What is ICON (ICX)? [A Comprehensive Guide to ICON]

By Mr.CryptoWiki | cryptocurrency | 3 weeks ago

$5.04 tipped


Scalability may be the biggest problem that projects face right now. After all, if a single network is unable to scale to a commercial level of use, then the network is as good as worthless. But beyond this, there is a longer term problem that may prove to be a bigger obstacle for the expansion of crypto: interoperability.

Interoperability, as the name suggests, has to do with different networks being able to communicate and cooperate with each other. For the moment, this feature is nebulous: there aren’t many tokens that can directly function on a different blockchain. In a limited sense, it is the equivalent of being able to use a card from one nation in another country without having to worry about foreign exchange. You simply go through the process with no additional work required on your end.

This feature is not yet present at any appreciable level in the blockchain industry. You can’t really switch between networks with that level of ease. Developers and teams understand stand that this is a major obstacle to the growth of cryptocurrencies. In the real world, industries work together and require seamless interaction in order to function efficiently. The lack of interoperability between blockchain systems would cap the amount of potential that one particular network could achieve. For example, perhaps the financial, healthcare, insurance and digital identity work closely together - it would make sense to directly link separate blockchains used for these niches to make the process instantaneously and as efficient as possible.

This problem of interoperability is what ICON (ICX) is tackling. We examine the unique architectural design of the ICON network, how it plans to achieve interoperability and its general purpose. 

The History of ICON (ICX)

ICON (ICX) was launched in 2017 by the Dayli Financial Group, a South Korean fintech company that provides wealth management and data solutions. ICON conducted its ICO in September 2017, raising just under $43 million. 

ICON was built with the vision of connecting blockchain networks, addressing the aforementioned problem of interoperability. Stating that we have the potential to go beyond border-limited economies and connect blockchains without the need for exchanges, the ICON team is building a platform that where “anyone can connect to any blockchain” and to “create a society that enables exchange of values freely across the boundaries between countries and industries.”

To that end, the ICON Foundation has charted a long-term roadmap that covers the specific aspects of its technical architecture that will develop and refine interoperability, and support cross industry collaboration. These specific areas include the blockchain itself, governance and services.

Blockchain development relate to the underlying protocol upon which the ICON network has been built. Governance refers to the voting, election and reputation system present in the network. Services refer to wallets, SDKs, hardware wallet support, decentralized exchange (DEX) and other secondary features of the network that supports its overall growth and usability. We discuss all of these features in detail below. 

ICON team members describing the approach, features and applications of ICON

Advisors to the project include Don Taspcott and Jehan Chu. Tapscott is a well known proponent of digital assets, and is a considerable voice in the crypto sphere. Besides speaking and panel discussions, he is also known for writing the book Blockchain Revolution, co-authored with his son Alex Tapscott, who is a famous crypto supporter in his own right.

Chu is a prominent blockchain investor who has been involved in the space since 2013. As the co-founder and Managing Partner of Kenetic, a Hong Kong based blockchain investment firm, he has invested in other blockchain startups, most notably Parity technologies, a team building on the Polkadot network. 

It’s clear what interoperability is, and why it is important. But how does ICON plan to implement a system in order to solve the issue - which is quite complicated. It turns out that they are putting together multiple fundamental features that together they hope will create a seamless flow of data and operations between blockchains.

The Purpose of ICON (ICX)

351665157-ba6f24a32ae1bc00f14bfce81aaeae2b5fc7ce2bcbaaa5396d7ec859878b8cbb.jpeg

How the ICON ecosystem is imagined. Source: Icon whitepaper

ICON is in some sense an evolution of most of the networks that came before it. Or at least it attempts to be, by offering much of the same blockchain transaction and smart contract features but with the additional benefit of seamless communication with other blockchains. In order to achieve this, it has designed several distinct concepts: loopchain, the transaction fee and score operation policy, the ICON Incentives Scoring System (IISS) and the ICON Republic.

At the core of all of this is ICON’s loopchain, which is ICON’s name for its unique blockchain. In a nutshell, loopchain is an enterprise focused blockchain that is more flexible than a blockchain like Bitcoin. Enterprises require more computing capability than just simple transactions - which is where smart contracts come in. ICON sees itself as better than Ethereum, which itself has great enterprise utility, because it claims to have better performance and the capability of linking with other blockchains.

The various “islands” in the ICON ecosystem connect in four possible ways (without going into detail, this is what lets different networks connect). These connections are made possible via the ICON Republic, which is essentially the term that the team uses to describe the overall interoperability framework. ICON Republic consists of C-Reps (community representatives) and Citizen Nodes. The Republic acts as a communication channel between entities. 

351665157-f32d6f819a8ff3a8a99d746504288d0726ec86347cf7affc02e653642804e5d4.jpeg

The various industry cross collaborating. Source: ICON whitepaper

The whitepaper also describes this system using the terms Nexus and Portals. A network in the ICON Republic is referred to as Nexus while C-Reps are referred to as Portals. The network uses a Blockchain Transmission Protocol (BTP) to relay information between Portals that are connected to each other via the Nexus.

Each blockchain network in the Republic governs itself and does not interfere with the governance of other networks. The whitepaper reads “the Nexus functions as a form of indirect democracy, where the representatives of each blockchain reach consensus by exercising a systematically and fairly allocated vote.” The Nexus holds Representational channels, which are blockchain channels composed of nodes that have the capacity to vote. 

The transaction fee is related to the SCORE policy, which stands for the Smart Contract On Reliable Environment. In other words, its for a smart contracts feature. The transaction fee policy determines the cost of executing smart contracts. We won’t examine this in detail here. For more information, read the ICON’s whitepaper on the subject.

The ICON Incentives Scoring System, or IISS, is how the network incentivizes users to behave honestly. The team has described it as an “AI-based evaluation system” that allocates ICX as rewards to nodes effectively. 

All of these features come together to allow blockchains to operate with each other reliably, securely and seamlessly. Or so the team hopes - this kind of endeavour is complicated and involves roping in multiple players in order to test all features at a large scale. But it certainly lays the groundwork for what might be a fully functional interoperability focused system that could see a lot of use in the future.

We recommend reading the primary ICON whitepaper to get a full sense of the technical architecture. 

Partnerships

In a space where cross collaboration is important, ICON does well. The foundation has established a few notable partnerships over the course of its existence. 

351665157-2f700c3414ba531962a4b38958b4cc1271c6b3e360256efa7b6af1c761b80ee8.jpeg

Source

The thing most worth mentioning is that a Memorandum of Understanding with Samsung, a fellow South Korean entity which is very keen on cryptocurrencies and blockchain technology, having already shown support for it with its flagship smartphone the Galaxy S10. The partnership will see Samsung use ICON’s Chain ID for the Samsung Pass project. This has to do with the biometric identification system used in mobile devices. 

351665157-1a4d2d99f588919c665f953214c6e416016d8782cb7224a362d0369cd0ad867c.png

Source

ICON has also partnered with Line, a messaging app that is popular in many parts of the world, and most used in Japan, Thailand and South Korea. The collaboration sees the two entities build a Line blockchain network and create Unchain, a blockchain ecosystem. According to the official announcement, “DApp services discovered through ICON and Unblock, a subsidiary of LINE dedicated to blockchain research and to accelerate DApp projects, will be integrated with Unchain.”

351665157-d394ad2f54bec1e2785b495c705689d943dce52f2981defa9ad1e6e47229b645.png

Source 

ICON has also announced a strategic partnership with Chain Partners, a blockchain fintech company. The latter listed ICON’s ICX and related DApp tokens on its exchange, Daybit, while the former joined ICON’s public representative election as a candidate.

Competitors

Naturally, being the ever looming problem that it is, several projects and startups are working on interoperability solutions. Polkadot, Cosmos, Aion and Ark all projects worth investors’ attention in their own right. Polkadot and Cosmos in particular are grabbing a lot of media headlines with their development and solutions.

These competitors each employ their own complex solutions to the problem - and tackle the other issues related to blockchain adoption as well, such as security and performance. 

ICON’s premise is that it can solve the problem of borders between economies and industries. Then again, so can all of the other competitors, and some of them are applying more recent research in their design. Make no mistake, ICON is up against some tough competition in this niche, and perhaps all that it can do to give more confidence in its potential is develop a strong ecosystem of many players. To date, it hasn’t done that in any significant way, but that remains to be seen. 

Conclusion

The problems that the ICON Foundation are addressing with its network are critical ones that need solving if blockchain technology is going to disrupt the world in the manner that people say it is. Its approach is novel. Its team provides regular updates.

However, can it continue to serve as the go-to platform for interoperability in the future? Especially with the increased focus on this problem in recent times?

The answer to that is anyone’s guess. For now, the most solid advice one can offer is this: blockchain interoperability is a major problem, and you can be sure that whatever project succeeds in providing unrivaled features and properties, as well as developing a strong business ecosystem, will be a top project among all. Keep an eye on this niche.


Mr.CryptoWiki
Mr.CryptoWiki

In crypto since 2002 ;)


cryptocurrency
cryptocurrency

Crypto Wiki :)

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.