Internet Computer hit crypto exchanges last Monday. Just minutes after opening, the new token shot up to an intraday high of $700, achieving a market cap of $90 billion. Of course, things settled down a bit, but Internet Computer had become the world's 9th most valuable cryptocurrency by the end of the day.
In just a few moments, Internet Computer had done what it takes most cryptocurrencies years to do. Much of that success had to do with the vision of the Dfinity founder and Internet Computer developer Dominic Williams. Williams and Dfinity see IC as the foundation of a new "open internet," an internet free from centralized databases and proprietary platforms.
"The Internet Computer is an open platform that frees the world from dependence on centralized server farms," Dfinity said in a statement. "Making it possible to host software and data directly in cyberspace without the need for...proprietary cloud services, server machines, software stacks, databases and firewalls."
Internet Computer borrows a bit from Ethereum's smart-contract system, which allows different computers to run various snippets of code over a decentralized network. For developers, Internet Computer solves a real problem, a problem known as deplatforming. Zynga (NASDAQ: ZNGA) felt this first hand when it was nearly put out of business when Facebook (NASDAQ: FB) updated its policies, not to mention Epic Games and its infamous battle to get Fortnite back on both the Apple (NASDAQ: AAPL) App and Google (NASDAQ: GOOGL) PlayStores.
So how specifically would Internet Computer resolve deplatforming risk for developers, and perhaps more importantly for the token's future, how will it compete with Ethereum?
Ethereum's smart-contract technology allows applications to run through the decentralized blockchain, whereas most apps today run through centralized servers, servers usually owned by big-tech companies. With smart contracts, different computers in the blockchain act as a team, with each computer executing its bit of code to perform a single action.
The problem with this protocol is that it's fairly slow, making it impossible for larger companies to switch from a centralized server to a decentralized blockchain. According to Williams, this inherent slowness is because most blockchains run on the cloud. But "the Internet Computer runs entirely on dedicated hardware that are installed by independent parties around the world," he told Bloomberg.
According to team Williams, real hardware makes all the difference, allowing the IC blockchain to run applications at web speed with potentially unlimited capacity.
Theoretically, Internet Computer could lead to open versions of YouTube or Facebook, which could free content creators from arbitrary censorship. With enough hardware, the IC blockchain could handle enterprise levels of data and render Amazon's (NASDAQ: AMZN) server farms obsolete.
So is Internet Computer truly the third stage of cryptocurrency? First Bitcoin laid the foundations for the blockchain. Ethereum used the blockchain to run decentralized, and now Internet Computer plans to upgrade the blockchain with enough hardware to power a truly open internet.
For Internet Computer, there's a long way to go. The token will have to prove itself against the much more popular Ethereum after it upgrades to Ethereum 2.0. Because the IC blockchain runs on physical hardware, considerable investment will be needed to build a robust network of independent data centers capable of delivering on Dfinity's promises.
"In 20 years' time, the open internet will finally be significantly bigger than Big Tech's closed proprietary ecosystem," Williams told CryptoNinjas. "Much of our crucial global society's information infrastructure, systems, and services will now be running on the open, unstoppable, and tamperproof Internet Computer blockchain network."