The ICP token is used for governance (holders can vote on the future of the network), to reward network participants for good behavior, and to pay fees for making transactions.
Originally called DFINITY, ICP’s global and distributed network of data centers can run all of the applications that are accessible via traditional Internet standards such as DNS (the domain name system you use via web browsers and smartphones).
How does Internet Computer work?
The Internet today is highly centralized. Popular applications on the web are often closed-source, proprietary, and hosted on a handful of data centers owned by big tech firms. And if one critical data center fails, huge swathes of the web can also shut down with it. Another major concern (particularly for privacy advocates) is that centralized, corporate web-services providers can censor or deplatform applications.
The Internet Computer attempts to offer a fundamental alternative so that developers can build, host, and serve applications in a more decentralized way — allowing websites to be deployed directly onto the public internet. Further, the Internet Computer would incentivize open-source and transparent software development.
As explained in the MIT Technology Review’s profile of the Internet Computer: “Instead of running on a dedicated server in Google Cloud, for example, the software would have no fixed physical address, moving between servers owned by independent data centers around the world.”
One way you can think of ICP is as a way of converting crypto into processing power — the network will establish a fee based on the amount of computing power required by a developer’s project. As long as the fee is paid, the website will run on the public internet.
In theory, any kind of application can be created and run on the Internet Computer — from social networks similar to LinkedIn and TikTok to software similar to all the familiar applications you know today, to new kinds of applications not yet conceived.
Who created Internet Computer?
Dominic Williams is the Founder and Chief Scientist of DFINITY(Internet Computer)
What makes Internet Computer unique?
One of ICP’s objectives was to solve the scaling problems experienced by Ethereum, without compromising on security or decentralization. For example, EOS has previously been criticized for such a compromise.
Network Nervous System (NNS) DAO: The world’s largest permissionless DAO by TVL ($10.3bn), as of January 5, 2022, and participants (536,962 wallets). The NNS DAO is an open, permissionless, and decentralized algorithmic system governing the Internet Computer, which automatically upgrades the protocol based on proposals adopted by the community, and continuously adds new nodes allowing the blockchain network to infinitely scale.
Low On-Chain Data Storage Costs: Decentralized data storage on the Internet Computer costs $0.46 per 1 GB / month or $5 per 1 GB / year. In comparison, it costs $310m (Ethereum) and $800k (Solana), as of January 17, 2022, to store 1 GB per year on legacy blockchains. As a result, legacy blockchains rely on centralized cloud providers such as AWS, Google Cloud, Microsoft Azure, Alibaba Cloud, etc for off-chain data storage. For the first time, the low cost of decentralized data storage via the Internet Computer allows entrepreneurs and developers to run Web3 dapps entirely on-chain.
User-Friendly Web3 Experience: The Internet Computer is the only public blockchain that runs smart contracts that directly serve HTTP calls to users, which means Web3 dapps on the Internet Computer have the same high-quality user-friendly experience of today’s mass-market Web2 apps and games such as TikTok and Fortnite. Most importantly, Web3 dapps on the Internet Computer run on censorship-resistant, sovereign infrastructure. Currently, today’s biggest DeFi and DEXs such as Uniswap, SushiSwap, Aave, Curve, Compound, etc depend on centralized cloud services such as AWS, Cloudflare, and Netlify for their user-facing front ends – the part of a website or service that users see and interact with. For the first time, entrepreneurs and developers can build censorship-resistant DeFi and Web3 dapps that are decentralized from end to end using the Internet Computer — without centralized cloud technology, which can easily be turned off as seen by the deplatforming of social media site Parler in 2021.
Reverse Gas Model: Cycles are the computational resource (aka, gas) required to execute transactions on the Internet Computer. Unlike legacy blockchains, the Internet Computer has a reverse-gas model where developers pay to run Web3 dapps, DeFi, games, NFTs, social media, and metaverse projects. Similar to the success of Web2, the Internet Computer lowers the barrier to mass-market adoption by allowing users to interact with Web3 dapps without needing tokens or token wallets — no longer paying gas fees to mint NFTs, process DeFi transactions, play games, engage in social media dapps, etc.
Anonymity: Users of Internet Computer-based Web3 dapps, DeFi, games, NFTs, social media, and metaverse use Internet Identity, the only anonymizing blockchain authentication system leveraging cryptographically enabled devices such as the fingerprint sensor (TouchID) on a laptop, FaceID system on mobile, or portable HSM devices such as YubiKey or Ledger wallet, to anonymously authenticate to Web3 dapps without being tracked across dapps and services, and preserving a users anonymity. At Genesis launch, DFINITY made node specifications public, which allows node providers to independently procure or build node machines. As a next step, DFINITY and the technical community are developing (see Roadmap) ways for amateur node providers, using low-cost devices, to participate and further decentralize the Internet Computer network.
100% Sovereign Infrastructure: Similar to the Bitcoin network, the Internet Computer is the only other 100% sovereign infrastructure in a blockchain — with zero centralized cloud nodes. Currently, 70% of Ethereum nodes and over 50% of Solana nodes are hosted by centralized cloud providers such as AWS, Google Cloud, Microsoft Azure, Alibaba Cloud, etc, allowing tech giants to shut down or degrade the performance of legacy blockchain networks. Currently, as of January 17, 2022, there are 413 sovereigns, and censorship-resistant Internet Computer nodes operated by independent node providers around the globe, leaving the Internet Computer immune to shut down by centralized parties.
Infinite Scalability: The Internet Computer’s partitioning into subnet blockchains allows the network to infinitely scale. Each subnet (aka, mini blockchain), composed of 13 to 37 nodes to ensure Byzantine fault tolerance, exists within the larger Internet Computer blockchain. Continuously increasing the number of subnets also increases network throughput or overall block rate. As of January 14, 2021, the Internet Computer supports an industry-leading 32 blocks per second.
Lightning Fast Speed: The Internet Computer blockchain is designed to consistently process an immense volume of updates and transactions without compromising on speed, security, sovereignty, or decentralization. Recently, Real Vision CEO Raoul Pal stated, “The Internet Computer is bloody fast”. ICP is capable of processing up to 250,000 queries (read) per second, executed with an average 1-second finality (write) for Web3 dapps — “making it 11 times faster than Solana” according to Origyn co-founder Mike Schwartz.