Internet Computer in focus, strong project or clever rugpull?

Internet Computer in focus, strong project or clever rugpull?

By Austras | Crypto in focus | 22 Sep 2021


There are several factors that play an important role when coin's marketcap is decided. The tech, team, history, use cases and potential all play major roles. But what is most important? ICP saw a large price jump with its release and has been on a slow decline ever since. How did this coin end up as #9 in marketcaps from nowhere and why did the price drop? How does this project even work?

Background

Internet computer is very fresh coin, it's just few months old as it released in May earlier this year. The company behind ICP is the non-profit organisation DFINITY, who created the coin with a strong line up of investor backers. The company itself was founded in 2016 and has an active group of over 200+ employees that are working on various projects, ICP being their biggest. 

The development started sometime after the project was funded in 2017. The large amount of backers meant that the initial launch of the coin had a very significant launch fund, more so than any I've seen before. This meant that the ICP coin launched with roughly 150 million tokens they were valued at 450$ dollars each and the coin appeared in the top 10 spot the first week it was out. Its marketcap has been decreasing ever since and it is now below top 20. This decresae after launch has caused investors to think this coin is a rugpull or scam.

Network

ICP is built up to run smart contracts at web speeds at infinite scalability. The platform is supported by data centers that host nodes that process data & transactions. Each node is also built up out of several thousand subnets that users can access for creation of smart contract supported Dapps. These data centers comply with a central governance system known as NNS, if data centers run nodes that avoid committing errors they are rewarded in ICP. 

The ICP coin is used on the network to pay for transaction, running nodes & smart contracts. The smart contracts are hosted on the third level of the netowork, the subnet. Each subnet stores and runs smart contracts in a canister, running these costs computation power which you pay for with ICP, in other words this is a fancy way of saying fee.

A major advantage of ICP is that these decentralized data centers can split the load between subnets and create new ones. Along with this there's different canister hosting in the subnets that allow for different levels of computation and fault tolerance. Developers can choose which canister/subnet they wish to use depending on speed & level of faulty nodes that are acceptable. With both the specialisation in nodes & the ability to split subnets the protocol can attain high levels of scalability, if it's infinite remains to be seen. 

Use cases

The main use case is high speed scalable programs to be run at web speeds. Normally applications and services have to rely on an ISP in some way or another to host their service and that can get expensive and tricky. ICP wants to allow developers to have a system that requires no middle man and potentially risk their project. The ICP ecosystem is self funding where data centers and subnets get paid for running their smart contracts/programs. It's a really good example for a good investment where the network sees use which increases its value along with the on-chain deflation.

Internet computer today

ICP had a rocky start, the project had immense backing which lead to a large initial jump when it distributed their tokens. When the distribution took place they released all their tokens to different exchanges and investors stared selling off their tokens to make money, this caused a flash sale as the release took place in a short time. The company & token hasn't been able to shake this initial misstep ever since, despite the project having a really good idea and team behind it. It is very unclear if the market will come around and support this project, with some time this project will either make it or break it.

Pros:
  • Framework that is safe from censorship
  • Easily accessible
  • Deflationary
Cons:
  • Not decentralized
  • Fairly untested
  • Low adoption
  • Rocky launch

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Austras
Austras

Product manager & tutor, love learning & teaching others. || https://cointr.ee/dorfel


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