New crypto worth $58b after debut

A new cryptocurrency, called “internet computer”, is already valued at $58 billion after only launching on Saturday.

It shot straight up to the eight largest cryptocurrency based on market capitalisation, according to data from CoinMarketCap.com, stunning a number of analysts within the industry.

Internet computer joins a number of new players, including shiba inu coins and safemoon, as others like dogecoin which was recently discussed on US comedy show Saturday Night Live.

Currently, an internet computer token is selling for $366.94, although the price did spike at just under $1000 at one stage.

There were 125,000 people that registered for its Saturday launch party, which was livestreamed and included speakers and giveaways.

The total market value of all cryptocurrencies now stands at $US2.48 trillion ($A3.2 trillion), up from almost $US1 trillion ($A1.29 trillion) at the beginning of the year.

So what is this latest cryptocurrency to storm the stage?

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Who created it?

It’s been developed by Zurich-based non-for-profit organisation, Dfinity for the past five years and led by a British computer scientist called Dominic Williams, who has a team of 188 computer engineers, cryptographers and operational experts working on the project.

Mr Williams said the project will let developers abandon traditional IT and big tech giants like Amazon and Facebook and instead rely on a seamless network of computing power from independent data centres around the world.

The idea is to avoid corporate-driven platforms and reduce costs, he said.

How does it work?

It’s got a bold aim – to completely reinvent the public internet. It has been created to give software developers or content creators the ability to publish anything they want on the internet, without having to use Amazon, Facebook or other servers.

It could mean users build their own social media and other services that compete with the tech giants.

Internet computer would then host data and software, creating a global computing platform.

“Using the internet computer, developers can create websites, enterprise IT systems and internet services by installing their code directly on the public internet and dispense with server computers and commercial cloud services,” the Dfinity Foundation said on its website.

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Could it revolutionise internet security and do away with passwords?

That’s a big call, but it reckons it can.

One development that is being touted is internet computer’s ability to securely manage user identities on certain apps without usernames, passwords or cryptographic keys.

“I want you to imagine a world where you can securely authenticate yourself to online services without ever touching a username and password, or touching cryptographic key material, using just your devices,” said Mr Williams told Business Insider.

“I want you to imagine a world where you can log into internet services without ever being tracked across internet services. And I want you to imagine a world where this is happening at a far greater degree of convenience than any kind of authentication service that you use today.”

What’s the Aussie connection?

Melbourne-based crypto fund Apollo Capital have invested in the project and said it sees great potential for it.

Overall, the internet computer has raised more than $US166 million ($A214 million) from investors, according to Crunchbase.

How does the coin work?

The token can be used to pay for internet computer’s computing services and will also give holders a vote on governance proposals to improve the network.

It’s been claimed it sets to rival cryptocurrency ethereum, which uses similar systems to operate and is currently the number two ranked digital coin behind bitcoin.

Coindesk said internet computer offers “multiple ecosystems”, including a decentralised finance exchange, a professional social network, infrastructure to decentralise the web and a provenance platform for luxury goods to name a few.

Its tech could also be used for e-commerce with claims it has a more scalable method of verifying transactions in just one to two seconds.
 

What’s the long-term vision for internet computer?

In 20 years, the open internet envisioned by the cryptocurrency will be significantly bigger than “big tech’s closed proprietary ecosystem”, which will be in “terminal decline”, according to Mr Williams.

“Much of our crucial global society’s information infrastructure, systems and services will now be running on the open, unstoppable, and tamperproof internet computer blockchain network,” he said.

“This will bring about profound transformations in how things work, and support an unimaginably richer internet ecosystem that incorporates more innovation, collaboration and dynamism that drives positive economic growth around the world.”

What are the risks of investing in cryptocurrency?

The UK’s financial watchdog has issued a stark warning about cryptocurrency, due to concerns around consumer protection, price volatility, product complexity, charges and fees, and marketing materials.

“If consumers invest in these types of products, they should be prepared to lose all their money,” the UK Financial Conduct Authority said.

There is no guarantee that cryptoassets can be converted back into cash, the regulator also cautioned.

“Converting a cryptoasset back to cash depends on demand and supply existing in the market,” it said.

Here are the top concerns:

Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.

Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.

Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.

Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.

Marketing materials: Firms may overstate the returns of products or understate the risks involved.