more subnets to be added.
ICP price in the future
Imagine a world a few years in the future where CanCan overtakes TikTok. DSCVR has over 4,500 active daily users, and there are a handful of several other large decentralized applications running on ICP. The deflationary pressure and speculative demand would have increased exponentially while the inflation rate will be capped at just 5%. With 80-90% of ICP locked in neurons, and the rest being bought at any price and burned to fuel the usage of popular dapps, ICP's price could easily exceed bitcoin's!
Bitcoin's price is based on it being a "store-of-value". In a post-crypto-revolution world each bitcoin may be worth a few million dollars (if dollars still exist) but then what? Like gold, it'll eventually start going down in value because its demand is driven by how much buyers think they'll be able to sell it for in the future. By contrast, in a post-crypto-revolution world, a large chunk of the world's computation will be running on smart contract platforms like the Internet Computer (of which the IC will likely have a large share, if not the largest). That means ICP's deflationary pressures will probably stabilize well above the 5% inflation rate, causing the price to continue to increase and eventually exceed Bitcoin's.
Why do I think the "post-crypto-revolution world" will be reached within 5 years? Well, at the pace crypto innovation is advancing that should be plenty of time, and every day it looks more and more like the traditional financial system probably can't survive another 5 years.
Disclaimer: The author owns ICP, and this is not financial advice. Please do your own research.
- 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 Dfiinty Community staff and/or any/all contributors to this site.*