We Researched DFINITY and the Internet Computer: This Is What We Learned
Bitcoin, Ethereum, Solana, DFINITY’s Internet Computer (IC), plus hundreds, if not thousands, more blockchains are now out there in the Web3 world. What exactly separates one from the other — and what are the important things to consider when researching and eventually participating in a blockchain network?
We did the work for you and the good news is, DFINITY has your answers!
For the uninitiated, blockchains are a complicated topic. The term often conjures up buzzwords like decentralization, cryptocurrency, gas, and more, further confusing those who aren’t in the industry. However, understanding why blockchains are an important evolution in the World Wide Web is a key building block to understanding how blockchain technologies are poised to change the way we interact online forever.
What’s a Blockchain?
At its most basic level, a blockchain is essentially a list of transactions anyone can view and verify. This list is distributed across several computers located all around the world, without one single company or entity managing it. The Bitcoin blockchain, as an example, has its list of transactions distributed around the world. Each time a Bitcoin transaction is sent and received, this transaction is recorded on the list (also known as a ledger). On the Ethereum blockchain, the same thing happens, except that Ethereum transactions are recorded on a different list, maintained by different computers. Because of this arrangement, it’s common to refer to such blockchain networks as decentralized, as they are not centrally maintained by any one party or person.
Problems With Existing Blockchains
By now, most associate Bitcoin with blockchain technologies. Due in large part that Bitcoin was the first blockchain and continues to be the world’s most valuable blockchain (based on the value of Bitcoin), it’s understandable why this pioneer of decentralized technologies appears to be the standard when referencing blockchain.
However, for all the good things Bitcoin has introduced to the world, it (as well as many other blockchain networks), falls short in many other aspects of decentralized technologies. Below are some of the challenges Bitcoin and other blockchain networks face as the technology continues to scale.
— Speed: By now, society has become used to payment systems that appear to complete within seconds. Users swipe credit cards, transfer payments electronically, or simply scan QR codes. Therefore, any transaction that takes more than a few seconds before the payer can walk away is already far too long. Users may be surprised to learn that processing times for a typical Bitcoin transaction can average at least 10 minutes. Ethereum’s transaction speeds are astronomically better in comparison, coming in around 13 seconds per block, but still far longer than the seconds it takes to swipe a card. To be fair, credit card transactions usually take 48 hours before they settle but the user experience that the card has “gone through” usually takes a matter of seconds.
— Gas: Also known as a “transaction fee”, “gas” refers to the transaction fees that payment senders must pay before sending a transaction. While blockchains offer decentralized technologies, using the network isn’t free. For Bitcoin, costs can average over $2 per transaction, while on Ethereum, costs can swing wildly, reaching over $100 during peak network times.
— Not-so-decentralized infrastructure: While the Bitcoin network has been able to stick to the principle of decentralization, other popular networks like Ethereum and Solana have struggled. While on the surface it appears decentralized, it’s believed 70% of Ethereum nodes and over 35% of Solana nodes are hosted by centralized cloud providers such as Amazon, Google, Microsoft, and others.
With slow speeds, expensive transaction costs, and ultimately the benefits of decentralization not fully utilized or leveraged, what can be done to bring blockchain technology up to a level where it’s meant to be?
Introducing DFINITY and the Internet Computer Blockchain
We researched far and wide to understand other promising blockchain solutions currently available in the Web3 world. While research in the next generation of the internet will need to regularly be reassessed and reevaluated due to the hyper growth speed of the sector, our preliminary research results have turned up a promising solution to all of the issues noted in the preceding section.
The DFINITY Foundation is a Switzerland-based, not-for-profit organization that’s on a mission to develop technology that supports the next generation of the internet. Founded in 2016, DFINITY has become the major contributor to the Internet Computer blockchain project. With research and development centers worldwide. Led by founder and chief scientist Dominic Williams, this early Ethereum technologist is out to address the previous limitations of existing blockchains and introduce a truly decentralized and usable solution for the masses.
This solution, known as the Internet Computer Blockchain, is fast, free of transaction fees for consumers, and truly decentralized, ultimately achieving the breakaway from any reliance on centralized Web2 services.
While other blockchains are offering similar solutions, our research reveals DFINITY’s Internet Computer stands out in the areas covered above, among others.
Measuring by speed, research shows the Internet Computer has sub-one-second transaction times per block (0.045 seconds, to be more precise). Additionally, with the ability to process up to 250,000 queries per second, DFINITY’s Internet Computer Blockchain can take on a monumental number of greater transactions than its Bitcoin and Ethereum counterparts.
Measuring by transaction fees, our research was simple — there are none for the end consumer on the Internet Computer. Unlike other blockchains, DFINITY has designed the IC so it isn’t the users who pay for gas, but rather, developers who supply the funds to run the blockchain. With “no gas,” users view the Internet Computer as more in line with paying with a credit card at a merchant. In this scenario, it’s the merchant who pays the card fees, not the consumer.
Looking at sovereign infrastructure, our research revealed that at the start of 2022, the Internet Computer had 412 nodes operated by independent node providers around the world. Such an arrangement is far different and much more decentralized than other popular blockchains.
Other Benefits with DFINITY’s Internet Computer Blockchain Design
Our research has also shown that, like other blockchains, Internet Computer’s native cryptocurrency, the Internet Computer token (ICP), has several novel use cases which further benefit the network and its users.
In true decentralized fashion, the Internet Computer is a network built for users and which will be guided by the users. By holding ICP tokens, individuals who want to have a say in the future direction of the network can use the token to vote on the future direction of the protocol. This can come in the form of voting on proposals and earning voting rewards through mechanisms designed by the protocol. Additionally, the ICP token can be used to reward network participants, especially those node providers who are helping to keep the network up, running, and fully decentralized.
By putting the power and direction of the network in the hands of the people and directly rewarding and influencing those who support it, the Internet Computer has been designed in such a way that it will be incentivized to act in the best interests of its users and not a centralized corporation or entity.
The Internet Computer Is Just Getting Started
With Internet Computer’s “mainnet” having only launched in 2021, a host of other exciting new features and developments are on the foundation’s road map for the foreseeable future.
After its launch, several decentralized applications (dApps) launched on the Internet Computer. In particular, distrikt, which is a decentralized social media network for professionals, OpenChat, a decentralized messaging application, and ORIGYN, a not-for-profit that serves to authenticate and manage luxury goods. Building on the popularity of NFTs from 2021, Entrepot, Internet Computer’s first NFT marketplace, is also now available to the public.
As the Internet Computer continues to develop both in terms of technology and community, new applications, solutions, and possibilities with the Internet Computer blockchain are sure to arise. With new entrants coming into the blockchain and Web3 space daily, exciting times are ahead for the Internet Computer and its users.