What Is Internet Computer Protocol and How to Buy ICP Token

Internet Computer Protocol aims to revolutionise how blockchains and dapps interact. Here’s how the popular ICP crypto token works.

Jun 06, 2024
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What Is Icp Kv

Key Takeaways:

  • The Internet Computer Protocol (ICP) aims to establish a revolutionary open and secure blockchain-based network that functions as a decentralised ‘World Computer’.
  • ICP stands out for its ability to host decentralised applications (dapps) entirely on-chain, including the frontend, backend, and data.
  • At the heart of ICP are its core components, including canister smart contracts, subnets, fault tolerance, asset certification, and Internet Identity.
  • The ICP crypto token plays a crucial role in the governance, development, and operation of Internet Computer Protocol.
  • Crypto.com offers a user-friendly platform to buy ICP tokens and engage with Internet Computer Protocol. 

What Is Internet Computer Protocol (ICP)?

The Internet Computer Protocol (ICP) aims to establish a revolutionary open and secure blockchain-based network that functions as a decentralised ‘World Computer’. At its core, ICP is designed to host programmes and data in the form of smart contracts, enabling the execution of computations in a secure and trustworthy manner while ensuring infinite scalability

This is achieved through the utilisation of canisters, which are smart contracts on Internet Computer Protocol that consist of WebAssembly bytecode and data storage. Canisters are hosted on subnets, which are independent blockchains running on globally distributed node machines. This architecture allows for fault tolerance and ensures the continued execution of smart contracts, even in the event of node failure or malicious attacks.

ICP stands out for its ability to host decentralised applications (dapps) entirely on-chain, including the frontend, backend, and data. This unique capability ensures that dapps inherit the security and decentralisation of the blockchain without compromising on speed or affordability. 

Additionally, ICP employs a tamper-proof asset certification system, where assets are accompanied by certificates signed by the entire subnet, ensuring the authenticity and correctness of responses, even when communicating with potentially malicious nodes. 

Moreover, ICP’s Internet Identity feature pioneers a more advanced and secure method of cryptographic authentication, providing users with a more convenient and privacy-protecting means of identity and authentication for applications on the platform.

How Does ICP Work?

At the heart of ICP are its core components, including canister smart contracts, subnets, fault tolerance, asset certification, and Internet Identity, each contributing to the network’s unique capabilities and operation.

Canisters: The Building Blocks

Canisters, also known as canister smart contracts, are the fundamental units of computation on ICP. These canisters contain WebAssembly (Wasm) programme code and data storage, enabling them to execute computations in a secure and fault-tolerant manner. Unlike traditional smart contracts, canisters can respect various mutability policies, including complete immutability, unilateral mutability, or governance-based mutability through a decentralised autonomous organisation (DAO).

Subnets and Fault Tolerance

Subnets are independent blockchains within ICP that host canister smart contracts. These subnets are constructed from node machines deployed across globally distributed data centers, ensuring fault tolerance and security. Even in the event of node failure or malicious attacks, the replication of storage and computation across all nodes within a subnet allow canister smart contracts to continue executing seamlessly, thus ensuring the network’s reliability and resilience.

Asset Certification and Internet Identity

ICP ensures the tamper-proof serving of assets through certification, where each asset is accompanied by a certificate signed by the entire subnet. This mechanism allows users to verify the authenticity of responses, even when communicating with potentially malicious nodes. Additionally, the Internet Identity feature provides a more advanced and secure method of cryptographic authentication, protecting user privacy and ensuring secure authentication for applications on the platform.

Scalability and Governance

ICP’s multi-subnet architecture enables seamless communication between smart contracts on different subnets, fostering collaboration and interoperability. Furthermore, the Network Nervous System (NNS) governs the network, orchestrating protocol upgrades and managing the tokenised DAO to ensure decentralised governance and network management.

ICP’s innovative design and advanced features position it as a pioneering force in the realm of dapps and blockchain technology, offering a secure, scalable, and fault-tolerant platform for hosting smart contracts and enabling the seamless execution of computations.

What Is the ICP Token Used For?

The ICP token plays a crucial role in the governance, development, and operation of Internet Computer Protocol, serving as a key element in the platform’s ecosystem:

  • Staking and Governance: ICP tokens can be staked, providing the holder with the right to vote and earn voting rewards within the Network Nervous System (NNS), which is a DAO that governs the ICP blockchain and allows participants to engage in stake-based governance through voting on proposals in a liquid democracy. This governance system covers various aspects of ICP, including its tokenomics, governance rules, node machine topology, and the software run on the node machines.
  • Utility for Developers: Developers use ICP tokens to purchase cycles, powering their dapps on the ICP platform. This utility enables developers to access the necessary resources for running and maintaining their dapps on the platform.
  • Participation in SNS Swaps: Investors can utilise ICP tokens to participate in Service Nervous System (SNS) swaps launched on ICP. These swaps represent the initial offerings of native DAOs on the platform.
  • Remuneration for Node Providers: Node providers are remunerated in ICP tokens for the compute power they contribute to the ICP platform. This facilitates the incentivisation of node providers to support the network’s operations.

Why Is ICP Valuable?

ICP is perceived to hold value due to its innovative features, functionalities, and advantages, which collectively contribute to the significance of the ICP token. Several key aspects make Internet Computer Protocol valuable within the blockchain ecosystem:

Scalability and Performance

ICP’s unique architecture facilitates near-native performance and scalability for smart contracts, enabling it to host compute- and storage-heavy applications entirely on-chain. Through the use of subnets, the platform shards smart contracts, allowing them to run parallel across multiple instances of the blockchain. This approach significantly enhances the platform’s scalability, with each subnet having its set of decentralised nodes, thus providing a higher level of performance and resource availability.

Security and Decentralisation

Prioritising security and decentralisation, ICP uses its innovative technologies like threshold signatures and chain key cryptography. For instance, the use of threshold cryptography ensures that the private key corresponding to each subnet’s fixed public key is never stored on a single node, enhancing the overall security of the network. Additionally, chain key cryptography orchestrates the nodes of the ICP network using multiple cryptographic protocols, allowing the network to run at web speed, thus ensuring the integrity and authenticity of the platform’s operations.

Utility for Developers

Developers benefit from ICP’s seamless and secure integration with existing ecosystems. Smart contracts on ICP can host web assets, serve HTTP requests, and interact with RPC nodes of other blockchains and Web2 servers, offering a more versatile and developer-friendly environment. Furthermore, the platform’s programming language, Motoko, simplifies the creation of dapps, empowering developers to leverage ICP’s features with ease.

Governance Mechanisms

ICP’s DAO community, known as the Network Nervous System (NNS), plays a critical role in governing the platform. Community members can participate in governance by staking ICP tokens and voting on proposals, ensuring that operational changes to ICP go through a democratic process. This decentralised governance approach promotes transparency and community involvement in the platform’s evolution.

How to Buy Internet Computer Protocol (ICP) With Crypto.com

Crypto.com offers a user-friendly platform to buy ICP tokens and engage with Internet Computer Protocol. 

Follow these steps to buy ICP on Crypto.com:

  • Complete the necessary verification process to unlock full access to the platform.
  • Deposit funds into the Crypto.com account; users can utilise fiat currency or other cryptocurrencies to fund their accounts.
  • Navigate to the ‘Buy’ section of the App and search for the ICP token.
  • Specify the amount of ICP tokens to acquire and review the transaction details.
  • Confirm the transaction and wait for the order to be executed.
  • Monitor the ICP token holdings in the Crypto.com App, which doubles as a wallet.

Crypto.com provides a secure and reliable trading environment, ensuring that users can trade ICP tokens with confidence. Take advantage of the platform’s intuitive interface, advanced trading features, and competitive fees to make the most of your Internet Computer Protocol token trading experience.

Conclusion

ICP’s innovative design and advanced capabilities have the potential to fundamentally transform the landscape of decentralised applications and blockchain technology. With its fault-tolerant architecture and ability to scale horizontally by creating new subnets, ICP can provide a platform for building mass-market Web3 services that run entirely on-chain, without the need for traditional IT infrastructure. 

This has significant implications for the future of web services, as it eliminates the reliance on centralised and insecure servers or cloud computing services, paving the way for a more secure and decentralised web environment. Furthermore, ICP’s unique features, such as chain key cryptography and the ability for smart contracts to directly interact with other blockchains, position it as a potential orchestrator that combines different blockchains in the Web3 environment, fostering collaboration, innovation, and interoperability.

Due Diligence and Do Your Own Research

All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, cybersecurity, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by Crypto.com to invest, buy, or sell any coins, tokens, or other crypto assets. Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation.

Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a crypto asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.

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