If you regularly keep tabs on the crypto world, chances are that you noticed the debut of a new token called Internet Computer with the ticker ICP on Coinmarketcap in May.
ICP traded as high as $460 on May 10 and peaked above $580 the following day before embarking on a downward spiral which has seen the price drop to its current price at $80. Most crypto traders are probably thinking that the discounted price is a good thing because it provides a much better entry point.
The ICP chart indicates that the token has been rapidly losing value, almost as if it is a project that was created to enrich the early adopters and its creators. However, further investigation into the project reveals some interesting things, such as a plan to replace the internet or at least build an entirely new type of internet from the ground up.
The Internet Computer had its origins under the name Dfinity before it was changed to its current name. It is currently run by a Swiss non-profit organization that also goes by the name Dfinity which has more than 200 of the most talented developers in the world. While most of the ongoing crypto projects aim to replace the application layer, Internet Computer aims to take over the whole stack.
The Internet Computer features data centers that are spread across the world which will host subnets to support the entire network. It will also have features similar to smart contracts but more powerful, known as canisters which can create extra versions of themselves on other subnets to support user growth, thus facilitating scalability. Canisters can also be used to build Dapps and they facilitate speeds similar to those of the regular internet.
Users on the Internet Computer will not have to pay for anything on the network unless it is something like a decentralized exchange or lending protocol that requires transaction fees. This is where the Internet Computer becomes more attractive than many other projects that are trying to build the decentralized internet. However, there are some features that many people might find concerning about the Internet Computer. Users need an internet identity to use the Internet Computer.
The ICP token is used to provide network rewards to voters who participate in governance, to pay for the canister fees necessary for running websites and applications on the Internet Computers, and also to pay for the data centers that offer their computational capacity to the network. This means that ICP might become more valuable over time especially with the launch of more websites and apps. Note that the supply is limited at just over 124 million ICP and has a current market cap of more than $10 billion.
Ultimately, the demand for ICP will thus depend on whether the Internet Computer will be attractive enough to attract a lot of developers who will want to launch websites or apps on the platform. If it manages to overthrow the traditional internet, that could potentially mean millions of developers coming on board, in which case the demand for ICP would skyrocket. Given its low supply, the value would likely go up exponentially.
There have been some concerns such as the need to have an internet identity that will centralize power and pave way for censorship and too much control. The same problems have fueled the development of decentralized platforms. The Dfinity organization’s governance might be swayed to implement rules that might not be in the interest of the masses. The fact that it has been in partnership with the World Economic Forum and that its code is not open-source raises some flags about the platform.
In a way, the internet Computer appears to be delivering a more convenient internet experience but the concern is that it is not as decentralized as it claims and the consolidation of control is a major concern. These factors should be considered before deciding whether or not to purchase ICP.
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