It happened a few weeks ago, even though it seems further back. A new cryptocurrency few had heard about forced its way into Coinmarketcap’s Top10 in record time. In the middle of an overcrowded bull market, Internet Computer (ICP) was the talk of the town for a few days. The coin debuted with listings in most of the major cryptocurrency exchanges, which in retrospect is a little suspect.
The thing that stands out about the Internet Computer is that the project sounds solid. Ethereum killers come and go, but the Dfinity Foundation’s contender is more ambitious than all of them combined. This isn’t your typical smart contracts platform. The Internet Computer aim is no other than to replace the whole Internet as we know it. A new Internet, just like in that “Silicon Valley” show.
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The Foundation knows how to sell the Internet Computer
In Bitcoinist’s first report on the subject, we described it as:
Dfinity’s platform could be defined as a project to expand internet access, eliminate the “monopoly” enforced by big tech, and offer developers, users, enterprises, and governments a mechanism to deploy “software and services directly to the public internet”. Messari adds:
“It aims to not only reduce platform risk but also reduce complexity in building and maintaining systems. This would also accelerate the time it takes developers to launch a new product.”
But, as we should know by now, if something seems too good to be true, it probably is. There were several concerning signs in the whole Internet Computer story. Huge names backed the project and huge exchanges immediately accepted it. And, as the Foundation informs through a Medium post, they presented a part of the project in the mere center of centralization:
Bronze, the second release milestone, was unveiled in January at the 2020 World Economic Forum in Davos, where DFINITY demonstrated a desktop-based social network for professional profiles called LinkedUp (an open version of LinkedIn) that ran on the Internet Computer.
And that leads us to Coin Bureau’s complete breakdown of the Internet Computer.
11 Things We Learned From The Complete Breakdown
You’ll need an Internet Identity to operate in the network. That means, “you’ll have a single identity that’s tied to everything you do.” And their plan is to substitute the whole Internet.
The Network Nervous System (NNS) manages the Internet Computer’s architecture. It makes decisions at Data Center levels, at node levels, at the subnet level, and even at the user level. The NNS can even “make changes to the economics of the ICP token.”
You have to stake ICP to get to vote on governance issues. The longer your lock your coins, the more “voting power” you get. The voting process grants holders rewards in ICP.
Everyone who purchased tokens in the initial private and public sales had to complete KYC procedures and create an Internet Identity to receive Internet Computer’s tokens.
The Dfinity Foundation hopes that The ICP will become “a viable alternative to the regular Internet we use today” in 10 years. Then, it plans to completely take over.
They’re developing Endorphin, a free and open operative system for mobile phones. However, to use it you’ll need an Internet Identity and all of its updates will be governed by the NNS.
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This Is Where It Gets Interesting
The project’s code is not open source. The Dfinity Foundation holds all the power. Using just those two facts, we can infer the effects that the Internet Identity will have on privacy
Since the longer you stake, the more voting power you get, The Dfinity Foundation will have “total control” over the network forever. They don’t get more than half of the existing coins, but they have a clear incentive to stake and a direct advantage over everyone else.
The NNS seems to be a single point of failure. It runs on a dedicated subnet. The full extent of its power over the Internet Computer is not entirely clear.
In a 2018 interview, Dominic Williams, the creator, said that the project aims to comply with the law of each country it operates in. The Coin Bureau asks: “How is this possible for a protocol that is supposed to have open governance and decentralization? That doesn’t sound at all like a cyptocurrency to me.”
The project aims to substitute the whole Internet. Fine. But it’s far from permissionless. It seems like it also wants to achieve, “A total consolidation of control.”
ICP price chart on HitBTC | Source: ICP/USDT on TradingView.com
Conclusions About The Internet Computer
Even though Coin Bureau’s analysis puts things in perspective and explains a lot, the Internet Computer remains an interesting project. This case requires further investigation and that’s what Bitcoinist is going to give you. The Dfinity Foundation deserves the right of reply and, to the best of our ability, we’re going to give it to them.
UPDATE 05/25 – Here it is, the right of reply.
Featured Image by Lars Kienle on Unsplash – Charts by TradingView