What is behind the hype about Internet Computers (ICP)?

Revolutionizing the Internet is an ambitious undertaking. But that’s exactly what DFINITY has been working on since 2016. Promising or suicide mission? We took a close look at the Internet Computer (ICP).

If the largest crypto exchange in the USA adds a new coin to its program from one day to the next, one can assume that this will not remain without consequences for the price. A prime example of the exchange effect is provided by a new blockchain protocol that is preparing to reform the Internet. We are talking about the Internet Computer (ICP). The native ICP token of the project launched on May 7th has been tradable on Coinbase since May 10th and breaks records in the first few days of trading.

After the quarrels that are common with new listings like this, the ICP rate leveled off at around $ 412 on May 11th. However, the market capitalization is particularly impressive. At a market value of US $ 412, ICP has a market capitalization of US $ 51 billion. That is roughly the value that Bitcoin (BTC) reached in the summer of 2017 – after more than eight years of its existence. With a market capitalization of over $ 50 billion, ICP is comparable to mid-sized companies in the S&P 500 stock index. One wonders: Can such an assessment be justified?

What is the internet computer?

In order to understand how the Internet computer wants to revolutionize the Internet, one must first have a rudimentary knowledge of how it works. The Internet is currently a conglomerate of technically standardized protocols such as the Internet Protocol (TCP / IP). These protocols are responsible for forwarding data packets and thus ensuring the connection between the various Internet users. Similar to crypto-protocols, the internet also has different layers.

In order to provide Internet services, one must build applications that are compatible with these protocols. According to DFINITY founder Dominic Williams, however, there are major hurdles for developers on the Internet, as a significant part of the base layers is under the control of monopolists such as Amazon. Many applications can only be implemented with the help of big tech companies. That wants DFINITY to change.

“The Internet computer is a whole new set of IT fundamentals. We want to become the market leader in Internet applications, ”says Williams.

On the surface, DFINITY offers a software foundation similar to that of the Internet. The basis, however, are protocols that are executed by distributed data centers. In contrast to the Internet, the Internet computer not only forms a protocol basis, but can also provide computing capacity.

DFINITY expects this to significantly lower the entry thresholds for the development of Internet applications.

The Internet Computer addresses the issue of monopoly formation on the Internet. We are introducing a new software called “autonomous software” and making it possible to build new Internet services. In doing so, we are eliminating what is probably the greatest risk for tech entrepreneurs at the moment: platform risk.

What is the purpose of ICP tokens?

ICP tokens are similar to classic proof-of-stake tokens. Users can lure ICPs with a smart contract, for example, and thus participate in network governance and receive rewards. In addition, the tokens can be converted into so-called cycles, which in turn serve as “fuel” for decentralized applications on the protocol. In essence, ICP is a kind of utility token that can be used on the platform. During the genesis of the project, DFINITY issued 469,213,710 ICP tokens, of which – how could it be otherwise – a significant proportion of 41 percent remained within the DFINITY Foundation.

It was only on May 7th that the company launched the Internet computer with media coverage. Now DIFINITY has to show that it is doing justice to its grandiose plans. Meanwhile, the value of the native token is likely to be one thing above all else: hype.