Internet Computer (IC) vs Ethereum: How Is The Internet Computer Different?

By Moses On-Chain | moses_on_chain | 7 May 2022

The Internet Computer (IC) is a blockchain innovation that began its creation by Dominic Williams in 2016. The focus of Internet Computer (IC) and the Dfinity Foundation was to build a decentralized blockchain network that aims to expand the internet’s functionality. So by this definition, IC’s focus is beyond just blockchain technology, it aims to build a decentralized and scalable cloud-like platform that can store data, perform computations, support governance, and build services on-chain through the internet directly to the users. Essentially, it seeks to address the issues plaguing the traditional internet: poor data security, complex systems, and private infrastructure hosted by tech monopolies.

The Internet Computer (IC) is about building an open-access internet. It does this through the Internet Computer Protocol (ICP), which is the public computing platform for developers, enterprises, organizations, and governments to deploy their unique softwares and services directly to the public internet.

Because IC is building an “open-access internet” and calls itself the “Internet Computer,” it immediately draws comparisons to Ethereum, which itself is often called the “world computer.”

Similar to Ethereum, the IC’s platform allows developers to run computing applications on a decentralized infrastructure, but different to Ethereum, through the IC anyone can run these applications efficiently, at scale, on-chain, and with the flexibility to build more private applications based on specific needs.

So you can say Dfinity’s creation is similar to Ethereum 2.0, but actually, its scope extends beyond what Ethereum can do (its capabilities). Dfinity wants the internet itself to be able to support and host software applications and data, instead of relying on cloud-hosting services and off-chain ramps to execute certain actions. So the purpose of the Internet Computer (IC) is to extend the public internet, so it can also be the world’s compute platform.

How Is The Internet Computer Different Than Ethereum?

Difference #1: Purpose

Ethereum provides the technology stack for decentralized applications that deal with transacting in and using digital assets such as cryptocurrencies (ETH & ERC-20 tokens) and NFTs (ERC-721), but the Internet Computer (IC) seeks to replace the traditional internet with a Web3 tech stack and operating system.

Difference #2: Capability (smart contracts)

Ethereum uses smart contracts that automatically execute code, agreements, and actions, but the Internet Computer (IC) uses canisters, which are similar to smart contracts, but are built to be more scalable.

IC smart contracts run at web speed, they can serve web experiences directly to end users providing end-to-end blockchain security, can be used to create scalable dApps, and can process and store data at a relatively stable cost (a tiny fraction of traditional blockchain costs).

Dominic Williams gives a great example of this. He says, “IC canisters can do things that aren’t possible on Ethereum today.” For example, “a GB of smart contract data can cost you about $120,000,000 on Ethereum, but on the Internet Computer, you can expect that to be below $5 per year paid in Cycles.”

Difference #3: Blockchain & on-chain execution

One of the biggest advantages that separates IC from Ethereum is that it’s the world’s first blockchain that runs at web speed with unlimited capacity — solving the blockchain trilemma by producing a blockchain network that’s decentralized, secure, and scalable. Ethereum has struggled with one of these at all times, in particular the ability to scale.

Because of these limitations, Ethereum will depend on Layer 2 networks for scaling, but IC claims to solve the scaling problems without compromising on security or decentralization. Moreover, IC does everything on-chain, without the need for Layer 2 off-chain rollups for transaction processing.

Difference #4: Cryptography

ECDSA is the cryptography scheme that secures Ethereum balances and smart contracts, but the Internet Computer relies heavily upon BLS threshold cryptography.

Difference #5: Architecture, Network, & Consensus

A difference between Ethereum and the Internet Computer is how the UC utilizes independent data centers around the world. This means that IC doesn’t rely on AWS or enterprise cloud providers, and instead of using Proof of Work or Proof of Stake, IC rewards the independent data centers when they correctly operate standardized computer nodes. In other words, the IC network is hosted by a decentralized network rather than centralized server farms.

Difference #6: Speed & Efficiency

Ethereum suffers from high transaction fees and slow transaction confirmation times, the Internet Computer’s massive throughput ensures it’s able to achieve absolute transaction finality in 5–10 seconds, with almost unlimited scalability thanks to the Threshold Relay Consensus.


Dominic Williams has stressed this repeatedly, that the Internet Computer (IC) would not exist without Ethereum. Moreover, there are various differences, but that’s because they do different things and are meant for different purposes. Dominic has stated that IC is not an “Ethereum Killer,” but rather works best as a complimentary network, which is why the team at IC has worked so hard at creating an interoperable network with Ethereum.


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