Internet Computer Review: Updates You Don't Want To Miss!

Over the past few years, artificial intelligence (AI) has moved from being a buzzword to becoming central to modern technology. It has revolutionized industries with its ability to process vast amounts of data, learn from patterns, and make decisions with minimal human intervention.

From enhancing medical diagnostics to automating complex manufacturing processes, AI is the driving force behind innovation and efficiency across the globe. However, traditional AI systems face significant challenges, such as data privacy concerns, lack of transparency and susceptibility to tampering. These issues highlight the need for a more secure, transparent and decentralized approach to AI deployment and execution.

Enter the Internet Computer, which aims to address these challenges by leveraging the power of blockchain and smart contracts.

The Internet Computer review delves into the fundamental components of ICP, starting with its decentralized and tamper-resistant environment for AI models. We will discuss how its high-performance smart contracts provide an efficient and transparent platform for running complex applications. The scalability of ICP is explored through its subnet architecture and asynchronous messaging system, which ensures efficient and secure execution of smart contracts.

In addition, the ICP review covers its integration with major blockchain networks like Bitcoin and Ethereum, and the role of its native ICP token in governance, resource allocation and ecosystem participation is detailed.

Internet Computer Review Summary

The Internet Computer Protocol (ICP) is designed to overcome traditional AI's challenges by offering a decentralized, secure and transparent platform for running AI models and other applications. It leverages high-performance smart contracts, scalability and seamless integration with major blockchain networks to enhance functionality and user experience.

The Key Features of Internet Computer Are:

• Decentralized and Tamper-Resistant Environment
• High-Performance Smart Contracts
• Reverse Gas Model
• Scalable Subnet Architecture
• Interoperability with Major Blockchains
• Governance and Resource Allocation

If this piques your interest, you might want to check out our picks for the best AI-crypto projects. In addition, we also have an article where we discuss blockchain technology and AI's potential impact on various industries.

What is Internet Computer?

The Internet Computer Protocol offers a solution to the challenges of traditional AI. It offers a decentralized approach that leverages the power of smart contracts.

Here's how ICP addresses these issues:

• Decentralization and Integrity: ICP's vision of replacing traditional software with smart contracts aligns with the goal of decentralizing AI. By running AI models as smart contracts on the ICP blockchain, the tampering problem can be mitigated. Smart contracts on ICP benefit from high performance, allowing them to utilize significant computational resources while ensuring the integrity of their execution. Unlike traditional AI systems vulnerable to tampering, smart contracts on ICP provide a transparent and tamper-resistant environment for running AI algorithms.
• Transparency and Accountability: The decentralized nature of ICP addresses the black box problem by providing transparency into how AI models operate. Users can interact with AI smart contracts directly through a browser interface, eliminating the need for specialized software or intermediary platforms. This transparency enables users to understand how their data is used and how AI decisions are made, fostering trust in the technology. Additionally, developers have the flexibility to write smart contracts using familiar languages like Rust, TypeScript, or Python, making it easier to audit and understand the underlying code.

In addition, ICP offers several key features that make it well-suited for decentralized AI:

• High-performance smart contracts: Smart contracts on ICP can utilize significant computational resources, enabling the deployment of complex AI models with unprecedented speed and efficiency.
• Low cost and resource efficiency: ICP is designed to be cost-effective and environmentally friendly, making it accessible for a wide range of applications, including AI.
• State-of-the-art user experience: Users can interact with AI smart contracts using just a browser, simplifying the user experience and removing barriers to adoption.
• Interoperability: ICP can interface with other smart contract blockchains and traditional web resources, facilitating seamless integration with existing AI ecosystems and data sources.
• Developer-friendly: Developers can write smart contracts using popular languages and incorporate libraries from their respective ecosystems, making it easier to build and deploy AI applications on ICP.

The Internet Computer aspires to evolve into a “World Computer” offering an open and secure public blockchain network accessible to everyone for hosting their smart contracts securely.

The DFINITY Foundation is a major contributor to the Internet Computer blockchain.

What Makes ICP Smart Contracts So Special?

In the context of ICP, smart contracts are referred to as "canisters."

Canisters are computational units within ICP that combine code and data. They are versatile, and capable of performing various tasks, from serving web pages to implementing complex applications like secure messaging apps or decentralized token exchanges.

Canisters represent a significant advancement from traditional smart contracts, offering enhanced capabilities and versatility. They ensure tamper-proof execution, where modifications to their state are exclusively facilitated through on-chain messages. This process guarantees auditable and cryptographically verified states, fostering trust and security within the system.

In the realm of computational models, canisters exhibit similarities to actors within the actor model of computation. Responding to messages, canisters dynamically modify their private state, communicate with other canisters by sending messages, and even generate additional canisters as needed. This inherent concurrency feature effectively addresses scalability challenges often encountered in conventional smart contract platforms, enabling efficient and flexible execution.

Moreover, in terms of behaviour, canisters operate akin to operating system processes. ICP orchestrates their execution, while canisters maintain states resembling how operating systems manage processes. Although canisters cannot directly alter certain aspects of their state, such as cycle balance, ICP furnishes essential APIs for functions like payments and messaging, ensuring seamless operation and interaction within the ecosystem.

Implemented as WebAssembly modules, canisters offer unparalleled interoperability, allowing developers to write them in various languages compatible with WebAssembly. This approach facilitates integration with existing systems and frameworks, enhancing development flexibility and accessibility. Furthermore, canisters' memory employs orthogonal persistence, transparently storing data across executions and ensuring its continuous availability, thereby optimizing resource utilization and user experience.

Internet Computer Architecture

The Internet Computer represents a revolutionary approach to blockchain-based platforms, aiming to securely host and execute smart contracts at scale. Its architecture is a departure from traditional blockchain protocols, integrating lessons learned from past projects to address scalability concerns.

Resource Management with Cycles

Canisters utilize cycles, acquired with the ICP utility token, to pay for the resources they consume. This approach shifts the burden of transaction fees away from end-users, adhering to a "reverse gas" model. With this model, canisters can efficiently manage resources and execute complex tasks without imposing additional costs on users.

Subnets

The IC's scalability and efficiency are facilitated by its subnet-based architecture. Subnetworks, or subnets, operate independently and concurrently, each hosting a set of canisters. With nodes replicating all canisters, states, and computations within a subnet, the IC achieves a secure and fault-tolerant environment. New subnets can be created dynamically to scale out the protocol, ensuring limitless scalability.

Asynchronous Messaging and Loose Coupling

Canisters communicate through asynchronous messaging, allowing for loose coupling between different canisters and subnets. This asynchronous communication model, combined with isolated canister states, enables concurrent execution and scalability. In contrast to synchronous communication in most blockchains, this approach is pivotal in achieving unprecedented scalability while ensuring security and fault tolerance.

Core Internet Computer Protocol

Each subnet is driven by the core Internet Computer Protocol, comprising layers such as peer-to-peer, consensus, message routing, and execution. This protocol operates on all nodes within a subnet, driving consensus and message execution independently. Chain-key and chain-evolution technologies underpin various aspects of the protocol, ensuring decentralized operation and long-term sustainability.

The Core Internet Computer Protocol

The Internet Computer Protocol (ICP) underpins the operation of the Internet Computer, from which its utility token, the ICP token, derives its name. The core IC protocol is a multi-layered architecture running on nodes within each subnet. This protocol enables the creation of blockchain-based replicated state machines, which make progress independently across subnets while maintaining asynchronous communication.

The core IC protocol consists of four layers:

• Peer-to-peer: Handles communication between nodes and facilitates message exchange.
• Consensus: Establishes agreement on the ordering and selection of incoming messages, providing them in block format to the upper layers.
• Message routing: Receives ordered messages from the consensus layer and routes them for execution.
• Execution: Executes messages in a deterministic manner on every node within the subnet, ensuring consistency in state transitions.

We'll now explore these in detail.

Peer to peer

The peer-to-peer layer is like the system that helps computers talk to each other.

When you want to send something to another computer on the network, like a message or a request for information, the peer-to-peer layer helps make sure it gets there reliably and securely. It does this by using something called a gossip protocol, where each computer shares what it knows with a few other computers nearby, and those computers share it with more, until eventually, everyone has the information they need.

To make sure the network doesn't get overwhelmed with too much information, each computer doesn't send the actual message to everyone. Instead, it sends a small message called an "advert" to just a few other computers, telling them what the message is about. Then, if another computer needs that message, it can ask one of the computers that got the advert for it.

Also, some messages are more important than others, so the peer-to-peer layer makes sure those important messages get sent out quickly, while less important ones might take a bit longer.

Lastly, to keep everything safe, computers in the network only talk to other computers that belong to the same group, which is managed by a special system called the Network Nervous System. This helps prevent bad actors from causing trouble.

Consensus

The Consensus layer of the Internet Computer is like the referee in a game, making sure all the players agree on what's happening and when.

Here's how it works:

• Round Setup: Each subnet, which is like a group of computers in the Internet Computer network, has its own game to play. In each round, these computers, called nodes, work together to agree on the next set of actions, like which messages to process.
• Block Making: Imagine one node as the team captain. This node gathers all the messages from the previous round and proposes a plan for the next round, which is called a "block." The plan is then shared with all the other nodes.
• Notarization: Once the other nodes get the plan, they check it to make sure it's valid. If it looks good, they give it a stamp of approval called "notarization." For the plan to move forward, at least two-thirds of the nodes need to agree.
• Finalization: After a plan gets enough stamps of approval, it's considered "finalized." This means everyone agrees it's the right plan, and it's time to move on to the next round.

To make sure everything runs smoothly, the system has a few tricks up its sleeves:

• Random Beacon: To decide who gets to be the team captain for each round, the system uses a random number generator called a "random beacon." This ensures fairness and prevents anyone from cheating.
• Fault Tolerance: Even if some nodes are slow or make mistakes, the system keeps going. As long as most of the nodes are honest and agree, the game can continue without interruption.
• Message Prioritization: Some messages are more important than others, so the system makes sure those get processed first. This helps keep things moving efficiently.

Message Routing

Message Routing is like the postal service of the Internet Computer, making sure messages are delivered accurately and efficiently between canisters (smart contracts), even across different parts of the network. It's a crucial component that ensures the smooth operation and synchronization of the entire system.

It's responsible for several key tasks:

• Induction: Processing messages received from the Consensus layer and preparing them for execution.
• Execution Invocation: Triggering the Execution layer to process the messages.
• Routing: Directing messages between canisters within and across subnets.
• State Certification: Ensuring the accuracy of the subnet's state.
• State Synchronization: Assisting nodes in staying updated by syncing their state with the latest subnet state.

Messages are processed by extracting them from blocks received from Consensus and queuing them up for execution. The Execution layer then schedules and executes these messages in a deterministic manner, meaning the same actions are taken on every node of the subnet. Messages can modify the state of canisters and create new messages for other canisters, either within the same subnet or across different subnets.

Execution

The Execution layer is like the conductor of an orchestra, coordinating the actions of all the parts to create harmony.

Here's what it does in simple terms:

• Running Canister Programs: Imagine each smart contract (canister) as a little program running on the Internet Computer. The Execution layer is responsible for running these programs. It makes sure they run correctly and don't interfere with each other.
• Keeping Things Consistent: Just like everyone in a dance class needs to do the same steps at the same time, the Execution layer ensures that all the copies of a smart contract running on different computers reach the same state after processing the same messages. This makes sure the system works properly and is fair to everyone using it.
• Handling Different Types of Messages: There are different kinds of messages that can be sent to smart contracts. Some are like regular mail, while others are like urgent messages that need immediate attention. The Execution layer makes sure each message gets to the right place and is dealt with appropriately.
• Dealing with Big Tasks: Sometimes, tasks are too big to finish in one go. Just like doing a big project over several days, the Execution layer can pause a task at the end of one round and continue it in the next. This way, nothing gets left unfinished, and the system stays running smoothly.
• Keeping Things Secure: It's important that everything is done safely and securely. The Execution layer makes sure that only the right things happen and that no one can cheat the system.

ICP As A Bitcoin Layer 2

Bitcoin integration on the Internet Computer enables canister smart contracts to interact directly with the Bitcoin network in a trustless manner, offering new opportunities for DApps. Two main challenges were overcome to make this possible:

• Protocol-Level Integration: The IC was integrated with the Bitcoin network at a protocol level, allowing it to fetch Bitcoin blocks and process transactions. This integration maintains the full Bitcoin UTXO set on the IC, letting canisters query UTXO sets and balances.
• Chain-Key ECDSA Signatures: Canisters (smart contracts) can now hold ECDSA keys using a novel chain-key ECDSA signature protocol suite. This allows them to send and receive Bitcoin, create transactions, and request threshold ECDSA signatures for spending UTXOs.

Bitcoin Integration Components

The Bitcoin integration involves several key components and processes that enable direct interaction with the Bitcoin network:

• BTC Canister: A Bitcoin-activated subnet includes a BTC canister, managed as a regular NNS (Network Nervous System) Wasm canister. This canister holds on-chain Bitcoin-related data, including the UTXO set, recent Bitcoin blocks for fork resolution, and outgoing transactions.
• Bitcoin Adapter: At the networking layer, a Bitcoin adapter process connects to Bitcoin network nodes, functioning like a regular Bitcoin node.
• Maintaining the UTXO Set: The BTC canister and adapter communicate via ICP's protocol stack. The BTC canister requests new blocks from the adapter, which retrieves them from the Bitcoin network. The canister validates these blocks, processes transactions, updates the UTXO set, and handles unstable blocks for fork resolution and balance queries.
• Submitting Transactions: Canisters use the management canister API to submit Bitcoin transactions, which are queued for submission to the Bitcoin network. The adapters in each subnet replica handle the asynchronous submission of these transactions, ensuring efficient and quick distribution across multiple Bitcoin network nodes.

Current Projects

• ICDex: This is a 100% on-chain order-book-based decentralized exchange running on the Internet Computer. Using ICP's native Bitcoin integration, you can buy ICP using your BTC. ICDex also supports ICRC-1, which allows users to trade SNS tokens.
• Funded: Web3's alternative to Kickstarter, Funded runs 100% on the Internet Computer and uses NFTs to provide ‘"proof of ownership" in the projects you help crowdfund. Like a project? You can fund it in ICP and BTC.
• DSCVR: This is an end-to-end decentralized Web3 social media platform that allows communities to form into groups called Portals. These Portals can be NFT gated, airdrop fungible and non-fungible tokens to their members and much more. DSCVR also allows for tipping posts in a growing number of cryptos, including ckBTC. Chain-key Bitcoin (ckBTC) is a token on the Internet Computer that is backed 1:1 by Bitcoin such that 1 ckBTC can always be redeemed for 1 BTC and vice versa.
• OpenChat: OpenChat is a decentralized real-time messaging service that lives 100% on the blockchain. It allows people to send crypto to their friends — including Bitcoin with TX fees at only $0.0029 and OpenChat's own governance token, CHAT.

ICP Ethereum Integration

Internet Computer integrates with Ethereum and other EVM (Ethereum Virtual Machine) chains through its Chain Fusion Technology, which eliminates the need for a single trusted intermediary. This integration is powered by two key components: decentralized bi-directional communication with other chains and the ability of ICP smart contracts to sign and submit transactions to these chains.

Chain fusion enhances non-ICP smart contracts and DApps by incorporating ICP’s capabilities. This includes a Web2-like user experience, where interactions with ICP smart contracts are low-cost, fast, and simple, resembling traditional web services. This allows users to engage with smart contracts using a standard browser without needing a crypto wallet.

Before we move any further, here's a neat table courtesy of ICP:

Key Features:

• Threshold Signing Services: ICP smart contracts can use threshold ECDSA signing, enabling them to sign Ethereum transactions securely.
• Oracles and DAO Frameworks: Access to real-time data and decentralized autonomous organization frameworks.
• Privacy Tools and Pass Key Authentication: Enhanced security and authentication features.
• Smart Contract Wallets and Reverse Gas Fees: Efficient wallet functionalities and gasless transactions.

ICP highlights the benefits of this integration, which include increased liquidity and market access, improved scalability and throughput for Ethereum dApps, and the ability to fully decentralize Ethereum DApps by hosting data on ICP. Users can perform gasless token swaps with ckETH and ckERC-20 tokens, enjoying minimal fees and fast transactions. Additionally, ICP connects smart contracts to real-world data through Web2 integration, enabling practical swaps with low fees and quick finality using ckTokens.

Ethereum Projects on ICP

Here's a sampling of ETH projects on Internet Computer:

• Bitfinity is an EVM that allows user to deploy smart contracts written in Solidity on the IC.
• Masquerade (MSQ) is a Matamask Snap-based wallet.
• zCloak network is developing a chain abstraction-based Zero Knowledge coprocessor on the IC.
• Helix Markets is a hybrid spot orderbook DEX developed on the Internet Computer protocol.

ICP Token

The ICP token serves multiple roles within the Internet Computer Protocol. As a governance token, it can be staked to exercise governance rights. As a utility token, it can be burned to obtain "cycles," which act as gas for computation and storage in canister smart contracts. Additionally, ICP tokens can be minted to reward node machine providers for supplying compute and storage resources.

Beyond these core functions, ICP tokens are used in decentralization swaps to become co-owners of SNS DAOs and in various smart contract services like registries, marketplaces and exchanges. The ICP token adheres to the ICRC-1 standard.

The ICP token utility includes:

• Participate in Governance: ICP token holders can stake their tokens in neurons with a dissolve delay greater than six months to vote on governance proposals and earn rewards. They can also submit proposals to change the protocol. The Network Nervous System (NNS), the largest DAO managing an L1 blockchain, oversees this governance system, which currently has over 250 million locked ICP.
• Burn for Cycles: In the Internet Computer’s "Reverse Gas Model," developers pay for computation and storage by topping up smart contracts with cycles, allowing users to interact with DApps without needing tokens, similar to Web2 applications.
• Reward Node Machine Providers: ICP tokens are minted to reward those who provide the necessary compute and storage infrastructure.
• Participate in the Ecosystem: ICP tokens can be stored in wallets, swapped on decentralized exchanges, used to collect NFTs, or for tipping friends in chats. The Internet Computer hosts a growing ecosystem of DApps utilizing ICP.

Where To Buy ICP Token

If you're looking to buy ICP, you can do so via Binance, Coinbase, Bybit and OKX, among many others. Also, check out our ranking of the best crypto exchanges.

There aren't many decentralized exchanges where you can buy ICP with Sonic and ICPSwap as the only two options.

Internet Computer Review: Closing Thoughts

The Internet Computer Protocol offers a decentralized platform that efficiently hosts and executes smart contracts at scale. By addressing the limitations of traditional AI and blockchain systems, ICP leverages smart contracts to ensure transparency, integrity, and efficiency in decentralized applications.

Key strengths of ICP include its ability to provide a tamper-resistant environment for AI models and other applications, fostering security and trust through transparent operations. The high-performance smart contracts, known as canisters, can handle significant computational resources, enabling the deployment of complex AI models with remarkable speed and efficiency. ICP’s cost-effective and environmentally friendly design, coupled with a user-friendly experience, allows users to interact with smart contracts directly through their browsers.

Its interoperability with other smart contract blockchains and traditional web resources facilitates seamless integration with existing ecosystems. All in all, ICP is a versatile platform that addresses critical issues in traditional AI and blockchain systems while paving the way for a more secure, transparent and efficient digital ecosystem.