Is It Worth Investing In Internet Computer?

18 Min Read
Last Updated July 23rd 2021

Internet Computer is the new cryptocurrency to grace the crypto scene. The coin made a dramatic debut in early May and has been attracting a lot of attention. In just less than a month, Internet Computer skyrocketed to become one of the most valuable digital assets with a $45 billion market cap. 

Even with thousands of cryptocurrencies fighting for investor attention, it is surprising how quickly Internet Computer joined the ranks of blue-chip coins like Bitcoin, Ethereum and Dogecoin. 

Perhaps one of the reasons why Internet Computer was so hastily lapped up by the market is because of its uniqueness when compared to the myriad of other cryptocurrencies. 

The new digital currency is developed by Dfinity Foundation, a Zurich-based non-profit, and is set to compete with big fish like Bitcoin and Ethereum. It kicked off with a hefty launch price of $731 on May 10th 2021, making it the 8th most valuable crypto by market capitalization. 

Although the coin dropped to less than $150 within minutes, it somewhat rebounded to around $280 then dropped again. Internet Computer is currently trading at $110 with a market cap of $13.68 billion, according to data from CoinMarketCap. 

But what exactly is this new cryptocurrency, and how different is it from the others. 

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Contents:

What is Internet Computer (ICP)?

Internet Computer is a new cryptocurrency and protocol that provides a platform for creatives to develop websites, apps and other web-based projects. The project was initiated and developed by a Zurich-based non-profit organization known as Dfinity Foundation and is now backed by high-profile investors like Polychain Capital and Andreesen Horowitz. 

Instead of merely being a digital currency like Bitcoin or Litecoin, ICP takes the Ethereum route by allowing other users to create applications on its platform. ICP’s main goal is to facilitate the decentralization of the internet using blockchain technology so that creatives can take a break from using pricey services like Amazon Web Services and Google. 

The platform also allows the creation of DeFi (decentralized finance) apps that are much more efficient and cost-effective than mainstream financial services like PayPal and Western Union. 

So, in general, Internet Computer is less of a cryptocurrency and more of a network of apps that powers up the internet. 

How Does Internet Computer Work?

Before we get too far, let’s clear up a common confusion. Internet Computer is the digital token itself, while the protocol that this token runs on is called the Internet Computer Protocol (ICP). However, like with most cryptocurrencies that have a differently named native token, both are simply referred to as Internet Computer, so we might sometimes use the two terms interchangeably. 

Having said that, Internet Computer protocol works a bit differently from the others, which are mostly currency-based. 

ICP combines the computing powers of multiple computer nodes to create a unified or central computer platform that can support applications of varying scales and complexities. 

This protocol allows the segregation of smart contracts into secure code units referred to as ‘canisters’. These canisters are simply computational units that function independently. 

End users can then interact with these canisters using an entry point, like a search engine, much like today’s internet. 

However, this model doesn’t exactly function like today’s traditional internet. 

Let’s explain. 

Instead of relying on a centralized infrastructure like a Google server, the ICP hosts and serve applications and data directly on the blockchain. 

So, instead of relying on a single data centre, ICP capitalizes on a network of data centres to launch nodes that run on its protocol. The nodes are then organized into subnetworks that create the software canisters. The end-user will then interact with these canisters as part of their web experience. 

Dfinity founder Dominic Williams claims that this kind of protocol makes for a ‘hackproof platform’ that is not only interoperable but also helps to significantly reduce costs associated with traditional internet services. 

ICP reduces costs because the end-user doesn’t pay for the computational output of canisters. Instead, the canisters are pre-charged using cycles, enabling them to pay for their own computations. This is made possible using a ‘reverse-gas’ kind of model. 

This means that the end-user won’t have to own any Internet Computer tokens to be able to use ICP. As a result, a huge barrier to entry is eliminated. 

The data centres are remunerated with ICP tokens, some of which will then be used to charge canisters with cycles. 

In terms of security, ICP uses a four-layered consensus mechanism that revolves around POS (proof-of-stake). These are the notary layer, blockchain layer, beacon layer and identity layer. These layers jointly create a secure platform that can withstand common attack vectors like the 51% and Sybil attacks. All this is done without compromising decentralization or scalability. 

Read Also: Could Internet Computer Be A Millionaire-Maker Coin?

Why Did Internet Computer Grow so Fast?

ICP’s sudden popularity was not accidental. There are three factors that majorly contributed to that initial growth and will play a big role in the protocol’s future success. These are: 

  • ICP’s immense potential: Internet Computer has proved to be a potentially revolutionary technology. The idea of doing away with costly internet behemoths is attractive and readily welcome by users. 
  • Investor interest: Although ICP is barely a month old, it has already won the support of high-profile institutional investors like venture capital firm Andreesen Horowitz. This not only catalyzes the protocol’s growth but also build credibility to attract more investors. 
  • Marketing: The team behind ICP is doing a lot of promotion to ensure that the idea does not fizzle out before its full potential is realized. Price analysts have already projected a bullish momentum ahead, with the platform expected to grow significantly this year. 

There is also a generally bullish climate in the crypto market as more people are suddenly developing a bottomless appetite for cryptocurrencies. This has helped ICP gain users fast who hope to reap big from its success. 

Internet Computer Price History 

Being a recently launched fourth-generation cryptocurrency, Internet Computer has a little history under its name. However, for the few weeks that the coin has been in the market, it has undergone wild price swings to guarantee an exciting price history. 

Here is a graph from CoinMarketCap to illustrate how the price has grown since its debut on May 10th 2021. 

Source: CoinMarketCap

As you can see from the graph, the crypto had a major price surge on its first day. The price parabolically rose from less than $0.00000001 to around $640.19. This quick growth was sparked by the factors we discussed above. However, the coin could not sustain such as huge price leap, so just as quickly, it dropped to $265 within four hours of hitting its highest first-day price. 

The next day, Internet Computer briefly went above $500 then dropped again. It has now stagnated for a long time and seems to be struggling to reach its ATH again. 

ICP mostly bounced between $200 and $350 between May 13th and May 17th before dropping below $200 on May 18th 2021. By May 20th, it had gone below $130, where it stabilized and now keeps fluctuation between $100 and $150. 

Internet Computer is currently trading at $110 with a market cap of $13.68 billion and a fully diluted market cap of $51.76, according to updated data from CoinMarketCap. 

Check Out: 15 Reasons Why You Should Invest in The Internet Computer Now

Internet Computer (ICP) Price Predictions for 2021

After ICP’s crash on its first day of trading, price analysts haven’t been too enthusiastic about its future. The crypto came at a time when market-wide volatility was driving both hodlers and day traders crazy. 

Most investors were beginning to panic-sell their tokens, and several cryptos saw their prices fall. Although ICP came around when the early 2021 bull run was just signing out, it managed to pick up some of the momenta and saw its price shoot up. 

However, after the crash, investors became weary, and while analysts still expect the token to rise, the forecasts are not as glamorous any longer. 

Wallet Investor is on the bullish side and predicts that ICP might go as high as $882 by the end of the year. It seems that the price analysis site is slowly growing fond of Internet Computer’s future. Just recently, its prediction for the end of the year stood at $700 but has now gone above $800 even though the token has not shown much improvement. 

All the same, Wallet Investor seem to believe that ICP will finish the year above its current ATH. 

Digital Coin Price doesn’t share this enthusiasm. The price tracker believes that Internet Computer ICP will be worth slightly above $170 by December 2021. This is not only much lower than the token’s current ATH but also around five times lower than Wallet Investor’s prediction for the end of the year. 

In fact, Digital Coin Price seems to be bearish in the long-term since it predicts Internet Computer ICP to be worth $481 as far as December 2028. 

Although CoinPrice Forecast gives a slightly higher number compared to Digital Coin Price, it also seems to have lost faith in Internet Computer. This site is usually known for its bullish predictions, but its Internet Computer ICP forecast of $272 by the end of this year doesn’t exactly ring bullish. 

Long Forecast is also around this range, with is a prediction of $245 for Internet Computer by December 2021. While this is not a bad prediction, it doesn’t sit well with investors who are betting on at least a $1,000 end year price. 

Long Forecast expects Internet Computer ICP to drop below $100 in June, creating even more anxiety among investors.  This would be Internet Computer’s lowest price since entering the market. That is not exactly the kind of news anyone looks forward to when they are expecting huge end-year gains.

Generally, we expect Internet Computer to have fairly improved by the end of the year. However, we cannot tell with certainty if it will go past its current ATH. 

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3 Ways to Invest in Internet Computer

The three of the most common ways you can invest in ICP are: 

  • Hodling for the long-term
  • Day trading 
  • Investing in the underlying technology 

For the first two options, you will first need to buy some ICP tokens. However, if you are simply investing in the underlying technology, you won’t need any tokens. 

So, before we look at how to trade or hodl, let’s quickly go over how to buy some Internet Computer tokens. 

How to Buy Internet Computer 

Although there are currently few exchanges that support ICP, you can buy it from two of the biggest exchanges; Coinbase and Binance. 

Regardless of which exchange you choose, the process is fairly the same. Just follow the steps below:

Step 1: Create an Account 

Whether you are using Coinbase or Binance, you can easily create an account if you already haven’t.

You will be required to provide some personal information then verify your account. 

Step 2: Get a Wallet

If you don’t plan on actively trading or selling your tokens any time soon, you shouldn’t keep them on the exchange. Since the exchange controls your private keys, your investment can easily be stolen in case of a hack. So, if you want to hold your ICP tokens for a long time, we recommend moving them to an off-exchange wallet. You can either use a software or hardware wallet depending on your preferences and security features. 

While it is the safest option, there is a high probability that you won’t find a hardware wallet since the crypto is still relatively new. So, you can start with a software wallet for now and then upgrade to a hardware one as soon as it is made available. 

Step 3: Buy Internet Computer 

There are two common ways to buy Internet Computer tokens: 

  • As a market order: This is where you buy ICP instantly at the current market price. 
  • As a limit order: This is where you specify the price at which you want to buy ICP. The trade will only execute when the price drops to this level. 

If you are in a hurry or just don’t know what to do, we recommend buying as a market order, especially now that the price is already too low; there is no need to place a limit order. 

For crypto as new as ICP, experts recommend dollar-cost averaging your investment so that you don’t lose all your money in case of a crash. This is where you buy Internet Computer in an incremental manner. 

For instance, if you want to invest $1,000, you can buy tokens worth $100 10 times in the course of a week or longer instead of spending all the $1,000 at once. This will allow you to study price movement and stop the purchase if you think the price is going against your expectations. 

After buying your tokens, you can now choose one of our three investment options. Let’s quickly go through them below: 

Method 1: HODLNG Internet Computer ICP

This is the most common way to invest in Internet Computer. We recommend hodling if you don’t have the skills or time to dedicate to day trading

Hodling is a buy-and-hold strategy that is derived from the word ‘holding’. With this strategy, you buy ICP then wait for a long time before selling it. The idea is to wait until the price is way higher than the purchase price so that the token is insanely profitable. 

For example, if you buy some ICP tokens now for $110, you can wait until the price reaches $5,000 before selling. This is a good strategy for novice investors who don’t want to be mixed up in the complexities of trading. 

Method 2: Trading Internet Computer ICP 

Trading is a short-term investment strategy. Unlike hodling, you won’t have to wait for many years before seeing some gains. This method is a bit complex and might not be a good fit for novices. 

To be an effective trader, you will need to understand basic trading indicators and factor in a number of signals in order to execute a profitable trade. 

There are also several trading strategies you can capitalize on. Understanding all the trading lingo will take time, but it is worth it. So, if you choose this method, be prepared for a steep learning curve. 

Otherwise, trading is a good strategy since you can gain from either price direction instead of just an uptrend. 

Method 3: Invest in the Underlying Technology

This is a rarely used investment strategy, most crypto investors prefer investing directly in the tokens instead of the underlying technology. 

If you believe that ICP is up to something and want to help it grow faster, you can invest directly in it instead of the tokens. 

This might be more complicated than holding and trading, so we only recommend it for veteran investors. 

Read Also: Pros and Cons of Investing in Internet Computer

Is Internet Computer a Good Investment in 2021?

Based on the short-term price predictions we have looked at, Internet Computer could be preparing for an uptrend that will see it end the year at $300 to $1000. This means that for now, the token could be a good investment. 

If Internet Computer ICP were to be worth over $1000 by the end of the year, as some analysts have predicted, it will be massively profitable for those who are buying at the current price.  Keep in mind that Internet Computer is currently selling at its lowest price since launch. 

There is the possibility of the price going even lower in the course of the year, as Long Forecast has predicted. So, we could also see it end the year on a bearish note. 

Being a new cryptocurrency with limited data on its price behaviour, it is hard to predict where ICP is going next. For now, it is a speculative asset, and although most predictions indicate a bullish momentum going forward, there is the possibility of the price slumping even further. 

So, if you are risk-averse, we recommend taking a pause and study the Internet Computer asset first. It might stabilize or show a fairly predictable trend in the future. When that happens, you can then make an educated decision. 

Based on the current technical analysis, there is a fifty-fifty chance that Internet Computer ICP will close the year on a bullish note. So, if you have to invest, don’t go all the way in. You still need to be careful and wait until you are sure that ICP will make a good addition to your portfolio.

Otherwise, fundamentally, the Internet Computer Protocol has a great team and a solid road map for the future. If you believe that this technology is visionary enough to be useful in the future, you can invest in it. 

The team behind the protocol plans to effect a number of changes going forward. According to the 20-year roadmap, the team plans to introduce ICP and its programming language, Motoko, in schools.  In 10 years, they plan to replace some of the biggest internet ecosystems, and in 20 years, it will hopefully be as big as today’s internet. 

If ICP manages to explore the full potential of its technology, it should be able to significantly boost its price and become one of the most valuable investments. 

In fact, most analyst and experts believe that the biggest price driver for Internet Computer will be its underlying technology. So if you have the means, you can invest in the technology instead of directly buying and hodling or trading the native token. 

Read More: Is Internet Computer A Good Investment And Should I Invest in ICP?

Conclusion: So, Should I Buy Internet Computer? 

Being so new, there is little we know about Internet Computer ICP right now, especially in terms of price behaviour. The price can go any direction. So we recommend waiting if you are not in a hurry to invest. Take some time to study the asset, then decide for yourself if it will be a good addition to your portfolio or not. 

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FAQs

Below are some frequently asked questions about ICP investment. 

Will Internet Computer Reach $1,000? 

When Internet Computer started trading and hit its highest price, most price analysts predicted that it would close 2021 above $1,000. However, after the recent correction, few forecasts are still that optimistic. 

The coin might not reach $1,000 this year at the current rate. So maybe we should expect better numbers from next year. 

Will Internet Computer Reach $500 in 2021? 

There is a better chance of ICP reaching $500 than $1,000 this year. If the coin recovers from its current consolidation, it might go as high as $500 by the end of the year. 

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