A new cryptocurrency called Internet Computer made a splashy debut this week, becoming one of the largest digital coins after its value skyrocketed to $45 billion.
The coin, developed by the Dfinity Foundation, a nonprofit in Zurich, Switzerland, is a competitor to other hot cryptocurrencies like Ethereum and Bitcoin. Internet Computer debuted at a price of $731 on Monday then dropped to $146 within minutes before rebounding somewhat. Two days later, the coin was priced at about $280, down 60% from its big debut, but still with a total market capitalization of $34.6 billion.
For reference, Bitcoin is valued at $53,180, with a market capitalization of $988.9 billion, and Ethereum is priced at $4,095 and is valued at $470.7 billion.
“There has been a parabolic rise of Internet Computer,” said Linda Kreitzman, assistant dean at University of California at Berkley’s Haas School of Business who helps oversee the Berkeley Haas Blockchain Initiative. “But the broader ramification is that money is flowing into the crypto market and there’s a mass adoption of crypto.”
Internet Computer is just the latest cryptocurrency creating buzz. Just a few days ago it was Dogecoin, boosted by Tesla CEO Elon Musk. Here’s what we know about Internet Computer.
What is Internet Computer?
Internet Computer is a digital token that runs on its own proprietary protocol called Internet Computer Protocol, which is supposed to let anyone build software or publish content on the Internet without using services from big companies like Amazon, Google, or Facebook. The protocol, according to Dfinity founder Dominic Williams, provides a “hackproof platform,” reduces costs “dramatically,” and is interoperable. He also says that the protocol is intended to make the Internet “fun again,” by allowing people to build a “new open Internet” and give users a “better deal.”
The idea is similar to other blockchain cryptocurrencies that use smart contracts, or computer codes that serve as a kind of agreement between parties, to exchange currencies.
Where did the cryptocurrency come from?
Dfinity was founded in 2016 by Williams, a serial entrepreneur and Dfinity’s chief scientist. It has 188 employees in the U.S., U.K, Japan, and Germany, and three research centers in Palo Alto, Calif., San Francisco, and Zurich. The startup’s goal is to reinvent the Internet “as a computer that hosts secure software with superpowers,” or basically create a more open Internet that lets more people build on it and reverse “Big Tech’s monopolization.”
Dfinity is backed by investors including Andreessen Horowitz, Polychain Capital, Amino Capital, Aspect Ventures, and Eterna Capital.
Why is Internet Computer hot?
Internet Computer boasts both a big team and big investors, a sort of seal of approval that makes it more attractive to cryptocurrency buyers. But beyond that, it’s just the new toy for a growing number of enthusiasts to play with and it has a “cool name,” Kreitzman said.
“The timing plus the name choice have created the perfect situation for an explosive debut,” she said.
But Kreitzman said it’s still too early to fairly judge Internet Computer and its protocol. “I don’t think anyone can tell in just two or three days.”