Dfinity - ICP
Updated: Jun 21
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What is Dfinity (ICP) and how does it work?
Internet Computer (ICP), also known as Dfinity, is a blockchain-based decentralized network developed to provide an environment for smart contracts and other decentralized applications to run at web speed. ICP has its own utility token used to allow users to participate and govern the blockchain network. Developed by Swiss crypto foundation Dfinity, ICP provides key infrastructure updates to the Ethereum network with the aim to solve scaling issues. The aim of the network is to provide developers with the tools to create websites, IT systems, internet services, and Defi applications by installing them directly on the public web, with the goal of becoming the infrastructure of Cloud 3.0.
Dfinity, also dubbed as the World computer, is based on an optimized proof of stake (PoS) consensus mechanism. This blockchain focuses strongly on transactions by implementing a Threshold Relay technique combined with the BLS signature scheme and a notarization method. The Threshold Relay is a mechanism by which the network randomly samples replicas into groups, sets the groups (committees) up for the threshold operation, chooses the current committee, and relays from one committee to another.
ICP Internet Computer aims to extend the public internet with blockchain by using several different technologies:
Chain Key Technology: using multiple cryptographic protocols to orchestrate the nodes of the network. It has a public key, and it allows any device, such as a smartphone to verify the authenticity of items from the Internet;
Non-Interactive Distributed Key Generation (NIDKG): a publicly verifiable secret sharing scheme where the dealer shares off-field elements to other dealers that confidentially and verifiably distribute to multiple other receivers;
Network nervous System (NNS): the tokenized open governance system responsible for managing the ICP by storing information about nodes and handling the updating of the information;
Internet Identity: the online identity that an internet user establishes in website and online communities.
The Internet Computer planned to add smart contracts to Bitcoin through an application of Chain Key cryptography that allows for direct integration of the networks. These smart contracts allow the ICP to hold, send and receive bitcoin, without the need for private keys. This proposal was approved with an overwhelmed majority of 96.5%. Since their launch, the Canister smart contracts have surpassed 16,500, showing the growth in the development of the activity on the network.
Last update 11/1/2022
ICP Coin launched in early May 2021. ICP initially launched on Binance at around $252 and saw an initial spike in price. However, this move was short-lived and the gains disappeared within a couple of days. Unlike other projects from that period, ICP has seen it's price decline steadily throughout the end of 2021, seeing prices as low as $27.9 in July, just a month after being listed. After that initial collapse, in the following weeks prices recovered, seeing a local high of $81.5 in September. This move also didn't last long and prices were back to the historical support of $27.9 by December.
Ever since prices have recovered over the $27.9 support but have struggled to make any significant gain, and currently sit around $35.3 prices.
Over the last few weeks, there have been some positive moves for ICP price. ICP managed to regain both the 20EMA and 50EMA, this is the initial level it had to stay over to avoid a further down move. It would be positive to see it move over the 100EMA and maintain prices over $40.
The other key level to monitor is the resistance around $55. ICP has touched this level several times but struggled to maintain it.
If prices manage to get above this level they would likely test the next resistance level around $81. The ideal move for ICP would be a break and retest of the $55 resistance, where after going over this level, prices retest it as support before moving further up. This scenario would be extremely bullish and might see ICP price explore new highs by the end of 2022.