Internet Computer - $ICP, Asset Review
General Information-What is Internet Computer
Internet Computer Background
Internet Computer Funding/Collaboration
Token Information-Tokenomics
Consensus/Governance
Additional Information-
Developer Activity/What’s Next?
Technical Analysis
Conclusion
General Information-
1. What is Internet Computer?
Internet Computer Token (ICP) is a digital asset that is used on the Internet Computer platform. The platform aims to be a decentralized network that aims to provide a high-performance, scalable, and secure infrastructure for decentralized* applications (dApps) and smart contracts. $ICP is used to incentivize the network's validators and stakers, who help to maintain the network and ensure its security. It is also used as a medium of exchange within the platform, allowing users to transact with dApps and other services. $ICP is built on the Dfinity blockchain, which uses a novel consensus algorithm called "Threshold Relay" to achieve high speeds and low transaction fees built by Dfinity foundation. The main goal of the Internet Computer is to fight against the monopoly that google/amazon have to host applications but we will discuss this more next.
2. Internet Computer Background
Dfinity Foundation is a project based out of Zurich, Switzerland, and was founded by Dominic William in 2016. Dfinity is also full of talented researchers, engineers, and world-class executives. Dominic Williams created Internet Computer in hopes that it will be leveraged against Google and Amazon’s cloud infrastructure. Today, the big tech giants have control over all the applications that exist on the network which may be problematic depending on who you ask. In my opinion, there should always be competition and if there isn’t that will cause problems down the line. In today’s world, we can see what happens when a platform decides to censor certain people because they don’t share a certain perspective with them. The Internet Computer wishes to run all web3 applications on its network in a decentralized manner to avoid a monopoly.
3. Internet Computer Funding/Collaboration
Dfinity held an ICO in Early 2018 raising a total of 121 million dollars according to CoinCodex which may be found here for ~24% of the supply. We will go over tokenomics in the next section. Dfinity has prominent investors like Andreessen Horowitz, Polychain Capital, SV Angel, Aspect Ventures, Electric Capital, ZeroEx, Scalar Capital, Coinfund 8Decimal Capital, and Multicoin Capital. Dfinity has been working on introducing smart contracts to bitcoin which may* lead to massive innovation for both networks. Outside of that, there are not many partnerships or collaborations with Dfinity that I could find. This is a good thing in my opinion because from what I can see Dfinity has been working on improving their services and focusing on building out what Internet Computer should be.
Figure A
Token Information-
Tokenomics
$ICP is the native token for the Dfinity blockchain. Currently, the circulating supply is 274,544,468.97 with no capped supply (inflationary) according to CoinMarketCap. The early distribution of can be broken down per the following: 37% of the supply was allocated to investors, 1% was allocated to rewards and airdrops, and the remaining supply was allocated to the founders and project. As mentioned earlier, Dfinity Foundation was able to raise ~120 million dollars over about 18 months. The token has three main use cases outside of the things I mentioned in the first paragraph. 1) Governance, 2) Computing, and 3) Rewards. Active users can earn governance over the network if they lock their tokens which gives them rewards and it all contributes to the computing aspect which connects the three use cases despite all having their distinct purposes.
Figure B
2. Consensus/Governance
$ICP uses a proof-of-stake consensus to secure the network. This also means token holders who lock their tokens gain access to the network when it comes to voting on proposals or amendments. However, there is a catch here that one may not grasp if they don’t look closely enough. In most governance processes in a proof of stake consensus, the majority token holders have the most control over what amendment gets approved or disapproved. In the $ICP token stake there is an option to stake for EIGHT (you read that right) YEARS. When we look at the last paragraph we see that most tokens were provided to the Dfinity Foundation which leads me to believe* that they have total control over the network. The code itself is also not open source which leads me to believe they are acting in the favor of centralization in the future. The last thing worth noting is that the NNS is a single point of failure in the blockchain as the Dfinity Foundation is the main entity that governs this blockchain.*
Figure C
Additional Information-
Developer Activity/What’s Next?
It's no secret that developer activity is sky-high compared to any other blockchain…But the real question is why? Internet Computer is working on becoming “the” internet of the world where every application runs through it. Even though the Internet Computer has some centralized components to its governance it won’t stop people from building great things on the network. As for the roadmap the Internet Computer hopes to capture the majority of users and applications by 2030. It's clear that the network is gaining traction despite the token plummeting upon release. For more information, the full roadmap may be found here.
Figure D
2. Technical Analysis
Figure E
$ICP’s all-time highs hit $630 and since then have been mainly down-trending to $4.16(-99.45%.) When something is mainly down-trending like $ICP, it is best to wait and let the dust settle as bottoms take a long time to form. Currently, there is no support and the price recently hit an all-time low. So it's best to be sidelined until more data is presented. However, at the moment there is some bullish divergence on the 1W RSI, but I would not be interested in longing in this area. If you believe in the long-term value of $ICP, there is nothing wrong with dollar cost averaging in this area. As for myself, I am not interested in longing until the chart forms a base with strength being found on the RSI + EMA’s + Volume accordingly.
Conclusion
I like what Internet Computer is doing as far as its mission. They are out to take on big tech like Google and Amazon who need competition. By leveraging blockchain, Internet Computer will be able to offer a cheaper solution to developers, enterprises, and anyone else who wishes to build their applications on. Everything about this mission is highly commendable, I hope they achieve great success. However, my biggest concern with Internet Computer becoming successful is their governance process. The Dfinity Foundation who were early token holders have a lot of influence over the network which may* mean the odds may be stacked against you. This is similar to current monopolies where a few people control the laws even if they benefit you or not. Where has that taken us so far? Corruption is the short answer. Again, I don’t want to sound like a complete skeptic because Internet Computer does mention they plan on making their code open source one day. This doesn’t mean that I can’t be bullish on the future of $ICP or Internet Computer because things may* change.