Finance

Internet Computer (ICP): What Is It And How Does It Work?

Internet Computer (ICP): What Is It And How Does It Work?

Internet Computer (ICP) is a type of cryptocurrency which can be used to create apps and websites (among other things). In this post, we will find out more about it.

Internet Computer (ICP): All You Need To Know

What is the concept behind ICP?

One way to network, which is the foundation of cryptocurrency, is that it can only be used in an even more decentralized way. ICP can be thought of as a decentralized computer network that can run a new or different version of applications on the web. For this reason, the founder of the project says that it has the capacity to challenge internet platforms such as Google, Facebook and Amazon Web Services. There are decentralized finance applications mostly called DeFi (Decentralized Finance) in the market. DeFi applications can use cryptocurrency to copy (or modify) general financial processes.

He says that given Dfinity’s highly decentralized network, Internet Computer can scale its capacity with increases in demand. Therefore, it would be more helpful to think of the Internet Computer not as a cryptocurrency (in the typical currency sense) but as a network that uses blockchain technology to power applications.

What is the unique thing about Internet Computer (ICP)?

Internet Computer (ICP) is known as the world’s first blockchain working at web speed with unlimited capacity. It also represents the third largest blockchain innovation alongside Bitcoin and Ethereum, a blockchain network that scales smart contract computing and data, runs them at web speed, processes and stores data efficiently, and provides powerful software frameworks to developers. By making this possible, Internet Computer ensures that software is completely rethought and presented, in other words, it provides a revolutionary new way to create tokenized internet services, pan-industry platforms, decentralized financial systems, and even traditional corporate systems and websites for crypto trading like bitcoin billionair.

Internet Computer’s aim is to expand the public internet and by this to become the world’s computing platform. Today, the internet is a network that connects individuals and information, but currently systems and services are run from private infrastructure. Scientific breakthrough behind Internet Computer, new Consensus, Non-Interactive Distributed Key Generation, Neural Network System, Internet Identity etc. It is blockchain technology, which encompasses dozens of advanced technologies such as Blockchain technology consists of a set of cryptographic protocols that regulate the nodes that make up the Internet Computer. It is also one of the fundamental breakthroughs behind Internet Computer, allowing it to have a single public key. This is a huge advantage because it can enable any device, including smart watches and mobile phones, to verify the authenticity of products from the Internet Computer. However, this is not possible for traditional blockchains.

Blockchain technology is the engine that runs the Internet Computer and makes it possible to work. It allows adding new nodes to the network to scale infinitely and create new subnets, ie constantly replacing failed or crashed nodes with new ones; It enables the network to fix bugs and add new features by refreshing subnets and seamlessly updating the Internet Computer protocol even if too many nodes fail in it.

The DFINITY R&D team invented the new Non-Interactive Key Resharing Protocol (Non-Interactive Key Resharing Protocol). This means that each of the old signers is only required to broadcast a single message to the new signers. To ensure this is done securely, many concepts are used, from forward secrecy encryption and non-interactive (including zero-knowledge proofs) advanced encryption. 

The key is ideal for an asynchronous environment and its benefits include key protection. The lifetime of a subnet is known by a single public key, and other parties in the Internet Computer do not need to keep track of changing public keys. Since the way the Key Resharing Protocol works is not interactive, It is ideal for an asynchronous environment and has benefits such as switch protection. A subnet is known by only one public key for its lifetime, so that other parties in the Internet Computer do not need to keep track of variable public keys.

Who founded Internet Computer?

The Internet Computer (ICP) project was founded by Dominic Williams in October 2016 and has received considerable attention from the crypto community. DFINITY has raised a total of $121 million from contributors including Andreessen Horowitz, Polychain Capital, SV Angel, Aspect Ventures, Electric Capital, ZeroEx, Scalar Capital, and Multicoin Capital, as well as several key Ethereum backers. In 2018, more than 50,000 registered participants received the ICP service token with Airdrop. On December 18, 2020, DFINITY launched Internet Computer’s alpha mainnet. On May 10, 2021, DFINITY made the Internet Computer public, a step towards decentralization. 

Who runs the nodes in the Internet Computer (ICP) Network?

On May 10, 2021, at the Genesis (Genesis) block, Internet Computer began to be supported by 48 independent data centers located in North America, Europe, and Asia running 1,300 nodes. The Internet Computer network will continue to grow exponentially to support the next generation of mega-centralized applications, with 123 data centers running 4,300 nodes planned by the end of the year, and thousands of data centers running millions of nodes to support the decade-long fabric. It will become an open system, and more importantly, anyone will be able to become a node provider. Interested parties can apply to the Neural Network System for Data Center ID, purchase special machine nodes,

How fast Is the Internet Computer network?

Blockchain key technology, which is a scientific invention, enables Internet Computer to work at web speed, query calls are executed in milliseconds, update calls take 1-2 seconds to complete. More importantly, in the Genesis block, Internet Computer will have a block rate of 2.5 blocks per second, then quickly reach 10.3 bps (block per second) and approximately 1,000 bps by the end of the year. In case of an open version of Reddit running on Internet Computer, customized views of the existing content are formulated, providing user experience by executing query calls and presenting them to web browsers thanks to the node running in milliseconds nearby.

What does the ICP Token do?

Internet Computer are known as local utility program tokens that play important roles within the network. These roles are:

Facilitating Network Management

ICP tokens can be locked to generate neurons that participate in network management through voting, where they can earn financial rewards.

Generation of Cycles for Computation

The ICP provides a source value store that can be converted into cycles, calculating the power of the fuel burned when used. NNS (Neural Network System) converts ICP to loops at a variable rate, so it is preferred to ensure that network users can always create new loops at an approximately constant cost. Thus, the cost of acquiring fuel is also at predictable levels.

Rewarding Participants

The network creates new ICP to reward and encourage those who play key roles in keeping the network running, these are known as providing voting rewards to those participating in the administration, providing voting rewards to those who operate the node machines hosting the network and various other activities.

What do Loops do?

Cycles relate to the calculation of power in the role of fuel. They have a fixed value in the long run, which contrasts with the ICP, whose value will naturally change over time. Also, the cycles will be pegged to SDR, a currency defined by the International Monetary Fund, and 1 SDR worth of ICP can be converted to exactly one trillion cycles in the power calculation.

What do Neurons do?

A neuron locks the balance of ICP service tokens, allowing the owner to participate in the management of the network, where they can earn voting rewards.

Who are the General Buyers of ICP Tokens?

ICP token buyers are known as token holders who want to participate in network administration and earn voting rewards, and developers who need to convert ICP tokens into cycles to pay for computation.

How does the Internet Computer Network Nervous System Work for Voting?

NNS (Neural Network System) works by taking proposals created by network participants and deciding to approve or reject them based on the voting activity of neurons. Neurons are also used by participants to present new proposals. Once submitted, proposals are accepted or rejected after a short while, depending on how the sum of neurons voted.

What are the featured projects in the Internet ecosystem?

Internet Computer was launched with several high profile entrepreneurs and applications built on it. These:

DeFi (Decentralized Finance)

Enso Finance, the decentralized exchange that raised $5 million,

Tacen, a high-performance trustee exchange raising $2.5 million,

SailFish is known as a gateway to open Financial services.

Social

Distrikt is defined as a decentralized, professional social media network. It is known as the Open LinkedIn application, introduced by DFINITY at the WEF (World Economic Forum) 2020 in Davos and now released.

OpenChat, the open version of standard chat applications that is not owned by a major tech company,

CanCan is an open version of TikTok, demonstrating the scalability and power of Internet Computer,

Capsule states that it has raised $1.5 million as a decentralized social media platform protected from censorship.

Infrastructure

Fleek enables easy creation of open websites and applications. Currently, it operates 14.000 websites and pan-industry platforms.

Origyn refers to a pan-industry platform for tracking the origin of luxury goods, starting with luxury watches.

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