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It was named the most high-profile crypto project of May 2021. After listing on the largest exchanges, the cost of the ICP (Internet Computer) token jumped to $730. This allowed Dfinity (Decentralized Infinity – decentralized infinity) to enter the top five largest cryptocurrencies by capitalization with a figure of more than $90 billion. After 10 days, the price of the asset fell to $190, and it moved into the top ten with a cash balance of $24 billion. What is hidden under sign of innovation?
Conquest of the peaks
DFINITY Foundation chief scientist Dominic Williams founded the company to coordinate activities, raise funds and control costs. The current model of the Dfinity project was created six years ago using threshold cryptography and random number generation within the blockchain. The next step was the construction of the basic architecture of ICP and the first framework for working with software.
Following are the important steps:
- End of 2015 – the project was publicly announced.
- October 2016 – registration of the NGO DFINITY Foundation.
- February 2017 – the first round of attracting investments through a crowdsale. $4.5 million raised.
- Early 2018 – $61 million in funding received from Andreessen Horowitz and Polychain Capital.
- August 2018 — a token sale for venture investors attracted investments for another $102 million. The cost of one ICP token averaged a little over $4. Then the first airdrop took place. In total, $35 million worth of tokens were distributed to users.
Since the end of 2019 and throughout 2020, the project has been actively developing, strategically important milestones have received “metal” designations. The first stage – “Copper” – took place in November 2019, then the first version of the SDK was launched and the description of Motoko (programming language) was published. The beginning of 2020 – “Bronze” (Bronze) – was marked by the release of a decentralized version of LinkedIn with an almost identical name – LinkedUp. In June, the third stage, Tungsten, opened. During this period, an analogue of TikTok was created.
In September, the project moved to the Sodium stage, at which time the developers launched NNS (standalone software). The next period began in December 2020 and was named “Mercury” (Mercury). Finally, the alpha version of the main network was launched, and after 3 months, the beta version.
And the last significant event was celebrated on May 7, 2021. On this day, the genesis block of the Dfinity network was created, the first ICP tokens were issued and they were listed on exchanges.
What’s in a name?
The developers of Dfinity set the goal of creating an infrastructure for the decentralized Internet using blockchain technology. The team focused its main efforts on improving the idea embodied in Ethereum – the creation of a global computing machine.
- facilitate and standardize the development of new software products;
- ensure the anonymity of user data;
- reduce the cost of storing and protecting information on the network;
- be independent of external, corporate or government governance.
As conceived by the creators of the project, Dfinity will be able to support any application intended for both general and individual use. Social networks, instant messengers, service programs, business solutions will be located inside a public and public “Internet computer” and use its resources. According to the team members, it will not only compete with Amazon Web Services, Microsoft Azure and Google Cloud, but also host decentralized alternatives to applications such as Uber, Facebook, eBay or TikTok.
The principle of operation of the “Internet computer” Dfinity
What does the project ecosystem consist of and how does it interact? The Dfinity network has a complex structure. It is made up of several elements:
- Motoko. All functionality of the Dfinity network is based on a new programming language developed by the DFINITY Foundation. With its help, users create and maintain software products within the Internet Computer environment. In addition, work is underway to add compatibility with other programming languages to the SDK (toolkit for creating applications). Support for Rust and C has already been implemented. However, the developers note that in the foreseeable future, Motoko will remain the simplest and safest for Dfinity.
- Internet computer. This is the official name of the Dfinity network. The concept covers a set of private and autonomous software systems, infrastructure, data and provides interaction between them. The entire platform is managed within the ICP (Internet Computer Protocol). It was designed to publicly manage an internet computer, providing it with “limitless scalability with millions of nodes”.
- Open Internet Service (OIS). This name was given to autonomous applications that can work independently, that is, without the control and participation of users. For example, LinkedIn has closed access to its API for anonymous users and thousands of companies can no longer receive public information from this social network. OIS helps developers create new applications by providing seamless access to data from their services.
- Network Nervous System (NNS). This is a stand-alone software based on the application of artificial intelligence technology. NNS is responsible for maintaining the health and making changes to the ICP, and also regulates all processes occurring within the Dfinity network:
For example, NNS submits proposals for users to vote on adding individual nodes and entire subnets, performs network scaling, and is responsible for verifying transactions in ICP.
- canisters (drives). Drives in Dfinity are special blocks containing not only the program, but also information about all user interactions with it. The developers claim that containers in Dfinity are the next stage in the development of smart contracts.
- Cycles. They serve as “fuel” for drives and are analogous to gas in Ethereum. All operations in the ICP require a certain number of cycles. In turn, the drives reflect the contents of the user’s account balance, which is spent on payment for transactions, application operation, and data storage. The limit on the number of cycles that can be stored in the drive will not allow organizing a DDOS attack on the Dfinity network.
- Neuron. These are special structures in the Dfinity blockchain that give voting rights to their owners. To create a neuron, it is necessary to block a certain number of ICP tokens for some time. Depending on this number and blocking time, the “weight” of the neuron during voting will be determined. For them, the owners of the structures receive a reward in the form of ICP. The upper limit of the reward at this stage is 10% of the tokens locked for the creation of the neuron, subject to the maximum age of the lock. The emission process is called “thinking mining”. Tokens received in the form of a reward have zero “expiration”.
- ICP Token. The native currency of the Dfinity project. ICP tokens are used to “freeze” and form neurons, they pay mining rewards, they serve to pay for the use of the ICP infrastructure.
- Chain Key. The name of the technology that allows the ICP to exchange data that updates the state of the drive every second. However, this speed is not enough to successfully compete with modern networks. In order to increase network performance, a division of functions into 2 types was introduced – call-request and call-update. The second one still takes 1-2 seconds to process. But the first ones are executed at a speed of several hundred units per second. The record of any change in the state of the drive by requests of the first type is deleted after its execution, due to which this process takes only a few milliseconds.
- Subnet. Subnets are blockchains in ICP that can integrate with other blockchains to scale the network and increase its throughput. NNS connects individual nodes into subnets, which then serve as a working environment for the operation of drives. Each subnet operates on its own blockchain. And the work of drives is organized in such a way that they can publicly interact with drives in other subnets. In fact, it makes no difference for a user application whether to access a drive on the same subnet or any other.
- Threshold Relay. This is the input validation mechanism used in the ICP. Threshold Relay is a 4-level system:
– digital notary;
– random beacon;
The first level serves to provide guarantees for fast processing of tasks to users and external clients. The second is necessary for the formation and addition of new blocks to the blockchain. The third is needed to select random neurons when forming the next block. The latter provides registration and identification of ICP clients.
- WebAssembly (Wasm). Wasm is a low-level programming language for a stacked virtual machine. It serves to compile applications written in Motoko. ICP uses Wasm to store data and execute code within the network. This language has long been used to develop cross-platform applications for different browsers, which is why it was chosen for compiling Motoko.
Creating an application for an “Internet computer” goes like this:
- Source code written in Motoko is compiled into a WebAssembly module.
- Next, the module is placed in a drive within the Dfinity network.
- After that, end users can interact with the drive by accessing various application features through a browser or the interface of the client itself.
The Dfinity network is deployed on the basis of independent DPCs (Data Processing Center) located in all corners of the world. They serve as the basis for building subnets with many nodes. A new data center, in order to become a global Dfinity network, must first receive a special DCID. It is assigned by NNS, acting as ICANN from the familiar Internet, but with much more extensive capabilities. After receiving the DCID, the data center can create nodes, in fact, ordinary servers. If scaling is needed to perform some tasks, NNS adds such nodes to the appropriate subnet. Data centers are rewarded for their work in the form of ICP tokens.
To run a node on your PC, the user must ensure that it meets the minimum parameters and ensures efficient operation. At the moment, the creation of nodes occurs in waves, after consideration of applications by the developers of Dfinity. The exact requirements for the data center are not disclosed to the general public.
Despite the fact that the successful listing of the project tokens made it to the front pages of newspapers, it cannot be unequivocally asserted that it will take off in the future. The idea underlying Dfinity is certainly attractive to users, application developers and business structures. But it is difficult to predict how fully it will be implemented and how quickly. Although at the beginning of 2021, Dominic Williams announced a roadmap for 20 years, no one has yet seen this document.
Maybe Arthur Hayes, CEO of the BitMEX crypto exchange, was right when in 2019 he spoke about the tokens of Telegram, Filecoin, Dfinity, Polkadot, tZero, Basis, Hashgraph, Cosmos, Orchid Protocol crypto projects: “Who will buy all these shitcoins after entering the market? Those [инвестиционные фонды]those who have invested in them in closed token sales will not be able to hide their huge losses, even using various accounting tricks.”
Time has shown that he was right in evaluating some projects. For example, tZero and Cosmos did not live up to the expectations of venture investors, and Basis died altogether due to problems with regulators in the United States. At the same time, Filecoin is developing successfully, and the ICP token, at a cost of $190, brought a good profit to early investors who paid just over $4 for it.
Perhaps closer to the truth are the words of Linda Kreutzman, Associate Dean of the School of Business at the University of California, uttered after the news of the successful listing of ICP tokens: “The timing and name created an ideal situation for an explosive debut.”
It remains to be seen how the project will show itself in the long run, because its publicity is only a few days.
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