UNDERSTANDING INTERNET COMPUTER PROTOCOL
What is the Internet Computer Protocol?
The fast-rising token — ICP burgeoned and caught the eyes of the crypto community when several million dollars from high calibre investors such as Silicon Valley venture capital firm Andreessen Horowitz, Polychain Capital, Amino Capital, and several more were said to have flown into the project.
But you must have wondered what the buzz about ICP is. While Bitcoin was created to be digital money, Ethereum gained prominence as the hub of smart contracts, and other thousands of cryptocurrencies have offered numerous solutions, ICP offers something unique.
ICP is an environment where software can be built and contents can be published. So if you’re thinking about creating a website, an app, or any other web service, all these can be done on the Internet Computer protocol.
ICP is a recreation of the web in a more decentralized form. It scales smart contract computation and data, runs them at web speed, processes and stores data efficiently, and provides powerful software frameworks to developers.
This cryptocurrency was created by Dfinity, a Switzerland-based non-profit organization founded by Dominic Williams with offices in Palo Alto, San Francisco, and Zurich. The project started in October 2016, and 5 years later, on May 10th, the Internet Computer Protocol was launched.
The Network Nervous System (NNS), Neurons, and ICP Utility Tokens
Look, I know Nervous systems and Neurons sound a little like Biology, but I can explain. The NNS is a decentralized tokenized governance system that is completely open for anyone to submit proposals that can either be adopted or rejected. It runs within the Internet Computer’s protocols where the consensus mechanism is the staking of ICP governance tokens. When ICP tokens are staked, voting neurons are created.
According to Dfinity, Neurons allow users to “time-lock” their ICP utility tokens to be rewarded with voting power, which can be used to vote on proposals submitted to the system that can be automatically executed. The voting power and voting rewards in this system are proportional to
the quantity of ICP that a user stakes, the length of the notice of withdrawal of their token, and their age.
Neuron holders (nodes who have staked their tokens) are placed in a crypto-economic game, where they adopt and reject proposals and receive incentives in return, or vote automatically in a way that improves the network in the long run.
This whole network is powered by independent data centres that allow the software to run anywhere on the internet rather than on servers that are controlled by Amazon, Google, or Microsoft.
How Does the Internet Computer Compare With Ethereum?
A lot of what has been discussed about this project may seem like what Ethereum already does, however, here are some of the differences between Ethereum and the Internet Computer.
- While Ethereum provides the technology for decentralized applications (DApps) and uses ERC-20 token Ether as its digital asset representation, the Internet Computer seeks to replace the traditional internet by assigning special identification to data centres and passing on governance to the end-users.
- Ethereum uses smart contracts to create self-executing agreements and actions, while The Internet Computer uses software canisters; quite similar to smart contracts, but have been constructed to have more flexibility and higher scalability.
- While Ethereum currently has relatively high transaction fees and transaction confirmation speed is slow because of network congestion, the Internet Computer’s enormous throughput guarantees it can consummate transactions in 5–10 seconds, with unlimited scalability because of its threshold relays.
- Ethereum’s specially developed programming language is Solidity, while Internet Computer’s programming language is Motoko.
- Despite these differences, the roll-out of Ethereum2.0 means that these comparisons would change remarkably.
Why is the Internet Computer project attractive? Some of the selling points of the Internet Computer are:
Chain Key Technology: The Chain Key Technology allows the Internet Computer to have a single public key. This is a massive advantage as it permits any device, including smartwatches and mobile phones, to substantiate the authenticity of artefacts from the Internet Computer.
Top Investors: Venture capital firm Andreesen Horowitz is one of the big names in investing, while Polychain Capital, another investor in ICP, has a reputation as venture capital for crypto. This has attracted several other investors to the ICP project and the expectation is that there will be more money flowing into the project.
Anyone can create software on the internet: The technology allows the use of its blockchain technology to create apps and software that run anywhere on the internet rather than on servers that are controlled by big techs.
Speed and Scalability: while it takes around 10–30 minutes to complete transactions on some cryptocurrencies such as Bitcoin, it takes only 5–10 seconds to consummate ICP transactions.
How to buy ICP tokens
Cryptocurrency exchanges where one can buy and sell ICP include Binance, Coinbase Pro, Huobi Global, Kucoin, among several others.
After gathering relevant information about how the cryptocurrency Exchange of your choice works, one can simply go to their official websites or download mobile apps, create accounts and buy and sell ICP or any other virtual currency.
Please note that none of the information provided above is financial advice. The crypto market is a nascent market with inherent risks; it is, therefore, important to do your research before investing in any project.