The Internet Computer is an ambitious blockchain that runs at web speed with unbounded capacity. Following Bitcoin that created digital gold and Ethereum that developed smart contracts and pioneered DeFi and NFT use cases, it is being advertised as the third major blockchain innovation as it aims to scale smart contract computation, runs them at web speed, processes and stores data efficiently, and provides powerful software frameworks to developers, enabling a next iteration of innovation and a complete reimagining of how systems and apps operate. The Internet Computer hosts special smart contracts, called canisters.
A canister smart contract is a bundle of WebAssembly bytecode logic and memory pages. DApps on the Internet Computer are created from one or more canisters. Canister smart contracts can serve web content directly to end-users, e.g., in their browsers, and users can interact with blockchain services without holding tokens. For dApp developers, building canisters on the Internet Computer provides key features and scalability that other smart contract platforms, for the most part, are struggling to reach. All of this being made possible thanks to innovation researched and developed by the team behind the project, such as Chain Key cryptography or even the use of their subnets.
Another important feature of the Internet Computer is that it runs under the control of a decentralized permissionless governance system, called Network Nervous System (NNS), which runs completely on-chain. Similarly to the way DAOs work, The NNS can make decisions on several topics, including scaling out the Internet Computer by creating new subnet blockchains, updating the node machines, and configuring parameters used in the Internet Computer protocol.
Anyone can participate in the governance and submit new proposals to the NNS or vote on open proposals by staking ICP, the Internet Computer utility tokens, which create voting neurons. Neuron holders are placed in a crypto economic game, where they are incentivized to vote to adopt and reject proposals, or to configure neuron follows that cause them to vote automatically in a desirable way, according to what is most likely to drive the value of the Internet Computer network over the long term.
Following the launch of the network and the associated release of the token last year, there have been a lot of interrogations and concerns, notably regarding the decentralization of the network. Indeed, the decentralization has been compromised in order to solve the major issue of scalability and speed, making the Internet Computer less decentralized in comparison to ETH for example. Most of the concerns over the protocol have been addressed, and the team made good efforts to shed light on several subjects that were causing the community to be doubtful. The decentralization will be progressive, allowing the team to handle pressing issues now while moving toward true community governance over the months.
Upcoming innovations and developments include integrating Bitcoin and Ethereum in the coming months (Q1 and Q3 2022 respectively). The Internet Computer protocol will be extended to add smart contracts to Bitcoin, thanks to an application of Chain Key cryptography that will give each canister their own Bitcoin public key, thus directly integrating the Internet Computer blockchain with the Bitcoin network. In particular, smart contracts on the Internet Computer will be able to hold, send and receive their own Bitcoin.
This is a way of bridging the two networks never seen before, and different from the usual bridges we have seen being used to transfer tokens from different platforms. If the team manages to roll out those functionalities as expected, it could accelerate its adoption, for both developers and end-users, offering a new playground for DeFi applications notably.
The Internet Computer is not the average smart contract platform, it is being built from the ground up as the infrastructure needed to provide a decentralized alternative to the centralized Internet. Seeing it being widely adopted will take time, but there are already some teams developing on it, with more than 150 projects having received grants from the $220M fund created for this effect, but also the recent launch of the first DEX on the Internet Computer, Sonic.