The rise and fall of Internet Computer: How ICP imploded

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  • Internet Computer is a major blockchain project valued at over $1 billion.

  • ICP’s token has slumped by over 95% from its all-time high.

  • Its ecosystem is a bit weak to justify a billion-dollar valuation.

Internet Computer has had a spectacular fall from grace in less than two years. ICP, its token, has crashed by more than 98% from its all-time high. Its total market cap has plunged from over $100 billion in May 2021 to about $1 billion. So, what went wrong?

What is Internet Computer?

Internet Computer is a blockchain project that was launched by Dfinity, a Swiss non-profit organization in 2021. Its launch came at a time when most cryptocurrencies, including Shiba Inuwere being launched. As a result, because of the hype surrounding the token, the price surged, pushing it into the top ten of the biggest coins in the world.

Internet Computer is one of the best-funded projects in the blockchain industry. According to Crunchbase, Dfinity raised over $166 million from a group of investors like Andreessen Horowitz and Polychain Capital. At the time of listing, their investments had ballooned into billions of dollars. 

Internet Computer’s goal was to create a blockchain-based supercomputer that runs in a decentralized way. At the time of launch, the Financial Times claimed that the technology would disrupt cloud computing giants like AWS and Google Cloud.

For example, developers would use its technology to build blockchain-based apps that are equivalent to popular ones like Whatsapp and Venmo. 

Why Internet Computer failed

Most people who follow the crypto space believe that Internet Computer has not lived to the hype it expected when it was launched. This explains why the ICP price has struggled since its inception. Unlike other popular blockchains like Ethereum, Polkadot, and Binance Chain, it is not possible to see what is built in Internet Computer.

Internet Computer has several apps in its ecosystem. But a deep dive shows that some of them are no longer in development while others have little or no activity. For example, OpenChat is a platform that seeks to be a blockchain-based alternative to Whatsapp. I tried to create an account but the process was long and I received a notification that they were no longer accepting new members.

I also attempted to use DSCVR, a community-owned professional network that looks like Reddit. I tried using it but found no meaningful content. The same was true for other dApps in its ecosystem like DFinance, Portal, and NFT Studio.

Internet Computer is not dead. A look at its explorer shows that there is still some activity in the ecosystem. The question is whether that activity is worth over $1 billion as ICP’s market cap suggests.

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