What Is the Internet Computer Protocol (ICP)?
The Internet Computer, which gained popularity in May 2021 and quickly became one of the top cryptocurrencies by market cap, is not actually a computer, but a cryptocurrency. Despite suffering significant losses in value during the 2022 bear market, it remains one of the largest tokens in the crypto ecosystem. What sets the Internet Computer apart from other cryptocurrencies is its unique utility, as there are few tokens that offer similar functionality. This may explain its rapid ascent to popularity and widespread adoption.
What Is the Internet Computer?
ICP sets itself apart from other crypto-assets like Bitcoin and Ethereum because it is not just a currency. While ICP can be traded on exchanges like Coinbase, its ultimate goal is much more significant. It is a digital token that users can use to create websites, apps, and other web-based services. The ICP was created by the Dfinity Foundation, a nonprofit organization focused on building the Internet Computer. The foundation raised $102 million in a crypto token sale in 2018, and Dominic Williams, the brain behind Dfinity, started working on the Internet Computer project in 2016.
The ICP lives on a unique blockchain that allows users to deploy safe canisters, which are improved smart contracts. This blockchain is hosted on node machines operated by independent entities worldwide, and it is run through a cryptographic fault-tolerant protocol that ensures the chain cannot be broken or hacked. It is also composed of individual subnet chains that run in parallel and communicate with each other through chain key cryptography.
The chain is controlled by a permissionless governance system called the Network Nervous System (NNS). The NNS is the mechanism that makes decisions on updating node machines, configuring parameters, and creating new subnet blockchains. The NNS is open, which means that anyone can submit proposals or vote on new updates, but users who want to interact with the NNS must stake ICP tokens and create a neuron with the NNS first.
In summary, ICP is a set of frameworks that connect independent data centers and allow them to offer decentralized services to web users. It aims to be the crypto industry’s alternative to the centralized cloud-based services currently in use. The data centers are of top quality and can run every application currently accessible through the internet. The ICP is essentially Web 3.0’s AWS (Amazon Web Services). Although the 2022 bear market has wiped off much of its value, ICP is still one of the largest tokens in the crypto ecosystem, and there aren’t many tokens that offer the same utility.
What is the mechanism behind the functioning of the Internet Computer Protocol?
The primary issue the Internet Computer Protocol (ICP) tackles is the centralization of internet infrastructure, which presents two significant problems. The first problem is the potential vulnerability of centralized data to attacks, which could compromise the entire application. The second challenge is that centralized servers can create opportunities for censorship, including de-platforming applications and individuals.
The ICP provides a solution to these problems through the implementation of a decentralized system, enabling data to move across independently owned data services worldwide, rather than being confined to centralized servers like those in Amazon Web Services.
Essentially, the ICP introduces a new framework that enables users to host their servers in a decentralized manner.
Advantages of the ICP
The ICP Devs claim that the blockchain-based decentralized computer network offers several advantages over centralized cloud-based alternatives. One of these advantages is that the network has open standards and is free from conflicts of interest that can arise with cloud-based web services.
In contrast, cloud-based services may have to negotiate conflicts of interest when they host services that compete with their business. For instance, companies competing with Amazon may be reluctant to host their businesses on AWS, which could come at a high cost if AWS provides the best web services. The Internet Computer Protocol solves these problems without any conflicts of interest.
The protocol provides three essential services. Firstly, it offers a globally accessible blockchain that runs smart contracts and can also provide interactive web data to users. Secondly, it offers a network of blockchains that are connected through chain key cryptography. Finally, the protocol is independent, ensuring that smart contracts are always executed.
Limitations of the Internet Computer Protocol
The ICP’s impressive features may seem too good to be true, and for good reason. Unlike the simplicity of buying a server with a few clicks, using a server on the ICP requires heavy-duty computers, which goes against the decentralized ethos that aims for more inclusivity. This means that only prominent institutional players may benefit from the ICP.
Another challenge with the ICP is preventing abuse. In centralized cloud services like Amazon and Google, moderation is taken seriously, but with the ICP, there are no barriers to what can be hosted. However, the ICP is a governance token that allows community members to stake their tokens and self-regulate their community, which offers a solution to this problem.