The Net’s Next Level: What Is Internet Computer in Cryptocurrency?

Crypto developers have always had high ambitions for their protocols, from Bitcoin (BTC) becoming a globally accepted currency to Ethereum’s (ETH) vision of a distributed supercomputer. Of all these lofty promises in the crypto market, however, Internet Computer (ICP) may have the most far-reaching vision for blockchain technology. Instead of settling to build new programs on the web’s application layer, ICP developers want to redesign the entire internet with their decentralized tech stack. 

As impossible as it may seem, Internet Computer continues to pursue its mission of altering the core infrastructure of the online experience to achieve its goal of overthrowing Big Tech’s cloud servers. 

Internet Computer’s history

Entrepreneur and crypto enthusiast Dominic Williams introduced the concept of the Internet Computer (initially the “DFINITY project”) in 2015. In 2016, Williams founded the nonprofit DFINITY Foundation to lead funding and development on the blockchain, and hundreds of cryptographers, engineers, and academics joined the team. The DFINITY Foundation released its first testnet for the Internet Computer’s basic functions in 2017 and published the first white paper detailing the project’s consensus algorithm one year later. 

Between 2016 and 2018, DFINITY Foundation led multiple funding rounds and an initial coin offering (ICO) for Internet Computer’s ICP cryptocurrency, bringing in roughly $195 million from traders and venture capital firms. 

After years of fundraising, researching, and testing, Internet Computer formally launched its blockchain in a 2021 “Genesis Event,” opening the door to third-party developers interested in building on top of the ICP protocol. The project also released the code for a decentralized application (dApp) called “CanCan,” which mimicked video-sharing app TikTok, highlighting Internet Computer’s versatility.

How does Internet Computer work?

Internet Computer has an elaborate architecture composed of multiple data centers spread worldwide, each hosting multiple blockchain nodes. These data centers—built with DFINITY’s approved hardware—act as the “servers” for the Internet Computer blockchain. However, unlike centralized cloud providers, no single data center serves as a data storage and processing hub, making ICP’s infrastructure distributed and independent from traditional IT.

Nodes from each Internet Computer data center are further subdivided into “subnets” that process transactions using a novel Proof-of-Stake (PoS) validation system called threshold relay. In this system, nodes lock (or “stake”) ICP coins onchain to get a chance to submit batches of transaction blocks to the distributed ledger and receive crypto rewards. 

Besides validating transactions, subnets also host dApps created by third-party developers on top of Internet Computer. dApps on Internet Computer run using precoded instructions from automated commands called “canisters.” While similar to self-executing smart contracts on blockchains like Ethereum, canisters have extra functionalities such as splitting or creating duplicate versions of themselves on other Subnets to welcome more users. The use of canisters helps Internet Computer function at web speed and with low network fees (aka gas fees). 

The Network Nervous System (NNS) serves as the “brain” behind Internet Computer’s operations and the hub for decentralized governance through a decentralized autonomous organization (DAO). Anyone holding ICP can vote on future updates to the Internet Computer via the NNS, which decides which data centers to allow on its blockchain and monitors nodes for misbehavior. Subnets also leverage a process called “Chain-Key Cryptography,” which allows them to communicate data between each other through the NNS.

Internet Computer FAQs

What is the ICP cryptocurrency?

ICP is the native cryptocurrency on the Internet Computer blockchain. It plays a role in securing the network through staking and incentivizing node operators in subnets with rewards. ICP is also used to pay gas fees when interacting with dApps and for onchain governance through the NNS’s DAO. 

The Internet Computer price is tracked on crypto exchanges or price aggregator websites using a real-time Internet Computer price chart. Since ICP is a fungible cryptocurrency, the price per Internet Computer coin has a 1:1 ratio in the crypto market. 

What’s the purpose of the Internet Computer Network? 

Internet Computer’s purported goal is to replace the IT infrastructure underpinning the current version of the web with a decentralized community of data centers. Using blockchain and distributed ledgers as the foundation for Internet Computer, the project hopes to create an online experience free from the counterparty risks inherent in cloud servers controlled by Big Tech corporations. 

What is internet identity on the Internet Computer? 

To use Internet Computer, users must create a decentralized identity using biometrics like fingerprints or face IDs instead of creating usernames and passwords. When users create these sign-in credentials, the Internet Computer generates cryptographic keys and links the private keys to a user’s mobile device or computer for privacy and security.   

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