What is Internet Computer (ICP)
What is the Internet Computer (ICP)?
The Internet Computer blockchain provides the first “World Computer” for building almost any Web2 and Web3 online system or service. Even demanding Web3 social media services can be hosted fully on-chain, without needing a centralized tool like cloud computing. It also enables the hosted smart contracts to create transactions directly on other blockchains. Thus, it provides the complete end-to-end decentralization of online services and Web3.
The Internet Computer makes it possible to build services that run entirely on-chain and assign control of these services to community DAOs (decentralized autonomous organizations). The project aims to transform the entire internet ecosystem.
History of the Internet Computer (ICP)
In 2014, the founder of DFINITY, Dominic Williams, started working on the World Computer concept, a blockchain that can host most of the world’s computation and data. In 2015, he researched techniques that might be used to implement this vision.
In 2016, Dominic Williams received support from a Palo Alto incubator, String Labs, and founded DFINITY Foundation to develop the World Computer. In February 2017, the company raised funds by selling its token, ICP. By October 2017, Dominic Williams was able to demonstrate an initial version of its test network.
The company carried two funding rounds in 2018, raising over $100M. It allowed for speeding up the work on the project and gathering an R&D team of dedicated cryptographers, researchers, and engineers. The Internet Computer blockchain (the first actual realization of a World Computer) was launched on the 10th of May 2021.
How does the Internet Computer (ICP) work, and where is it used?
The Internet Computer runs on a sovereign network of dedicated node machines (special computing devices) built to a predefined standard. The nodes are installed in independent data centers and are maintained and operated by independent “node providers”, ensuring decentralization of the network.
The node machines connect using the Internet Computer Protocol or ICP. The network has a governance system called the Network Nervous System (NNS). The node machines need to continuously operate at a certain standard, as the NNS can slash (eject) node machines that fail to produce enough blocks.
Internally, the Internet Computer network is composed of “subnet blockchains.” Each new subnet adds additional capacity to the network. That enables the network to host more smart contracts, computation, and data. But, the subnets are invisible to the hosted smart contracts and users because they are combined into a single logical blockchain using Chain Key Cryptography.
Chain Key Cryptography enables subnet blockchains and the Internet Computer blockchain as a whole to have public keys. The blockchains cryptographically sign all their interactions, which can be validated using their public keys. Valid signatures show that interactions have not been tampered with. It also signifies that the blockchains are running correctly, without any need to download and check their blocks of transactions.
Due to this technology, the Internet Computer can combine its subnet blockchains into a single blockchain and scale limitlessly. Smart contracts on the Internet Computer can process HTTP requests and serve interactive web experiences directly to end-users due to Chain Key Cryptography.
Chain Key Crypto has also made Chain Key transaction (TX) functionality available to smart contract developers. It enables them to create signed transactions that run on other blockchains. For example, an Internet Computer developer can generate bitcoin addresses and send and receive bitcoin, directly on the Bitcoin ledger, without “bridge” services. Using this functionality, native Bitcoin DeFi can be created.
Internet Computer also provides other features. It includes HTTP outcalls, which enable smart contracts to securely query other systems over the web through its network consensus system. For example, the outcalls make it possible for smart contract software to securely obtain data, such as crypto asset price feeds, without using a trusted oracle service.
The Internet Computer network is controlled and managed by a master subnet (NNS), which runs an advanced permissionless DAO. The NNS instructs the node machines on how to structure the network. Nodes can verify that the instructions received from the NNS are genuine by checking the chain key signature since the public key of the NNS never changes.
The NNS instructs nodes to join and leave subnets and form new subnets. Nodes come and go from subnet blockchains, but their public keys stay the same.
On the Internet Computer, developers build using canister smart contracts. They are called canisters because they are bundles of WebAssembly byte-code and persistent memory pages. The byte-code implements the smart contract’s logic, interacting with other smart contracts using message passing (using a software “actor” model). It makes it possible to run smart contracts in parallel, another way the Internet Computer scales.
Canister smart contracts can be used to build nearly every type of software. For example, multi-block transactions (computations) are possible, along with daemon smart contracts, which are automatically invoked periodically by the Internet Computer protocol.
The main languages used for developing Internet Computer smart contracts are Rust and Motoko. Motoko is a language created by DFINITY specifically for the Internet Computer. In theory, any language that compiles to WebAssembly byte code can be used.
The purpose of the Internet Computer is to add World Computer functionality to the public internet. On the Internet Computer, developers can build decentralized online systems and services entirely on-chain.
The ICP cryptocurrency is the governance token of the Internet Computer, named after Internet Computer Protocol, with three principal utilities:
- ICP can be burned in exchange for Cycles, which developers can load onto their canister smart contracts to power their dapps and services. This mechanism provides a deflationary aspect to tokenomics on the Internet Computer.
- The token can be staked in the permissionless Network Nervous System DAO that governs the Internet Computer, creating voting neurons that generate voting rewards. Voting rewards and node provider rewards are given in newly minted ICP.
- ICP also acts as a store of value. For example, it allows investing in decentralization sales run by Web3 services.
Advantages and disadvantages of the Internet Computer (ICP)
Because the Internet Computer is a blockchain, developers build online systems and services using smart contracts. As smart contracts are tamperproof, systems and services do not have to be protected by firewalls to keep hackers out. It solves the increasing problem of hacks afflicting businesses and society. Another advantage is that Web3 services built on the Internet Computer can process tokens and create new economic rails. For example, Web3 can combine social media and DeFi, to produce SocialFi, such as a social network that is fully tokenized.
The Internet Computer crypto project ensure canister smart contract functionality, which provides:
- interactive web experiences directly served to users by processing HTTP requests;
- creating transactions that directly run on other blockchains using Chain Key TX;
- scaling without limit;
- reducing harmful CO2 emissions.
Web3 developers can build DeFi, SocialFi, GameFi, and metaverse services. Using Chain Key TX (a set of cryptology protocols), they can process tokens on other blockchains without bridges. And they can fully decentralize systems, such as DeFi on Ethereum, by using the Internet Computer to create the interactive web experience in place of traditional centralized IT like cloud computing.
On the Internet Computer, canister smart contracts uniquely pay for their computation using a “reverse gas” model. The developer pre-loads their canister smart contracts with cycles, which are then burned to provide computation whenever a user uses their service. This enables users to enjoy services on the network without first having to set up a wallet, purchasing tokens, and always ensuring they have enough in their wallet to pay the gas fees. This opens up Web3 services to a much larger section of society.
The Internet Computer supports a new blockchain authentication system called Internet Identity. It allows users to use their devices as cryptographic passwords, sign in to online services using the fingerprint sensor on their laptop or Face ID on their phone, and use traditional devices like a Ledger wallet.
Because Web3 services can be built 100% on-chain, they can be placed under the complete control of community DAOs (decentralized autonomous organizations), which perform all configurations and updates. Users can be made owners of online services and part of the team that runs them.
An advanced DAO controls the Internet Computer network (NNS). It updates the replica (or “client”) software that runs on the dedicated node machines that host the blockchain almost weekly.
How to get Internet Computer Protocol (ICP) tokens?
ICP can be easily bought and traded on the WhiteBIT cryptocurrency exchange. You can also get it using a “Quick Exchange” tab in exchange for another asset.
ICP is the governance token of the Internet Computer project, named after the Internet Computer Protocol.
It has three main utilities: