Web3 and blockchain technology are revolutionizing the world of finance and are fast becoming viable alternatives to traditional finance. As a result, the Web3 ecosystem comprises decentralized finance (DeFi) service providers.
These providers are developing solutions to solve problems associated with traditional finance, especially by eliminating intermediaries or central control. Their projects boost accessibility, making it easier for traders, investors and developers to collaborate and offer products and services to one another without limitations.
Internet Computer (ICP) is a blockchain-based decentralized network designedfor users who want to build decentralized applications (dApps), develop websites, and offer web-based services without third-party control. With a goal to revolutionize how the web works, ICP has been attracting investors so far, evident in its price growth in Q1 2024. But what is ICP, and what should you know before investing in the asset? Keep reading to find out.
Internet Computer price analysis
Coin Name Internet Computer Internet Computer Symbol ICP Internet Computer Price $12.79 Internet Computer Price Change 24h ▼ -4.70% Internet Computer Price Change 7d ▼ -13.57% Internet Computer Market Cap $5,927,039,685 Circulating Supply 463,259,890 ICP
As of March 2024, Internet Computer coin is trading at around $12.79, up over 200% compared to the March 2023 ICP price. The upward trend in ICP’s value primarily stems from the bullish trend in the broader crypto market as of Q1 2024.
During this period, the market’s “Fear and Greed Index” is over 80%, indicating extreme greed and a strong buy sentiment among investors. As a result, top cryptocurrencies such asBitcoin and Ethereum have experienced significant price growth in 2024, which extends into the last month of Q1.
For context, between February and March 2024, Bitcoin’s price increased by over 30%, and Ethereum’s went up by over 15%. Altcoins such asICP have also experienced similar growth in value, and a further analysis of the token’s price since it began trading in 2020 shows its steady growth in value and use cases:
- 2021: Although the DFINITY Foundation released ICP as an airdrop to its network participants in 2020, it didn’t launch the ICP mainnet blockchain and token until 2021. The ICP price at launch was reported to be around $700, and it attained an all-time high value of about $750 in the same year.
- 2022: After its impressive price trends in 2021, ICP experienced market volatility, and its price dipped to under $15 at the beginning of 2022. After further price decline during the year, ICP reached new lows of just over $3.
- 2023: ICP started 2023 with the same downward trend from 2022. The coin dipped to an all-time low price of $2.8 in September 2023, but has steadily risen since then. As of Q4 2023, the coin was trading at around $15 per token, up over 400% between September and December 2023.
In early 2024, ICP’s price growth continued, reaching approximately $19 per token in March 2024. Although the ICP price at the time of writing is about 97% below the token’s 2021 all-time high price of about $750, it has shown consistent price growth between Q3 2023 and Q1 2024.
Factors influencing Internet Computer’s price
Like other cryptocurrencies, the crypto market’s volatility is a significant influencer of the price of Internet Computer crypto. As seen in its historical price movement, the 2022 bearish market took the ICP price to new lows, but the bullish sentiment in Q1 2024 has positively impacted the coin’s value.
Other factors, including technological advancements, market competition, and adoption by developers and users, also influence ICP’s value. The Internet Computer Protocol leverages advanced technologies that enable decentralized and efficient execution of web3 applications and smart contracts.
However, it exists in an ocean of blockchain platforms, including Ethereum and Solana, solving similar decentralization issues for investors and developers. Without broader adoption among these users, ICP may struggle in the crypto market.
Moreover, external factors such asmarket trends, investor sentiment and regulatory developments in the crypto market can considerably affect the value of ICP. For instance, a large number of investors seeking DeFi tokens can increase ICP’s demand and value. Favorable crypto regulations can equally boost investor confidence and the token’s demand.
What is Internet Computer?
As the name implies, Internet Computer is a blockchain protocol designed to build an internet for Web3 users. The decentralized platform aims to transform how smart contracts work by executing them at a faster speed than on other blockchains.
ICP is a cloud platform hosting decentralized applications (dApps) on a distributed network that is more secure, reliable and affordable than traditional cloud computing platforms. It allows developers to process and store data efficiently. Unlike networks such asEthereum, ICP blockchain offers direct integration with the Bitcoin network.
So, it enables smart contracts for holding, sending and receiving BTC without third-party blockchains. It is also scalable and can handle millions of transactions per second. The Internet Computer Protocol has its native utility token called ICP. So, what are ICPs used for in the Internet Computer ecosystem? The token compensates the ecosystem’s nodes, rewards participants for their engagement, and aids governance participation.
How does Internet Computer work?
Usually, centralized websites and applications are hosted on third-party servers across various data centers. For instance, big tech firms such asGoogle and Facebook host various Web2 projects and developers.
However, the tech firms’ operational systems limit developers’ control over their data. ICP aims to solve this issue.Decentralized computing blockchain ICP supports complete decentralization and allows developers to create dApps and build online services on its blockchain.
These users do not need to use traditional cloud computing services that are centralized, less secure and more expensive. Instead, they can build a smart contract software called ‘canister’ to interact with the ICP network and other blockchains without intermediaries.
Chain key cryptography ICP uses unique chain key cryptography to facilitate the creation of public chain keys, which enable the connected devices to create public chain keys that can verify messages across their networks. For instance, the devices can verify the authenticity of the information from the Internet Computer blockchain using a single public key.
Subnet blockchainsInternet Computer controls its network using a master subnet blockchain called the Network Nervous System (NNS) and multiple subnet blockchains to boost its scalability and transaction speed. The subnet chains are independent blockchains on the network that connect to strengthen their collective capacity. Applications on ICP can securely communicate with its subnet blockchains, making transactions more efficient.
Who created Internet Computer?
DFINITY is the company behind the Internet Computer project. The Swiss-based company was founded by Dominic Williams in 2015 and launched ICP in 2021. DFINITY launched the ICP protocol to address the centralization issues prevalent in the traditional internet and computing ecosystem.
As a result, it created the Internet Computer Protocol to decentralize the global internet and computing system. The blockchain allows independent data centers worldwide to connect for transactions, DeFi services and web/app development.
To achieve its goal, the Internet Computer system ditched the popular proof-of-work and proof-of-stake consensus mechanisms for its proprietary chain key system that facilitates blockchain transactions without intermediaries.
Internet Computer market performance
As of March 2024, Internet Computer crypto is trading at around $19 per ICP token, with a market capitalization of over $8bn. Due to its relatively high market cap, the ICP coin is among the top trading cryptocurrencies by market cap, sitting at position 18 as of late March 2024.
Compared to major contenders in the DeFi space, ICP ranks lower in terms of market cap. For instance, while ICP’s market cap stood at over $8bn, Ethereum had a market cap of over $400bn as of March 2024.
Solana, a layer-1 blockchain like Internet Computer, also had a higher market cap of over $80bn during the same period. However, ICP has been attracting investors in 2024, with a 200%+ price increase compared to its March 2023 price at the time of writing. ICP’s price increase results from the network’s growing popularity as a full-stack multipurpose software.
How to buy and store Internet Computer
As of March 2024, the only place to buy ICP tokens is a centralized exchange. The coin is available on notable CEXs, including Binance, Coinbase and OKX. You can buy ICP on any of these exchanges by followingthe steps below:
- Step 1: Choose a reputable crypto exchange and create a new trading account.
- Step 2: Complete identity verification (KYC) if required.
- Step 3: Deposit funds using the supported payment methods.
- Step 4: Search for ICP in the exchange platform’s markets and buy the desired quantity.
- Step 5: Transfer the ICP tokens to an external crypto wallet.
You can also stake the asset for passive income via Binance staking or the Network Nervous System (NNS) DAO controlling the ICP blockchain. However, transferring your ICP coins from an exchange wallet to a self-custodial wallet mitigates the risk of fund loss due to exchange security hacks.
You’ll find diverse hot/software crypto wallets such asMetaMask or Trust Wallet to store your ICP coins or cold/hardware wallets such asLedger and Trezor for offline asset custody. Choosing the right option depends on your preference. So, do your research and select the option that best suits your needs.
Risks and challenges
Investors may find ICP attractive because of its ability to host any application, including dApps, smart contract applications and tokenized internet websites. The coin’s price growth may also interest investors looking to diversify their portfolios.
However, there are risks to understand before investing in ICP. First, ICP is subject to the prevalent price volatility in the crypto market. As seen in its price history above, the coin has had periods of significant gains and losses. Therefore, it’s crucial to hedge against risks by diversifying your portfolio and leveraging stop-loss orders.
Another notable challenge of investing in ICP is its presence in a saturated market. Despite its innovative approach to blockchain computing, competitor blockchains, including Polygon, Solana and Ethereum, can implement future developments similar to Internet Computer’s offerings. Asthese blockchains are relatively more prominent in terms of popularity, such developments may hinder ICP’s broader adoption, resulting in potential loss of value.
Regulatory and legal aspects of Internet Computer
The crypto market’s regulatory landscape is still uncertain, and new regulations can impact market conditions positively or otherwise. As a result, the market value and potential of cryptocurrencies such asICP remain subject to some amount of uncertainty.
For instance, in June 2023, the US Securities and Exchange Commission (SEC) released a complaint that ICP was an unregistered security and shouldn’t be listed on Coinbase. The news of the SEC allegation had a considerable effect on the cost of ICP at the time.
Moreover, newer regulatory frameworks, including data privacy laws, cybersecurity concerns and other legal challenges, can significantly impact ICP’s price and future. Staying updated with the latest trends within the ICP ecosystem and the broader crypto is paramount to managing investment risks.
Comparing Internet Computer to other cryptocurrencies
ICP operates in a market with alternative blockchains and competitors. Below, we compare Internet Computer with notable DeFi blockchains to see their pros and cons.
Internet Computer vs Ethereum
Both Ethereum and ICP have decentralized networks for developers to run computing applications. However, while Ethereum uses smart contracts for its codes and transactions, ICP uses canisters, which are more scalable. Nonetheless, Ethereum is the leading blockchain for developers, and it hasa larger market cap of over $400bn compared to ICP’s $8bn as of March 2024.
Internet Computer vs Solana
Internet Computer and Solana are layer-1 blockchains built to improve network scalability on supported blockchains. However, ICP is more scalable and can execute up to a million instructions per second, whereasSolana is limited to only 65,000 transactions per second.
Still, Solana has a more extensive ecosystem supporting meme coins, AI tokens and over 400 dApps at the time of writing. Its token value is also trading at around $190 compared to ICP’s approximately $19 as of March 2024.
Internet Computer vs Polygon
Polygon (MATIC) and Internet Computer were created to provide decentralized services to cryptocurrency traders and developers. Both platforms support dApps and blockchain transactions.
However, ICP is used for relatively fewer transactions than Polygon due to its lower adoption among traders and developers. Nonetheless, ICP is more decentralized and trustworthy. It is also more scalable due to its unique canisters used to facilitate transactions.
FAQs
How much is 1 ICP token worth?
As of March 2024, ICP trades at around $19 per token. The coin’s price is over 50% compared to its February 2024 price, providing investors with a low-cost alternative to popular cryptocurrencies such asBitcoin and Ethereum.
How much will ICP be in 2025?
The Internet Computer price predictions among market analysts are optimistic due to the project’s significant price growth in 2024. In 2025, the coin is projected to reach a minimum price of around $31 and a maximum value of approximately $40.
Is ICP built on Ethereum?
Although Internet Computer has similar features to Ethereum, including smart contracts and crypto staking, it doesn’t operate on the Ethereum network. Instead, it has its native Internet Computer Protocol for creating dApps and running decentralized computing.