Internet cloud economics
The Internet Computer is a decentralized network. The ICP token moves financial value from those hosting onchain apps, to the network's node providers and governance participants, enabling it to function as an economic entity without an owner or controller.
Network tokenomics
The ICP token and cycles
The ICP token derives value from current demand for internet cloud, and expected future demand. Onchain apps are powered by "cycles," a digital fuel created by transforming ICP tokens, which computation causes to be burned, creating a deflationary pressure. The network mints new ICP to reward "node providers" whose hardware hosts the network, and those staking ICP to participate in network governance, creating an inflationary pressure. Although internet cloud is still a new paradigm, the balance has already tipped deflationary several times. ICP is also used as a cryptocurrency.
Cloud products deploying to ICP often ask for credit card payments, but the underlying decentralized network is powered by a token economy…
Key uses of ICP tokens
Currency token
Use the ICP token as a digital currency in your fully onchain apps and DeFi. ICP tokens can be transferred in less than a second at near zero cost. ICP is supported by nearly all major exchanges worldwide.
Power onchain apps
Convert ICP tokens into the cycles that power onchain apps. ICP tokens worth 1 XDR produce 1 trillion cycles, with apps working like electric cars: they run until their cycles are exhausted, at which point they must be charged with more.
Network governance
Create voting neurons and stake your ICP tokens inside to participate in the network's governance, and increase your neuron's "maturity" through voting, which can later be used to generate new ICP tokens.
Node provision
Become a "node provider" by owning and operating special node machine hardware in data centers, which the Internet Computer network combines to provide internet cloud — and get paid via ICP tokens in constant value terms.
The genius of 'reverse gas'
On traditional blockchains, a "transaction" typically sends cryptocurrency, or executes a token swap, and they are crafted using wallets that include a "gas" payment for the computation that will be performed. On the Internet Computer, however, each computation performed by a hosted app, such a message being sent by the user of a chat app, is a transaction. In fact, even the serving of web assets is a kind of transaction. These kinds of transactions happen transparently, and users cannot craft them themselves and add payment. ICP solves this using a system called "reverse gas," where the onchain software that powers apps pays for its own computation from a balance of cycles maintained in the manner of an inbuilt battery that can be recharged.
Reverse gas
Internet cloud enabled
Stable compute costs
Cycles have constant value
Deflationary
At scale, ICP supply falls
Sovereign
True decentralization
Obtain ICP tokens
Coinbase
Buy, sell, and store ICP tokens on one of the world's most trusted cryptocurrency exchanges
Binance
Trade ICP tokens on the world's largest cryptocurrency exchange by trading volume
Kraken
Access ICP tokens through Kraken's secure platform with advanced trading features
Revolut
Buy and hold ICP tokens directly from your Revolut app alongside traditional currencies
A self-sustaining network economy
The Internet Computer is created by Internet Computer Protocol (ICP) combining node machines into a secure decentralized network that provides internet cloud functionality, but it persists because of the tokenomics created by the ICP token hosted within the protocol. Numerous innovations such as reverse gas, and Https Outcalls that allow the protocol to query external prices via consensus and provide cycles and thus compute at constant cost, make the Internet Computer possible and self-sustaining.