What is Internet Computer, the Newest Coin in the Top 10?
Internet Computer is a project new to Coinmarketcap that hopes to create the next generation of the internet. Their layer 1 blockchain can handle smart contracts at the speed of the internet at low fees, making it understandable why it immediately became a top 10 coin.
In early May, users of Coinmarketcap were greeted by a surprising new entry into the Top 10: Internet Computer. This coin, which was created by Dfinity, recently had its mainnet genesis launch on May 7, which is a massive milestone for the project. Three days later, Internet Computer’s ICP token began trading on nearly every large exchange, including Coinbase, Binance, and FTX. This type of coordinated listing rarely happens in the cryptocurrency space, so it naturally got investors excited about the prospects of ICP. Let’s dive into the history, use case, and team behind Internet Computer to see if it deserves its lofty market cap of $37 billion.
Internet Computer was created by Dfinity, headed by Dominic Williams, in 2016. They aim to create the next generation of the internet, and they wish to rival centralized competitors such as Amazon’s Amazon Web Services and Google Cloud. This means that anyone would be able to post whatever they want to the internet without the surveillance of Big Data or the possibility of censorship. Their method of bringing the internet to the blockchain also means that there is no need for costly backup procedures, firewalls, and security issues that plague the cloud-based systems we use today.
The current internet uses IP, or internet protocol. This means that there are physical servers, or hosts, where software stays, and data is able to be transferred anywhere in the world. Dfinity has created the ICP, or Internet Computer Protocol, which removes the need for physical hosts and instead allows the entire internet to host and transfer both data and software. This is possible through the decentralization and a network of nodes around the world that store and transfer data.
In our current system, hosts make money through both fees and selling user data to advertisers. One only has to look at Facebook and the Cambridge Analytica scandal for an example of why this is invasive and harmful for consumers. ICP changes this by ensuring that nodes have no control over the data hosted on them, which guarantees that they are unable to sell user data to advertisers. Instead, the nodes are paid in the ICP coin as an incentive to uphold the integrity of the network.
Similar to Ethereum, the ICP token is used to pay for gas fees on the network. The fee is paid based on how many cycles, or CPU power, an application needs to run. Unlike Ethereum, whose gas fees are based directly on the price of Ethereum, the ICP gas fees are pegged to the price of the Swiss Franc, meaning that they should not increase with an increase in ICP price. The coin can also be locked in their Network Nervous System, or NNS, and used for governance features. The NNS gives more voting power to ICP coins that are staked longer, incentivizing users to stake their coins for long periods of time.
The Dfinity team is made up of over 188 people, and some of them have impressive credentials which add to the legitimacy of the project. Some of their notable achievements include creating encryption algorithms, receiving PhDs from Stanford and other prestigious universities, and founding successful cryptocurrency exchanges. The fact that the Dfinity team is large and spread out across the world is a good sign that the project is not a scam and truly intends to build the future of the internet.
Immediately after the coin’s release on exchanges and listing on Coinmarketcap, the token price shot up to nearly $800, before correcting to around $300 and a market capitalization of nearly $40 billion. Even though this project has a lot of future potential, the fact that they have a massive market cap without a true working product makes it a potentially risky buy with not as much upside. The coin, like many others after being listed, may be slightly overhyped, and due for a correction to its true value in the near future. On the other hand, there are lots of cryptocurrencies with no working product and a large market cap, such as Cardano. It is difficult to tell if ICP is overvalued or simply such a groundbreaking idea that it already deserves a market cap almost as high as the automaker Ford.
The Internet Computer is an interesting project attempting to revolutionize a field that is ripe for adoption. They are not a direct competitor to Ethereum or any other smart contract platforms, and have carved out their own niche in the cryptocurrency space. Their extensive 20-year roadmap states that they plan to eclipse Big Tech within the next 20 years. Only time will tell if the ICP will replace the internet we know today, but if the 188 team members are to be believed, this flippening is inevitable.
By Lincoln Murr
