ICP is the native utility token of the Internet Computer Protocol. It is mainly used to facilitate the blockchain’s governance and to reward network participants. Internet Computer Protocol aims to bring greater efficiency, speed, and decentralization to computation and data storage.
Today we will closely examine the blockchain and the ICP token to determine whether it is a legitimate project and a good crypto investment.
So, let’s get started.
What is the Internet Computer Protocol (ICP)?
The Internet Computer Protocol is a set of protocols that enable independent data centers around the world to work together and offer a decentralized alternative to the existing centralized Internet providers.
The project aims to address the shortcomings of the traditional Internet, such as monopolization of services, poor security systems, and misuse of users’ data, by creating a decentralized Internet and global computing system that operates via open standards and avoids conflicts of interest.
ICP’s distributed network of data centers can run all the applications accessible via the traditional internet standards like DNS (domain name system) which is widely used via web browsers and smartphones.
How Does ICP Work?
The Internet Computer Protocol connects a sovereign network of devices to form what is known as a “world computer” that enables the decentralization of Web3 services.
Web3 Enabler
ICP’s Web3 enabler allows decentralized applications (DApps) to leverage the blockchain to solve privacy issues in traditional social networks, such as sharing users’ sensitive information with third parties and an overwhelming number of advertisements.
Normally when signing up on social media, users have to accept the general terms and conditions, which allows the platforms to take advantage of user data. However, decentralized social networks built on ICP allow users to influence their terms of agreement.
Users are considered part owners and team members of the platforms. They are also included in the project’s decentralized autonomous organizations (DAOs) where they are given the right to vote on governance decisions, propose developments, refer the platform to other users, or help with tasks like content moderation.
World Computer
The Internet Computer Protocol enables complete decentralization for developers, who are allowed to build online services without ever needing to rely on traditional IT services like cloud computing, databases, and web servers that are centralized, insecure, and subject to censorship.
On ICP, developers can build, host, and serve applications in a decentralized manner where they are deployed directly onto the public internet. Furthermore, the blockchain incentivizes open-source and transparent software development.
For example, instead of running a dedicated server in Google Cloud, the ICP would have no fixed physical address when moving data between servers owned and managed by independent computers (nodes) worldwide.
The network establishes a fee based on the amount of computing power that is required by a developer’s project. As long as the fee, which is charged in ICP toke, is paid, the website will be available on the internet.
What is the ICP Token?
ICP is the native utility and governance token of the Internet Computer Protocol. The cryptocurrency has three main utilities.
Firstly, ICP is used to fuel the smart contracts when they perform computations on the blockchain. When the tokens are converted into cycles, it is burned and completely removed from supply. This makes ICP a deflationary token.
Secondly, ICP can be staked in the Network Nervous System DAO that controls voting neurons on the Internet Computer Protocol. Voting neurons generate rewards for users who participate in the network’s governance.
Lastly, ICP is a store of value that allows users to invest in Web3 services operating on the Internet Computer Protocol.
ICP Tokenomics
At the time of writing, ICP is trading at $12.28 – down 0.7%. The token has had a 24-hour trading volume of $118.2 million. ICP’s market capitalization stands at $5.629 billion.
Out of a total supply of 513.6 million ICP, almost 456 million ICP are currently in circulation. The fully diluted valuation of all the ICPs in supply is $6.34 billion.
ICP reached an all-time high of $700 in May 2021, while its lowest valuation was recorded in September 2023 when it stooped low to $2.87.
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Is ICP a Good Investment?
Internet Computer Protocol was developed to provide users and developers with a platform that can facilitate faster transactions with infinite scaling capacity. The blockchain intends to build an internet that is capable of hosting applications of any scale, ranging from DeFi and smart contracts to tokenized internet-based services and websites.
Developers prefer the ICP platform because it enables them to build open-source internet services that could potentially replace centralized big tech companies that exploit their users.
All things considered, I can say that ICP is a good investment and a very promising blockchain and cryptocurrency project. However, it is highly recommended that you do your research before making investment decisions because cryptocurrencies are highly volatile. Another point to note is that you should only invest money that you can afford to lose.
