What is Internet Computer (ICP)?

internet computer

The Internet Computer Protocol is a blockchain network that aims to improve efficiency, speed, and decentralization in computation and data storage. It seeks to address problems with the traditional Internet, such as service monopolization, inadequate security, and the wide problem of personal data abuse.

Internet Computer enables independent data centers worldwide to join forces and provide a decentralized alternative to the current centralized internet cloud providers.

Key Takeaways

  • The Internet Computer is a decentralized platform that offers a fast, secure, and scalable alternative to centralized cloud computing.
  • Internet Computer works by allowing independent data centers to operate directly on a native blockchain network.
  • The network’s native utility token, ICP, governs the network, compensates nodes that perform computations, and rewards participants for their involvement in the ecosystem.

The Internet Computer blockchain enables true decentralization by allowing developers to create online services without relying on centralized, insecure, and often unreliable traditional information technology (IT) such as cloud computing services, databases, and web servers. This eliminates the need for censorship and the risk of unreliable services.

How does Internet Computer work?

The Internet Computer blockchain operates on a sovereign network of specialized “node machines,” similar to how the internet runs on dedicated network routers. These node machines are standardized hardware operated by independent node providers around the globe using self-governing data centers.

The nodes connect to each other via the internet using the Internet Computer Protocol (ICP) and form the Internet Computer blockchain, functioning as a public “World Computer.”

Chain Key Cryptography

ICP utilizes a novel cryptography framework called “chain key cryptography,” which enables blockchains to generate public “chain keys” and sign messages using distributed private key material. This method of authentication allows connected devices to verify the authenticity of artifacts from the Internet Computer blockchain using a single public key rather than requiring large amounts of data as traditional blockchains do.

Subnet Blockchains

The Internet Computer comprises multiple “subnet blockchains,” which are independent blockchains on the network that can interconnect to increase their capacity. These subnets are transparent to smart contracts and merge to form a single, limitless blockchain, similar to how subnets extend the internet but are invisible to applications using it.

Subnet blockchains employ a novel consensus system and cryptographic framework that allows applications to interact with them securely without the need for a local node. Applications can verify the chain key signature on messages exchanged during interactions to ensure the authenticity of the message and the proper functioning of the subnet blockchain.

Network Nervous System DAO

Internet Computer’s network is managed by a master subnet blockchain that runs an advanced decentralized autonomous organization (DAO) called the Network Nervous System (NNS). This DAO directs nodes on how to structure the network, and nodes can verify the authenticity of these instructions by checking the valid chain key signature.

The NNS instructs the nodes to combine to create subnet blockchains, and the cryptography allows nodes to be added or removed from subnets at any time without altering their own chain keys.

Subnet blockchains can exchange messages directly and do not require any copies of each other’s state to validate them, allowing the network to simply add new subnets to increase its capacity. An application only needs to be aware of the chain key of the NNS subnet to interact with any point in the network, as the NNS signs the chain keys used by the subnets, and the subnets provide proof that their chain keys have been signed by the NNS.

Canister Smart Contracts

When interactive web content is running in a browser, it verifies the chain key signatures on content and responses served by “canister” smart contracts hosted on the Internet Computer.

Canister smart contracts are software “actors” that consist of WebAssembly bytecode and persistent memory pages that they execute within, enabling multiple smart contracts to run deterministically in parallel on a single subnet.

Bitcoin Support

Canister smart contracts are highly versatile and can be used to build a wide range of applications. For example, they can support multi-block transactions (computations) and daemon smart contracts that are automatically triggered by the blockchain on a periodic basis.

Recently, the chain key cryptography framework of the protocol has been expanded to allow smart contracts to manage accounts and sign transactions on other blockchains. This means that Internet Computer smart contracts can create bitcoin addresses, send and receive bitcoin, and build native decentralized finance (DeFi) systems for the Bitcoin network.

Internet Computer Development

The DFINITY project was created in October 2016 by Dominic Williams. It received funding from various investors, including Andreessen Horowitz, Polychain Capital, SV Angel, Aspect Ventures, Electric Capital, ZeroEx, Scalar Capital, and Multicoin Capital, totaling $121 million. In 2018, the DFINITY Foundation conducted an airdrop of ICP tokens to over 50,000 registered participants.

On December 18, 2020, the alpha mainnet of the Internet Computer was launched by the DFINITY team. The Internet Computer was then made available to the general public on May 10, 2021, with the release of its source code and the activation of ICP utility token’s transaction and governance features.

Internet Computer FAQ

Who created Internet Computer (ICP)?

The Internet Computer was developed by the DFINITY Foundation, which was founded by developer Dominic Williams in 2016. The DFINITY Foundation is a non-profit organization dedicated to researching and building Internet Computer.

After years of research, the project officially launched in May 2021. The foundation’s work is supported by researchers from around the globe, including cryptographers with approximately 100,000 academic citations and 200 patents.

What is the ICP token used for?

The ICP token serves three main purposes.

  1. ICP can be converted into “cycles” that are used to power computation on the Internet Computer, with the conversion process resulting in deflationary pressure as the ICP is consumed.
  2. ICP can be staked in the permissionless Network Nervous System DAO, which governs the Internet Computer blockchain, to create voting neurons that generate rewards.
  3. ICP can be used as a store of value, for example, by allowing users to invest in decentralization sales offered by web3 services.

How do I buy Internet Computer (ICP)?

Here is a step-by-step guide on how to buy Internet Computer (ICP):

  1. First, you will need to find a cryptocurrency exchange that supports ICP and create an account. Some popular exchanges that offer ICP include Binance, Coinbase, and Kraken.
  2. Once your account is set up, you will need to link a payment method, such as a bank account or credit card, to your account. This will allow you to purchase any of the supported cryptocurrencies, which you can then trade Internet Computer (ICP) tokens with.
  3. Navigate to the exchange’s ICP trading pair, and place an order to buy ICP using the cryptocurrency you have bought/deposited. Ideally, you want to set the desired buy price at the current trading Internet Computer price. ICP price is determined by market cap and circulating supply.
  4. Wait for your order to be filled and your ICP to be credited to your exchange wallet. The same applies if you want to sell Internet Computer (ICP) tokens.

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