I consistently see this question come up in forums online, so it is time to give the definitive answer. Of course, this article would read more like an eBook if I tried to provide all the details here. The fact is that Dfinity Community has answered this question and many related ones over the past half a year. Thus, today, you will see a shorthand answer to some of the most common questions regarding ICP and links to articles on our site, all compiled in one convenient place.
Is Internet Computer a Good Investment?
Before you run out and buy ICP, you need to do your research and determine if this is a good investment for you. I’m not an investment advisor of any kind, but here are a few of the reasons why I have invested in ICP:
1) The Internet Computer is disruptive technology. It is gearing up to go head-to-head with the likes of AWS, GCS, and Microsoft Azure to offer true Web 3 and decentralization.
2) Gas-free transactions – From sending crypto to trading NFTs, the set transaction fee of .0001 ICP (currently a fraction of a penny) makes ICP a very attractive option in a world of expensive gas fees.
3) Bitcoin and Ethereum Integration – Voters recently approved Bitcoin integration, which means the Internet Computer will be bringing smart contracts to the Bitcoin blockchain. Plus, Terabithia is a new bridge that enables cross-chain communication between the Internet Computer and Ethereum.
4) It’s more eco-friendly than Bitcoin and many other mainstream cryptocurrency blockchains.
There could be a very bullish future for ICP holders for these and many other reasons.
Some Internet Computer Basics
What Is the DFINITY Foundation?
To get a little more background on ICP, you will also want to be familiar with the DFINITY Foundation. This not-for-profit organization is based in Switzerland, supporting the development of the technology building the Internet Computer ecosystem and blockchain. Dominic Williams founded DFINITY in October 2016. It has three research centers located worldwide and over 200 team members. You can learn more on the DFINITY website.
Essential Internet Computer Vocabulary
If you have ever spoken with an Internet Computer enthusiast, it may seem like they were speaking another language. But once you know some essential vocabulary, things start to make more sense.
· The Network Nervous System (NNS) – The governing system of the Internet Computer that allows for proposals and voting.
· Canisters – These are the storage units that allow for transactions on the Internet Computer. Canisters on the Internet Computer store proposals, configurations, ICP, NFTs, dApps, and the like.
· Cycles – This is a network token used to execute canister functions. They serve the function that gas does on other blockchains. It’s just more efficient.
· Nodes– Nodes are how the Internet Computer scales. They are hardware devices that perform all the necessary computations for the ecosystem.
· Motoko – This is the programming language of the Internet Computer.
Where Can I Buy Internet Computer Cryptocurrency (ICP)?
You will have to use a cryptocurrency exchange. Check out this article for a few examples of exchanges where you can buy ICP. The short version is that most people will be using Binance or Coinbase (especially in areas that don’t allow Binance). Once you buy on the exchange, you will want to move your money to a crypto wallet. The two most popular wallets for use with ICP are Stoic and Plug.
Where Can I Store my ICP?
Like other cryptocurrencies, ICP can be stored in hot wallets like the Network Nervous System, Stoic, Plug, etc., or hardware ones.
Can I Stake ICP?
The short answer is yes! Staking occurs on the NNS. It earns you rewards depending on the length of your stake and gives you voting rights in the ecosystem. You can learn how to stake your ICP tokens here. It’s the article I used to stake my first neuron.
How the Internet Computer Works
The Internet Computer is an open-source Layer 1 blockchain. Anyone can create dApps that run on the Internet Computer. Projects can also apply to the DFINITY Foundation for grants to fund their projects. Grants are provided depending on how much a project will benefit the ecosystem as a whole, both in the short and long term.
Canisters on the Internet Computer are the building block of the Internet Computer Ecosystem. Node providers are publicly known and rewarded with ICP in exchange for providing the necessary processing power. These nodes are dedicated hardware and do not run on AWS or other centralized cloud services like Ethereum nodes. This makes the Internet Computer the definition of Web 3 – the open internet where anyone can build and host their own online services without depending on a centralized tech company.
The Internet Computer is the source of the most underrated disruptive blockchain technology in the tech world. There are many exciting things to look forward to for the Internet Computer in 2022, so we're glad you've decided to join us on this incredible journey! Plus, integration with Ethereum and Bitcoin as well as the highly anticipated game-fi and de-fi ought to give ICP a significant boost.
- Disclaimer: NOT FINANCIAL ADVICE
The information and opinions provided by the DFINITY Community should not be understood or construed as financial advice. We are not attorneys, accountants, financial advisors, or fiduciaries. Our speculations and suggestions are not a substitute for financial advise from a professional who is aware of your individual circumstances.
We do our best to provide accurate and valuable information and informed opinions. We also expressly recommend that you seek advice from professionals and will not be held responsible for any consequences of your investment decisions.