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Internet Computer (ICP) Report & Analysis

Written by Kyle Niedzwiecki

Co-founder & CTO of Black Mountain Investment Group and Portfolio Manager & CEO of The Jupiter Fund.

January 1, 2022

What is the Internet Computer?

The Internet Computer was founded and launched by the Dfinity Foundation, a non-profit research organization based in Switzerland, and is the world’s first web speed blockchain with unbounded capacity. It enables the complete reimagination of software – providing a revolutionary new way to build tokenized internet services, decentralized financial systens, and even traditional enterprise systems and websites.

Dfinity’s Internet Computer is a decentralized network that aims to revolutionize the way we build and deploy applications on the internet. It is designed to host decentralized applications (dApps) on a distributed network, enabling fast transaction speeds and a highly secure environment.

The network’s power is fueled by its native token, the Internet Computer Protocol (ICP) coin, which has seen fluctuations in market cap and price levels in the past. The ICP coin’s highest price was reached in May 2021, but since then, it has experienced a downward trend. However, it is essential to consider past performance as just one factor when making investment decisions.

The total supply of ICP coins is fixed, but the circulating supply will gradually increase as more tokens are unlocked and distributed. This aspect may have an impact on the cryptocurrency’s price in the near future. Technical analysis, including factors like moving average and the greed index, can help provide some insight into the potential price movements of the ICP coin.

Decentralized applications built on Dfinity’s Internet Computer can benefit from direct integration with blockchain technology, offering a more secure and reliable alternative to traditional IT infrastructure. The platform’s programming language, Motoko, allows developers to create dApps with ease, taking full advantage of the Internet Computer’s features.

As the cryptocurrency market evolves, the decentralized network of Dfinity’s Internet Computer offers a promising alternative to the Bitcoin network, with its fast transaction speeds and ability to host dApps. However, it is crucial to be cautious and conduct thorough research before making any investment decisions, as cryptocurrency prices can be highly volatile and unpredictable.

Who Founded the Internet Computer (ICP)?

The project was founded in October 2016 by Dominic Williams, a crypto theoretician, serial entrepreneur, prominent member of the Bitcoin and Ethereum early technical communities, and Founder and CEO of Fight My Monster, a MMO game that scaled to millions of users. Dominic graduated 1st in his class in Computer Science at King’s College London and has also founded multiple startups before going all-in on Dfinity.

Over the course of the next 2 years, The Dfinity Foundation raised $121 million from multiple notable cryptocurrency investment firms including but not limited to: Polychain Capital, Andressen Horowitz, Aspect Ventures, Electric Capital, Scalar Capital, and Multicoin Capital. With their name and capital backing The Dfinity Foundation, Dominic and his team had more than enough resources to launch the project. May 10th, 2021, the Dfinity Foundation launched the alpha mainnet of the Internet Computer and early participants that were either VC’s or users engaging in the ICP token’s airdrop could now freely trade those on the open market. In addition to the mainnet launch allowing tens of thousands of community members to goern the Internet Computer network, the Internet Computer’s source code was released into the public domain, allowing thousands of developers to build on-top of the network.

What Makes the Internet Computer Unique?

Internet Computer’s marketing team is pushing this project as the third iteration of the blockchain, alongside the likes of Bitcoin & Ethereum. In 2009, the 1st invention in cryptocurrency was Bitcoin, playing the role of digital gold. In 2015, the 2nd invention was Ethereum, which gave birth to the DeFi movement and smart contract technology. An equidistant six years later in 2021, the 3rd iteration of the blockchain is reimagining how you build everything. Although this is a very audacious goal for such a new blockchain, this is the only project of its kind and is infinitely more scalable than any Layer-1 chain. In addition to creating the Network Nervous System (NNS) and the next generation of smart contracts, Canisters, the team also invented Chain Key Technology. 

Photo by Dfinity Community

Chain Key Technology (Chain Key Cryptography) is the scientific breakthrough behind the Internet Computer and that allows it to run at web speed – where update calls take 1-2 seconds to finalize and query calls finalize in milliseconds. For example, let’s say a user views a decentralized version of Instagram running on Internet Computer. When that user opens the app, just like web2 Instagram and its AI formulas dishing you the best content, the decentralized Instagram serves user-specific views of the content which is carefully calculated into your web browser by query calls, finalizing in milliseconds. However, when a user wants to publish a post, make a comment, give the creator a tip, like a post, or interact with the platform in any way, this update to the hosted content would require the use of update calls, taking 1-2 seconds to finalize. 

It is also one of the fundamental components behind the Internet Computer, allowing the blockchain to have a single public key. This is an enormous advantage over traditional blockchains (Bitcoin, Litecoin) because only on Internet Computer is it possible to have a single identity for the internet. 

Internet Computer’s Core Components and Innovations

The Network Nervous System (NNS)

The NNS is a decentralized autonomous organization (DAO) that governs the Internet Computer. It is responsible for managing network upgrades, managing ICP token supply, and rewarding participants. The NNS also enables users to submit proposals and vote on them, shaping the future of the network.

Motoko Programming Language

Motoko is a new programming language developed specifically for the Internet Computer. It is designed to make it easier for developers to build and deploy applications on the network. Motoko is a statically-typed language with a strong focus on safety and developer productivity.

Canisters: A Scalable Smart Contract Architecture

Canisters are the building blocks of the Internet Computer. They are self-contained, scalable units of computation that can hold data, code, and state. Canisters are designed to run in parallel, allowing the Internet Computer to achieve unprecedented levels of scalability and performance.

Internet Computer Ecosystem

Photo by Dfinity Community

With the alpha mainnet launch about 7 months ago, Internet Computer ecosystem is already comparable to many Alt-L1 blockchains. There’s a multitude of projects in every category and it’d be a lot to break them all down, so we’re going to highlight over a few great ones.

Plug Wallet – Built and open sourced by Fleek with over 100,000 users, it is the ICP version of Metamask and allows you to access your ICP, Cycles, NFTs, and other tokens.

Distrikt – A completely decentralized, community-owned professional network, similar to the likes of LinkedIn with over 75,000 users. Unlike web2 professional networking however, no user data will ever be mined or sold and users of the platform can vote on upgrades and proposals.

DSCVR – A fully-decentralized version of Reddit, where the users are owners. Over 50,000 users are already signed up and using this platform as their Web3 Reddit.

OpenChat – Real-time, decentralized messaging built on the Internet Computer. 50,000 users are using their single internet key to freely talk on the blockchain.

The amount of projects built and currently being built on the Internet Computer is unbelievable for its time released, which could only mean that developers are finding the Motoko to be a very friendly language. The NFT market on ICP is heating up as well, users are trading all of these new play-to-earn NFTs on Entrepot, the leading NFT marketplace for Internet Computer. In addition to this, the base layer of DeFi is currently being built similar to Ethereum. None of these projects have taken off yet, but we believe when the time is right that ICP will have a ‘DeFi Summer’ just like Ethereum did in 2020.

Internet Computer’s Growing Developer Community

The Internet Computer project aims to bridge the gap between decentralized and traditional web technologies by integrating with web2 services, fostering a growing developer community. This integration makes it easier for developers to transition from existing centralized systems to decentralized ones, creating a more secure and efficient digital landscape.

As the Internet Computer works towards seamless integration with web2 services, its adoption may increase, potentially impacting the Computer ICP price prediction positively. If the platform continues to gain traction and more developers join the ecosystem, it could be considered a good investment.

The developer community plays a vital role in the success of the Internet Computer. With the release of the source code and the Motoko programming language, developers have started building a diverse range of applications on the platform. The community’s enthusiasm and support are key to driving the Internet Computer’s adoption and innovation.

However, it is essential to remember that investment advice should not solely rely on a project’s potential or current performance. Factors such as market sentiment, competition, and regulatory changes should also be considered when evaluating the prospects of an investment in the Internet Computer.

Internet Computer (ICP) Token Supply and Tokenomics

Photo by the Dfinity Foundation

The Internet Computer (ICP) Token is the native utility token of Dfinity’s Internet Computer blockchain and has three key roles in the network:

  • Production of Cycles: Cycles power computation in the role of fuel that is burned when used. Cycles are pegged to the SDR (Special Drawing Rights), which is a logical currency unit defined by the International Monetary Fund. 1 SDR worth of ICP can be converted into one trillion Cycles to power computation.
  • Facilitating Network Governance: Users can earn economic rewards by locking their ICP tokens to create neurons, participating in network governance by voting on proposals.
  • Rewarding Participants: The network incentivizes users that play key roles (node operators, staking validators) in helping the network function by minting new ICP

Photo by Messari Research

Looking at the initial neuron allocations by Messari Reserach, we can see that there will be a total of 469,213,709 ICP tokens at Genesis. A neuron locks a balance of ICP utility tokens and enables its owner to participate in network governance, through which they can earn voting rewards. Here are the token allocations in no particular order:

  • Early contributors: 9.50%
  • Seed donations: 24.72%
  • Strategic: 7.00%
  • Pre-sale: 4.96%
  • Strategic partnerships: 3.79%
  • Community airdrop: 0.80%
  • Initial community and developer grants: 0.48%
  • Node operators: 0.22%
  • Internet Computer Association: 4.26%
  • Team members: 18.00%
  • Advisors and other third-party token holders: 2.40%
  • DFINITY Foundation: 23.86%

Between the vague Neuron IDs and the lack of transparency given by the Dfinity Foundation along the lines of token allocation to VCs and vesting periods, there has been a lot of backlash on Twitter regarding the nature of decentralization across the network. We believe that this allocation isn’t anything out of the ordinary and follows the proper tokenomics procedures of most of the industry. As venture capitalists sell out of their positions and retail starts scooping up coins at the low, the ICP pie will once again be shifted around and offer a little bit higher of a % slice to regular investors.

Internet Computer (ICP) Price Prediction

The Internet Computer’s tokenomics play a crucial role in the functioning and value of its native token, the Internet Computer Protocol (ICP). Understanding the tokenomics is essential for anyone looking to analyze the Internet Computer price or make price predictions. It’s important to remember that while price predictions can provide some insight, they are not guarantees, and one should always conduct their own research before making any investment decisions.

The Internet Computer network, built on the Internet Computer blockchain, is designed to host decentralized applications (dApps) and smart contracts. The ICP token is used to fuel the network’s operations, such as computation, storage, and governance.

Market capitalization is a critical factor in the tokenomics of the Internet Computer. It refers to the total value of all ICP tokens in circulation and is calculated by multiplying the current Internet Computer price by the circulating supply. A higher market capitalization indicates a higher demand for ICP tokens and can influence price predictions.

When it comes to Internet Computer price predictions and forecasts, various factors can impact the token’s value. These include the adoption of the Internet Computer network by developers and businesses, improvements in the underlying technology, and market sentiment towards cryptocurrencies in general.

Price analysts typically use historical data to predict potential future price movements. They may evaluate the average price of ICP tokens over specific time frames, the maximum price reached in the past, and the overall market trends. By considering these factors, they can make educated guesses about the Internet Computer price forecast. Our Internet Computer token analysis puts the ICP price way above the current market price as the presence of Internet Computer bullish signals, coupled with a stable market trend, could indicate potential growth and value appreciation for the ICP token in the near future. There’s no theoretical maximum price prediction, but our Internet Computer forecast is stating that the minimum value of the ICP protocol is $1 Billion, setting the minimum ICP price around $3 per token. Our Internet Computer price analysis is a bit different than the rest, as we encourage you to do your own research and come to your own ICP price prediction.

However, it’s essential to remember that price predictions can be influenced by unforeseen events, such as regulatory changes, market fluctuations, or technological breakthroughs. As such, any Internet Computer price prediction or forecast should be taken with a grain of salt and used as a reference point rather than a definitive guide.

Another aspect of the Internet Computer’s tokenomics is the governance of the network. ICP token holders can participate in the network’s governance by submitting proposals or voting on existing proposals. This democratic system allows the community to have a say in the development and direction of the platform, which can impact the overall value and perception of the Internet Computer and its native token.

The utility and use cases of the Internet Computer also play a significant role in its tokenomics. As more developers and businesses adopt the platform for creating dApps and smart contracts, the demand for ICP tokens may increase, positively impacting their price. Conversely, if the network fails to attract users or faces strong competition from other decentralized platforms, the demand for ICP tokens may decrease, leading to a decline in their value.

Internet Computer (ICP) Investment Risks

Investment opportunities and risks associated with the Internet Computer (ICP) are influenced by several factors. It’s essential to consider these elements when determining whether ICP is a good investment.

The average trading price of ICP coins can provide insight into the market’s sentiment and the token’s overall performance. Additionally, technical indicators such as the Relative Strength Index (RSI) and trading volume can help assess the momentum of the ICP market.

When considering the Internet Computer ICP price prediction, it’s crucial to take into account the latest ICP price predictions and forecasts available. Keep in mind that these predictions are not guarantees and should be used as a reference rather than a definitive guide.

The ICP price forecast may be influenced by factors such as the adoption and growth of the Internet Computer network, technological advancements, and overall trends in the crypto space. For instance, the platform’s unique features, such as chain key cryptography and the ability to reward network participants, could drive growth and demand for ICP coins.

However, investing in ICP coins also comes with risks. The crypto market is known for its volatility, and the current price of ICP may not necessarily reflect its minimum or maximum value in the future. Market fluctuations can lead to significant variations in the average price level, making it challenging to predict the future performance of the token accurately.

The Future of the Internet Computer

Overview of the Internet Computer Dashboard

As the Internet Computer continues to grow and mature, it has the potential to revolutionize the way we build and interact with software. With its unique features, scalability, and focus on security and privacy, the Internet Computer could become a critical part of the internet’s infrastructure, empowering developers and users alike.

The future of the Internet Computer depends on its ability to gain traction in the public internet and establish itself as a reliable platform for building and deploying decentralized applications (dApps) and smart contracts. As the platform gains more users, the demand for ICP coins may increase, positively impacting their value. However, competition from other platforms in the crypto space could affect the Internet Computer’s market share and the value of ICP coins.

Internet Computer has a community full of enthusiasts and entrepreneurs, who already play a crucial role in the network by controlling about 60% of the voting power. The partners at Black Mountain are excited for Internet Computer’s bright future and are in it for the long-term as we believe the project is still in its infancy and the proportion of voting power will slowly accrue to the community over time.

As always please do your own research and come to your own investment decisions, this information does not constitute as financial advice.

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