The internet computer: what awaits us is exciting, says Josh Drakethe Chief Operating Officer of the DFINITY Foundation†
The internet has been around for over 40 years. It is the backbone of such a large part of the world’s communications and commerce for nearly 30 of them. Even now, much of the infrastructure that powers the services that billions of people rely on every day is built with the same legacy technology.
This has resulted in an internet that is inherently complex, inefficient and insecure. Millions of different protocols, some proprietary, some open source, all need to find ways to work together. The result is a ‘patchwork’ of servers, cloud services and platforms that do not always communicate easily or not at all. It also causes data privacy and account security issues. By deploying so many moving parts, there are more places where data can be mined, or attackers could potentially find exploits.
That’s why the internet as we know it wasn’t really designed for web3. Until now, cryptocurrency users had no choice but to tolerate it to access individual decentralized services. But as more of these platforms have emerged, there is a need for a unifying structure that allows them all to communicate reliably and without sacrificing efficiency. We essentially need to “reboot” the internet, and thankfully the work is already underway.
Get to know the Internet computer
The Internet Computer Protocol (IC) was designed to replace the proprietary, legacy stack that currently powers the Internet. It was created and launched by the DFINITY Foundation, but is managed by a DAO. The IC is composed of a set of standards that enable a fully decentralized global network that can still provide modern web speeds and data storage. The network also uses the native ICP token to perform decentralized management. This allows all holders to vote on the future development of the network.
To bring the vision to life, DFINITY had to make use of several innovative features. First, the entire blockchain is built as multiple, interconnected layers. It all starts with independent data centers hosting their own IC hardware nodes. These nodes all work together to create different subnets. The subnets then act as hosts for what are known as “canister smart contracts”, which are essentially an evolution of smart contracts. Canisters are all fully interoperable, can be uploaded by any user and contain both the code and memory to run them, known as ‘cycles’.
The internet computer also uses a “reverse gas” model which, as the name suggests, turns the gas fee model of blockchains, such as Ethereum, on its head. Instead of the user paying, developers provide the money needed to run the applications/contracts that use their gas – meaning users no longer have to pay to, for example, mint an NFT or perform a swap on a decentralized exchange.
All activities in the chain are coordinated by the so-called Network Nervous System (NNS), a form of DAO. The NNS is the mechanism responsible for controlling, configuring and managing the entire blockchain. It does this by structuring governance, monitoring nodes, issuing new tokens, and many other important roles.
The Internet computer: a better web3 environment
The entire IC network is also balanced by a unique type of tokenomics. First, the NNS rewards node operators and decentralized governance participants with new ICP at regular intervals. All buses on the blockchain require cycles to execute their code. These cycles are bought with ICP and once they are used up, the underlying assets are considered burned. This entails both inflationary and deflationary elements to balance the overall ecosystem.
This all adds up to a system that is self-sufficient, decentralized, scalable and secure at the same time. Modern platforms and services can all be delivered without the need for proprietary APIs, cloud services, third parties, firewalls, or any of the other complexities of modern eCommerce infrastructure. Just about anyone can build anything they want and make it work seamlessly with other web3 offerings.
This provides new models not only for companies, but also for fundraising in general. Artists, charities, entrepreneurs and more can easily tap into the power of the crowd, and with complete security that neither their data nor their money can be misused.
How far ICP has come
The IC was officially launched in May 2021, and even in the short time after that, it has a lot to be positive about. The IC has a throughput of 11,500 transactions per second (TPS) with a finality of 1 second, a big difference from Ethereum and BItcoin, which quote a maximum of 15 and 7 TPS respectively.
At the time of writing, the network has already processed more than 670 million blocks, at an average of about 33 blocks per second, with a total of more than 3 million transactions. More than 49,000 unique canister smart contracts have also been implemented, with average data storage costs of just $0.46/Gb per month. This is a figure that is vastly different from Ethereum, which currently costs $127 million to store 1GB of data. Finally, the current value of all ICPs deployed on the network is approximately $5.8 billion, based on current market conditions.
A vibrant community
These stats are great, but they wouldn’t mean much without a vibrant community of dApps to offer users decentralized services. Because of its infinite scalability, low data storage costs, and reverse gas reimbursement model, the Internet computing has found a bit of a niche in creating decentralized social media or DeSo projects. For example, DSCVR is a social media platform similar to Reddit, which is owned and operated by the users themselves. DSCVR has amassed 40,000 users since it launched its beta in June 2021. Next, OpenChat fulfills the promise of uncensored direct messaging that also protects all end-user data privacy and currently has more than 50,000 users.
Another example is Distrikt, a fully decentralized community-owned professional network with already 70,000 users. Users of the platform vote on upgrades and user data will never be mined or sold. The platform is the first professional social network based entirely on blockchain. All district appointments, uploads and exchanges take place on-chain.
The IC’s ecosystem protocol would not be complete without its own answers for DeFi. Decentralized exchanges, such as Sonic, ICPSwap, and Infinity Swap, allow users to earn passive income by providing assets to liquidity pools. As for those into non-fungible tokens, many unique collections have popped up so far, including ICpunks and Internet Astronauts.
The road ahead of us
This is just a sampling of what Internet Computer already has to offer, but what’s to come is perhaps the most exciting of all. First, the network plans to become interoperable with other blockchains, first and foremost with Bitcoin itself.
This is not done through custodial wrapping, as is used on many other networks, but through direct integration of Chain Key Cryptography. This means that ICP can create transactions directly between native Bitcoin wallets. This brings Bitcoin liquidity to ICP and smart contract functionality to Bitcoin. Since DFINITY’s plan is to then integrate with Ethereum in a similar fashion, the topography of the DeFi ecosystem is about to change dramatically for the better.
DFINITY has also recently developed an HTTP equivalent standard protocol specifically designed for Internet computers, making all services fully compatible with the existing Web2 Internet infrastructure. This allows for an open flow of data communication between both the old Internet and the Web3 space, eliminating the need for additional services that act as “blockchain oracles”.
The internet computer: service nervous system
Finally, ICP plans to launch fully decentralized management of all social media through an upgrade known as the Service Nervous System (SNS). The SNS allows users to vote on the direction of each platform in the network. These can be things as simple as basic UI upgrades, to implementing new dApp features or user incentive models. This also allows entrepreneurs and developers to escape the need for VC funding as the SNS allocates a certain allocation of governance tokens for specific parts of the ecosystem such as developers, the community, a treasury reserve, etc.
There is really no limit to what can be built using the internet computer. Just looking at what is being done today is inspiring, but it is what will happen in the coming years that will really define what web3 can become. Combining technical versatility with accessibility and scalability has opened the door to blockchain services that truly work for everyone. Best of all, an evolutionary model that allows users to remain in full control means that the platform can only get better and better as more people stay involved.
About the author:
Josh Drake is the Chief Operating Officer at DFINITY Foundation, a major contributor to the Internet computing. Before joining DFINITY, Josh worked at Coinbase, a digital currency wallet and platform. Past work experiences include Veritas Technologies, Maxim Integrated, Triple Canopy, Law Enforcement, and the United States Marine Corps. Josh has a diverse background and experience in real estate, workplace management, security, backgrounds and travel. He has a Bachelor’s degree in Management.
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