What is Icon?
Icon is a unique blockchain design that was developed to act as a “network of networks.” It features “multi channel functionality,” meaning different types of information or data are transmitted simultaneously through the network. Icon offers improvements on bitcoin by providing faster transaction times, an increased network capacity, the use of highly-customized smart contracts and advanced API functionalities. Instead of using a miner reward incentive that normally acts as a blockchain security mechanism, Icon is secured by a classical model of consensus algorithms, employing a Delegated Proof of Stake (DPOS) system (known as the LFT algorithm) to maintain the blockchain.
History of Icon
Icon was developed in 2017 in South Korea, inspired by the idea of a “world with no center point and (a) world where any point is a mere connection to other points.” Money to finance the project and the Icon Foundation was raised through South Korea’s biggest ICO launch at the time, which raised approximately $44 million in 2 weeks. Trading for ICX opened in October 2017. Icon soon formed partnerships with businesses in several different industries and was ranked as a top 20 cryptocurrency by market cap a mere three months later.
How Icon Works
Icon uses a novel algorithm called LFT to secure new blocks, which is somewhat like Proof of Stake (PoS) models. There is a total of 400,000,000 ICX coins. The ICON Network blockchain, known as the Nexus, consists of 5 different “channels” or layers of data:
- Decentralized Exchange
- Public Channel
- Notary Channel
- Reserve Channel
- Representation Channel
The bottom layer of the network incorporates data from the other channels and is known as the loopchain. The Representation Channel allows for votership that determines the governance of Icon. The Reserve Channel creates new ICX in return for bonds issued by participating nodes. The Notary Channel connects transactions from other blockchains linked to the Nexus. The Public Channel facilitates transactions using ICX and interactions with dApps. The Decentralized Exchange allows the trading of ICX for other cryptocurrencies through rates developed by the network.
Icon applies individual governance systems to 4 distinct types of nodes, which are all interconnected through the ICON Republic. Each node type has different roles, capacities, and access levels. At the base level, Community Nodes are governed by rules specific to their community. These rules are voted upon by Community Nodes, and the results of the vote are enacted by a C-Node, which acts as a master node for the community. C-Rep Nodes are voted upon by the community and elected to communicate information about the community to the ICON Republic. Along with C-Rep Nodes, Citizen Nodes comprise the ICON Republic. Anyone can run a Citizen Node and dApps related to the main blockchain, but this does not necessarily mean they have the right to vote on governance of the ICON Republic.
- Connects businesses and transactions on a transparent, decentralized network
- Reduces business costs through the lack of 3rd party intermediary use
- AI software architecture allows for self-governance, network voting system
- All inclusive, open-source design allows for integration with pre-existing blockchains
- Built for large scale use to keep it competitive with pre-existing alternatives