This is a collection of Frequently asked questions about the Internet Computer (IC) meant to address a general audience.
1.1 What is the Internet Computer?
The Internet Computer is a “general-purpose” blockchain that provides a public platform for hosting tokens and decentralized applications (dapps). It acts as a complete technology stack, such that systems and services can be built that run entirely from the blockchain. Its key characteristics are:
- Very fast
- Very cheap to host smart contracts (millions of times cheaper than Ethereum for example)
- Governed by on-chain governance and upgrades
- Robust smart contracts that host both backend and frontend, and provide good user experience
- Environmentally friendly
1.2 What kind of dapps can run on the IC?
The IC can run very complex smart contracts and dapps. Most notably, smart contracts and dapps on the IC differ from other blockchains in that:
- They are very cheap to maintain
- They are fast enough to provide a good user experience
- They are easy to develop because of the canister model
- They host all state, frontend, and backend code (all parts of the dapp live on-chain)
To see a list of examples see: Index_of_dapps_on_the_Internet_Computer_ecosystem
2 Crypto and Blockchain questions
2.1 How is the IC different from Bitcoin?
The IC and Bitcoin are both blockchains. What sets them apart is that Bitcoin is ultimately a ledger and cannot host any dapps. It can only maintain the state of what accounts own which tokens. The IC can have extremely complex smart contracts and dapps that can supporr defi, games, social, enterprise and other types of dapps.
More concretely, due to the limitations of Bitcoin, a smart contract developer could not build smart contracts on Bitcoin.
Under the hood, IC is much faster, much more efficient, can host entire dapps, etc...
3 The IC today
3.1 How big is the IC?
The Internet Computer's size (read: topology) can be measured in a few ways:
- Number of smart contracts
- Number of subnets
- Number of nodes
- Number of data centers
3.2 How many smart contracts are on the IC?
- As of May 27, 2022, there are 75,658 smart contracts created since May 10, 2021. The goal is for this to be billions in 10 years.
- As of May 27, 2022, there are 35 subnets in the Internet Computer. The goal is for this to be hundreds of thousands in 10 years.
- As of May 27, 2022, there are 518 nodes in the Internet Computer. The goal is for this to be millions in 10 years.
- As of May 27, 2022, there are 21 data centers in the Internet Computer. The goal is for this to be thousands in 10 years.
3.3 What are examples of dapps and smarts contracts on the IC?
4 How fast is the Internet Computer?
For a deeper dive, see Internet Computer Performance.
Below is a high-level overview:
The most helpful way to way to answer this question is by choosing a vantage point.
4.1 From the point of view of a dapp user (e.g. "dapps the speed makes possible")
From the point of view of a user of a dapp, the IC is "fast" enough that app consumers would have no idea that it runs with a blockchain under the hood (or Azure or IBM or AWS). It would be comparable to centralized compute providers. This means that while it would be extremely tricky to "build an Airbnb web app on (traditional) smart contracts" because of the slow user experience, developers can create "Airbnb web app on the Internet Computer".
That is how apps like OpenChat, LinkedUp, Distrikt can provide a good user experience.
4.2 From the point of view of a dapp developer (e.g. "latency of calls")
There will be two relevant factors:
a. How fast a dapp can READ data from a backend on the IC - Apps can make query calls to canisters (which hold state) so it can read data in less than a second (targeting under 200 milliseconds and regularly hit under 250 milliseconds).
b. How fast a dapp can WRITE data to a backend on the IC - Apps can make UPDATE calls. These go through consensus so they take more time. Target is 2 seconds currently (with constant work to decrease that further). Compared to BTC or ETH, this is orders of magnitude faster. Compared to centralized compute, this MAY seem slow at first, but actually, if you take into account the amount of replication across servers in most stacks, it is par for the course.
More details here: Internet Computer performance
4.3 From the POV of blockchain measurements (e.g "blocks per second & transactions per second")
The IC is "unbounded" which means that, unlike most other protocols, it can improve latency and throughput by adding more machines. Roughly speaking, if the IC grows in subnets, it can handle more update calls. If it grows in nodes per subnet, it can handle more queries. This is a key point in the phrase "the IC is unbounded." As of January 18, 2021, the Internet Computer is processing 31.7 blocks per second: https://dashboard.internetcomputer.org/
5 The ICP Token
5.1 What is the function of the ICP utility token?
The ICP token is used in a variety ways.
5.1.1 Computation and Storage
The first use ICP is used to pay for computation in the form of cycles. 1 SDR of ICP can be converted to a trillion cycles. SDR is a stable basket of currencies tracked by the IMF. Its price sits around $1.42 USD at the time of writing. Cycles are burned to pay for computation, storage, and serving of web pages. As more dapps are hosted on the Internet Computer blockchain, more ICP tokens are converted and burned.
5.1.2 Governance of the Internet Computer
The second use of ICP is in the NNS. If you want to vote and earn voting rewards in the NNS, you have to stake your ICP tokens in a neuron. When you vote, you receive voting rewards in the form of newly minted ICP tokens.
5.1.3 Rewards to node owners
Lastly, ICP tokens are also minted as rewards to node owners. On the one hand, the total supply of ICP is deflationary because the tokens are converted into cycles and burned. On the other hand, it is inflationary because rewards are minted for node owners and neurons.
5.2 What is the supply, circulation, burning and minting of ICP token?
ICP token circulation is available on the dashboard: ICP Circulation
ICP burning and minting is determined by a few mechanisms:
5.2.1 Minting mechanisms
- ICP is minted to pay for NNS rewards
- year is is 10% annual inflation, linearly decreasing until it is 5% annually year 8
- ICP is minted to pay for node providers
- This depends on the number of nodes in the system
- This is currently less than 1% of minting
5.2.2 Burning mechanisms
- ICP is burned to create cycles (which pay for computation and storage)
- This depends on the demand for computation and storage of smart contracts and dapps
- ICP is used to create NNS proposals
6 Why can the Internet Computer do these things other blockchains cannot?
The technical reasons go beyond the scop of the FAQ, but a high-level answer is:
6.1 Unique to the Internet Computer
Chain key cryptography is the engine that drives the Internet Computer and makes its operation possible. It allows for:
- Adding new nodes to form new subnets to scale the network infinitely
- Replacing faulty or crashed nodes with new ones without ever stopping
- Reviving subnets even if too many nodes within have failed
- Upgrading the Internet Computer Protocol seamlessly, allowing the network to fix bugs and add new features
6.2 Modern technologies leveraged by the Internet Computer
The use of WebAssembly as the execution layer of the Internet Computer gives canister smart contracts an execution environment that allows for very powerful smart contracts
7 The ICP Ecosystem
7.1 Where can I see a list of some dapps on the Internet Computer?
7.1.1 Example dapps
7.1.2 Lists of dapps