Imagine an internet where you own the apps, control the data, and even manage the infrastructure. This is the vision of Internet Computer Protocol (ICP). In this ICP review we break down what ICP is, how it works, what is being built on it, how the token works, and why it could change how we use the internet, along with the concerns that have followed the project since launch.

What is ICP? Internet Computer Protocol explained

ICP stands for Internet Computer Protocol, a blockchain built by the DFINITY Foundation that aims to host websites, apps and data on a decentralized network of independent nodes instead of on cloud servers run by Amazon, Google or Microsoft. ICP is also the name of its token, which pays for computation, secures the network through staking and gives holders a vote on how the protocol changes.

A note on the acronym, since a lot of people land here from a search for "ICP meaning": in crypto and software, ICP means Internet Computer Protocol. The same three letters also stand for "ideal customer profile" in sales and marketing and for a measure of intracranial pressure in medicine, which is why search results for "what is ICP" can look confusing. This article is about the blockchain.

So, what exactly is ICP? In simple words, the Internet Computer Protocol is a new way to run the internet. Instead of apps and services depending on big tech companies and their central servers, ICP runs on a network that is controlled by the community. This means the internet is not in the hands of a few powerful companies; everyone can have a part in it.

The goal of ICP is pretty big: it wants to create a new type of internet where anyone can build apps that are fast, can grow as needed, and do not depend on traditional IT infrastructure like Amazon or Google. Imagine a world where you could launch your own app without relying on these big companies and have full control over your data. It would be a huge change in how we see and use the internet.

Watch our ICP review

One of the best things about ICP is that it can handle a large number of transactions and smart contracts, much more than traditional blockchains. This means ICP addresses some of the problems other blockchains have with getting bigger as more people use them. It is also fast, with transactions happening in just a few seconds, so apps built on ICP work about as quickly as the ones we use today. Plus, it costs less to run these apps compared to regular cloud services, according to the project, which makes it easier for developers and entrepreneurs to create new things without spending a lot of money.

How ICP works

ICP runs on independent servers called nodes, which are grouped into subnets. These subnets host canisters, which are like super-powered smart contracts that hold both the code and the data needed to run apps. These canisters are the building blocks that developers use to create their apps on ICP.

To make it simpler, think of canisters as tools that developers use to make apps. The nodes are the servers that keep the ICP network running, and subnets are groups of these nodes working together to make the system stronger and able to handle more data as more people use it. This means the network can grow as needed without slowing down or causing problems.

ICP's setup is made to be simple and efficient so that apps can be built and run in a decentralized way. Unlike traditional apps that are hosted on centralized servers, which can have downtime or be hacked, ICP's decentralized system is designed to be more reliable. If one part fails, the rest of the network keeps going.

Motoko: the programming language for ICP

To make it easier for developers to create apps on ICP, the team made a special programming language called Motoko. Motoko helps developers make secure and scalable apps with fewer bugs. This language is easy to use, even for people who are not experts, which makes it easier for more developers to join in and start building.

Motoko is built specifically for ICP, so it works with the network's unique features. It is designed to be simple enough for beginners while also powerful enough for experienced developers who want to make more complex applications. Motoko also has safeguards built in to prevent common mistakes, which means fewer bugs and better security. Developers who prefer not to learn a new language can also build canisters in Rust.

What makes ICP stand out?

One of the most important things about ICP is its speed. Transactions happen in just seconds, which makes apps built on ICP feel like the ones you are used to today. This matters because people expect the internet to be quick and responsive, and ICP is designed to meet those expectations.

Other blockchain networks, like Ethereum, can be slow, especially when lots of people are using them at the same time. ICP uses new technology to keep its performance high, no matter how many people are using it. This means you can use apps on ICP without the lag that sometimes happens with other blockchain platforms.

The other distinctive feature is that ICP can serve a whole web application, front end included, directly from the chain. On most blockchains, only the money logic lives on-chain and the website itself sits on a normal server. On ICP the page you load in your browser can come from a canister.

ICP's consensus mechanism: how it stays in sync

ICP uses a consensus mechanism with two key technologies to keep everything running smoothly:

  • Threshold Relay: Helps the network quickly and securely agree on transactions.
  • Chain-Key Technology: Helps different parts of the network communicate and work well together, making everything scalable and efficient.

These technologies make sure that ICP can handle a lot of transactions at once, which is essential for powering a decentralized version of the internet. The combination of Threshold Relay and Chain-Key Technology allows ICP to process thousands of transactions per second, making it much faster than many other blockchain networks.

Chain-Key Technology: simplifying operations

Chain-Key Technology is special because it makes the network easier to manage. Instead of dealing with lots of different keys, the whole network uses just one public key to verify transactions. This keeps everything simple, secure, and fast as more users and apps join.

Having a single public key means any device can easily verify that transactions are real. This not only makes operations simpler but also adds a layer of security by reducing the number of keys that need to be managed. Chain-Key Technology also allows the network to be updated without any downtime, so improvements can be made without disrupting services.

Reverse gas model: a user-friendly approach

Another distinctive feature of ICP is the reverse gas model. On other blockchains like Ethereum, users have to pay fees to use the network, called "gas fees." ICP does things differently. Instead of users paying these fees, developers are the ones who pay to keep their apps running, by loading their canisters with cycles. This means users do not have to worry about transaction fees, making ICP apps easier and more comfortable to use.

This model is a big step in making blockchain technology user-friendly. On platforms like Ethereum, users need to understand gas fees and manage their wallets, which can be confusing. With ICP, the reverse gas model means users get a simple experience, just like they are used to with regular apps, without worrying about fees.

ICP ecosystem: which apps are built on ICP?

An ICP app is a web application whose code and data run in canisters on the Internet Computer rather than on a cloud server. Some of the better known projects within the ICP ecosystem:

  • DSCVR: A social platform similar to Reddit, but decentralized, where users control their content.
  • OpenChat: A secure messaging app where messages are private and do not rely on big tech servers.
  • Sonic: A finance platform for trading, lending, and borrowing without middlemen.
  • Entrepot: An NFT marketplace where you can buy and sell digital collectibles and art.

These projects are changing the way we think about apps, data, and ownership on the internet. DSCVR shows what a social media platform could look like if users were in charge. OpenChat is making messaging more private and secure. Sonic is creating a type of financial system that does not need banks, and Entrepot gives artists a way to sell their work directly without paying high fees to intermediaries. The honest caveat is that usage of most of these apps remains small next to their centralized equivalents.

ICP tokenomics: how the token works

As of September 2024, there were about 524 million ICP tokens, with around 471 million actively in use. These tokens have several important roles:

  • Transaction fees: Used to pay for transactions.
  • Cycles: ICP tokens can be turned into cycles, which power the canisters (smart contracts) on the network.
  • Governance: Token holders can vote on proposals and changes to the network.
  • Staking: By staking ICP tokens, users help keep the network secure and earn rewards.

The governance part of ICP is interesting because it allows people who hold tokens to have a say in how the network changes. The Network Nervous System (NNS) is the system that lets token holders vote and make decisions about upgrades and changes. This is meant to make the network controlled by the community instead of one central group.

Staking is also important in ICP. When users lock up their tokens, they help keep the network secure, and in return, they earn rewards. This not only helps make the network safer but also encourages users to stay committed for the long term, which is good for the health and growth of ICP. Note that ICP has no hard supply cap; new tokens are minted to reward node providers and stakers, while tokens converted to cycles are burned. Our topic hubs cover staking in more depth.

What makes ICP so problematic? The challenges ICP faces

The criticisms of ICP come down to three things: its token price collapsed after the 2021 launch and never recovered, a small number of groups run a large share of the nodes, and the DFINITY Foundation still has outsized influence over a network that is supposed to be community-run. None of these is fatal, but together they explain why "what makes ICP so problematic" is a common search.

Like any big project, ICP faces challenges. Scalability is always something to work on. Keeping everything running smoothly as more people use it is not easy. The network is built to grow, but making sure that it can do this without slowing down or running into problems requires constant updates and improvements.

Another challenge is node distribution. Right now, a lot of the network is controlled by a small number of groups, which raises questions about how decentralized it really is. Node providers must also be approved through governance and run specific hardware in data centres, which is very different from running a Bitcoin node at home. The goal is to spread out control more evenly over time, but this is still a work in progress. Having more nodes run by different people would help make the network more secure and less vulnerable to attacks.

Decentralization concerns

Some people worry about how much control the DFINITY Foundation still has over ICP. While ICP has a system called the Network Nervous System (NNS), which lets token holders vote on changes, there is still a feeling that more work needs to be done to make it truly decentralized.

The DFINITY Foundation plays a big role in building and guiding ICP, which has led to some debate about whether ICP is as decentralized as it aims to be. The NNS is meant to gradually give more control to the community, but this takes time. Many people in the blockchain world believe that decentralization is key, and how well ICP can achieve this will be very important for its success.

Privacy and security

Privacy and security are top priorities for ICP. It uses advanced cryptography and decentralized nodes to make sure user data stays private and secure. Unlike traditional cloud services where data is stored on one server, ICP stores data across the network, which makes it much harder for anyone to access or control it without permission.

Because ICP is decentralized, it helps protect against data breaches and unauthorized access. Instead of storing all data in one place, ICP spreads it out, making it more secure. At a time when privacy is a major concern, ICP's approach offers a different model from traditional internet services, though "decentralized" only delivers on that promise if the node distribution problem above is solved.

Final thoughts on this ICP crypto review

Our rating: 3 out of 5. Ambitious architecture with real capability, held back by a mixed record and considerable complexity.

ICP has a bold vision for the future, one where power is shared, privacy is protected, and innovation is open to everyone. By using advanced technologies and rethinking how the internet works, ICP is trying to make the web more open and driven by the community. Whether it gets there depends less on the technology, which is genuinely impressive, than on whether developers and users show up and whether control really does shift away from DFINITY. It is an exciting time for blockchain and decentralized technology, and ICP is one of the more ambitious attempts in the space.

Starting your crypto journey? Our community simplifies complex concepts like ICP, giving you actionable insights and exclusive resources. Join today to master crypto with experts and enthusiasts by your side.

Frequently asked questions

How many ICP tokens are there?

As of September 2024 there were about 524 million ICP tokens, with around 471 million actively in use. The token has four jobs on the network: paying transaction fees, converting into cycles that fuel canister smart contracts, staking to help secure the network in exchange for rewards, and voting on proposals that change the protocol. Those overlapping roles are what tie the token to actual network activity.

What is the Network Nervous System (NNS) in ICP?

The NNS is ICP's on-chain governance system. Token holders use it to vote on proposals, upgrades and changes to the network, with the aim of putting control in the hands of the community rather than a single central group. The intent is that the NNS gradually hands more authority to token holders over time, though critics argue that transition is still a work in progress.

Is ICP really decentralized?

Not fully, and that is the main criticism. A large share of the network's nodes is run by a small number of groups, and the DFINITY Foundation still plays a big role in building and steering the project. The stated goal is to spread node control more evenly and let the NNS shift power to the community over time. How well ICP achieves that will matter a great deal for its long-term success.

Can you stake ICP and earn rewards?

Yes. Staking ICP means locking up tokens to help secure the network, and stakers earn rewards in return. The lock-up is designed to encourage holders to stay committed for the long term, which the project views as good for the network's health and growth. Staked tokens also feed into governance, since participation in the Network Nervous System is tied to holding and locking ICP.

What does ICP stand for?

In crypto, ICP stands for Internet Computer Protocol, the blockchain developed by the DFINITY Foundation, and it is also the ticker for its token. Outside crypto the same letters mean other things, such as "ideal customer profile" in sales, so check the context before assuming a search result is about the blockchain.

What is an ICP app?

An ICP app is a web application that runs entirely in canister smart contracts on the Internet Computer, including the web pages you see, rather than on a cloud server. Examples include DSCVR (a decentralized social platform), OpenChat (messaging), Sonic (trading and lending) and Entrepot (an NFT marketplace). Users do not pay gas fees; the developer pays for computation in cycles.

Keep learning