• Sat. Jun 22nd, 2024

How did “Internet Computer Coin”(ICP) Become A Top-5 Crypto?

On May 10, traders valued the Internet Computer (ICP) token at around $630 during its debut on Coinbase. The crypto cropped up seemingly unannounced and immediately found a place with the top dogs of crypto. Dollar bids for the token increased exponentially to reach highs of around $3,093 on Binance on May 11. Meanwhile, HitBTC recorded the ICP token price at a peak of nearly $407.

The massive difference in ICP rates across these crypto exchanges reached $2,500 at some point. Analysts say that this difference represents a berserk trading sentiment that is dominant in the Internet Computer market. What happened in this market is not any form of a fluke. The ICP token promises its users a widely convenient blockchain experience.

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This volatility and price action has landed ICP in the list of the top-10 cryptos by market capitalization. It has even exceeded some veterans like Bitcoin Cash (BCH), Litecoin (LTC), and Chainlink (LINK).

At some point, the coin surged to as high as the fourth spot before receding to occupy the eighth spot currently. Massive price corrections and profit-taking sentiments were responsible for the correction in the price of this token.

ICP 1-hour candle close across multiple crypto exchanges. Source: TradingView
ICP 1-hour candle close across multiple crypto exchanges. Source: TradingView

On May 12, the ICP/USD exchange rate on Coinbase and Binance was about $338 while on HitBTC it was $14 higher. Since then, the Internet Computer token has been consolidating between $310 and $320.

What Is The Internet Computer Protocol (ICP)?

Dfinity aims to set up a blockchain-based network, one in which the internet supports a lot of software applications instead of the cloud hosting providers. Its Internet Computer protocol allegedly proposes to host various online services, like social media, messaging, peer-to-peer digital interactions, storage, and search, atop its public Web3.0 cloud-like computing protocol.

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It aims at relying more on large data centers and the high-end node machines, validators, with a capacity that is much bigger than that provided by the leading Ethereum blockchain. Generally, Dfinity hopes that it will offer the first actual global blockchain network that works at the maximum web speed with unlimited scaling features that support huge volumes of smart contracts computation.

Mira Christanto, a renowned researcher at Messari crypto analytics platform, mentioned:

“If the IC succeeds at replacing legacy IT, there would be no need for centralized DNS services, anti-virus, firewalls, database systems, cloud services, and VPNs either.”

Dfinity has proposed large-scale decentralization by introducing a unique consensus model called Threshold Relay. This consensus model is enhanced with Dfinity’s Blockchain Nervous System to create strong algorithmic governance systems.

Meanwhile, the ICP token serves as a native asset to the Internet Computer. Its primary role in the platform includes staking that lets users participate in the Blockchain Nervous System. It also offers security deposits that enable various private entities like cloud networks and client software to link up with the Internet Computer’s public network.

Notably, the Internet Computer is charting new territory when empowering its users with the ability to integrate and coordinate blockchain projects and manage data at high speeds.

Why Did ICP Rally?

The abrupt arrival of ICP among the top-ten cryptos caught many analysts, commentators, and traders by surprise. A quick review of this token’s issuing authority, Internet Computer, termed it as a “blockchain-based cloud computing project” that wants to develop an open, public network.

However, the biggest takeaway for the traders was the involvement of high-profile institutional investors in this project. One notable investor was the US-based angel investor Andreessen Horowitz who is known for backing Twitter at its early developmental stages.

Another investor in this project is a crypto-focused hedge fund in New York that is led by Olaf Carlson-Wee, Polychain Capital. Olaf previously worked as the head of risk at Coinbase.

Meanwhile, the ICP token quickly gained listing on top cryptocurrency exchanges moments after its launch on May 7, 2021. It portrayed a carefully structured strategy put together by the Zurich-based nonprofit backing Internet Computer, Dfinity. These factors cumulatively landed the ICP tokes within the conscience of the retail and daily crypto traders.


Growth Prospects For ICP

Dfinity raised around $163 million previously through several private funding rounds. At the same time, the non-profit organization also got $4.1 million in Ether (ETH) and Bitcoin (BTC) back in February 2017.

In May 2018 it airdropped $35M worth of ICP tokens, previously known as DFN, among its early supporters. That airdrop represented around 0.8% of the initial ICP supply. The participants in this airdrop received the IOU versions of their ICP funds in September 2020. They managed to transfer the coins back to Internet Computer Protocol (ICP) on May 10, just a day before the token debuted on Coinbase.

ICP crashes by 89% after its bid crossed $3,000 on Binance. Source: TradingView
ICP crashes by 89% after its bid crossed $3,000 on Binance. Source: TradingView

Dfinity now wants to expand its network of developers and data centers. For now, the non-profit is running seven subnets with 68 nodes across 12 independent data centers. The aim is to have reached 123 data centers with the ability to host 4,300 nodes by the end of 2021.

Just like Bitcoin and Ethereum blockchains, the prospects of infrastructural growth in the Internet Computer network may enable speculators to raise their long-term bids on the different ICP-enabled pairs. It might even get a major boost as the investors continue seeking protection against their worries of macroeconomic inflation.

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Kevin Moore - E-Crypto News Editor

Kevin Moore - E-Crypto News Editor

Kevin Moore is the main author and editor for E-Crypto News.