The ICON Network, which was established in 2017 by a South Korean blockchain start-up, is a decentralized platform powered by LOOPCHAIN technology and the ICON token (ICX). The Network’s aim is to build a decentralized world where all blockchains, or “communities,” are linked together and can easily exchange currency and information. These include blockchains such as Ethereum (ETH) and Bitcoin (BTC), as well as the entities that use them, including banks, governments, businesses, schools, and hospitals. The ICON Network’s market cap today stands at over $500 million.
How Is the ICON Network Structured?
ICON was developed to overcome the obstacles present with today’s blockchains, and to create a world of true “hyperconnectivity.” In order to achieve this, it runs on a proprietary blockchain called LOOPCHAIN, which can handle hundreds of transactions per second, and employs its ICX tokens to let its community members easily exchange value in real-time. Moreover, its actions are decided by votes from community-selected representatives, thereby ensuring decentralization.
The Basic Structure of ICON
Its basic structure comprises the following components:
- Communities:Centralized businesses, such as the payment system Visa, require individuals and businesses who work with them to follow particular policies. To link these businesses together on the blockchain, the ICON Network allows them to join digital communities (of companies) that operate under the same governance system. Here, they can select and alter blockchains and consensus algorithms to suit themselves, and even create their own coins. These communities are formed around the world in various fields, such as finance, public services, logistics, healthcare, IoT, renewable energy, manufacturing, and e-commerce. Most tasks are carried out through smart contracts, thus slowly eliminating the role of many centralized agencies and intermediaries in each field. Each community selects representatives (C-Reps) based on trust as well as their contributions.
- ICON Republic: Externally, communities can link to each other through ICON Republic, which is governed by the C-Reps votes, and is thus decentralized. This system lets the communities maintain their autonomy, but facilitates the processing of real-time transactions through a consensus algorithm. In this way, various communities, both in the real world and crypto world, are linked through a decentralized exchange (DEX). ICON Republic does not interfere with community governance, but it does work with the issuance and rewards policies of the ICON Exchange Token (ICX).
- ICON Exchange Token (ICX): ICX is the currency employed for ICON applications, and is used for sending or receiving payments on the blockchain, or paying for ICON transactions. The ICX token allows the communities to join at a central point, enabling smoother operation. It is also used as a staking token. As an ICONist (all users, stakers, and delegators of the ICON Network), an individual is able to stake tokens and receive rewards in the form of more ICX tokens. However, it is different from the Proof-of-Stake system, rewards are given based on an ICONist’s contribution, and reliability in the network. This is regulated by the Delegated Proof-of-Stake (BFT-DPOs) and Delegated Proof-of-Contribution (DPoC) protocols. In this way, ICONists build their own credibility and worth as well as the network’s. Moreover, ICON’s offering of one of the highest rewards for blockchain staking is sure to incentivize these behaviors and grow the network.
The expectation is that as communities increasingly use smart contracts to maximize working efficiency, their internal processes will evolve. Additionally, as interactions with the outside world increase, exchanges between communities will also change. When this happens, rather than handling external affairs through a centralized institution, each community’s smart contract will become the subject of the transaction, and the connection between the smart contracts will handle the work.
ICON’s vision for the future of business: inter-community interactions through blockchain technology (Source: ICON Foundation Whitepaper)
This simplified breakdown shows the ICON Network’s aim to facilitate connection across borders and to create a more democratized process.
Who uses ICON Crypto?
Each ICON community’s ability to create its own blockchains and coins has spurred entrepreneurship in various fields:
- Finance: The “Korea Financial Investment Consortium” community, which is backed by 25 securities firms, has developed a service called Chain ID. This service can securely authenticate and generate verifying digital signatures without needing third-party oversight. In this way, bureaucratic backlogs within companies are bypassed, which saves time and up to billions of dollars a year.
- Insurance: Major insurers and hospitals in South Korea have launched a pilot to automate the insurance claiming process, and to exchange medical records and patient authentication through the blockchain without intermediaries.
- Education: In 2017, a university coin (U-Coin) was launched in major Korean universities. The coin can be spent on campus and in nearby student areas, primarily in vending machines. Although currently on a small scale, the introduction of a functional cryptocurrency to student populations could be the start of something big.
- Healthcare: The Precision Medical Hospital Information System (P-HIS), which incorporates major hospitals in South Korea, is designing a secure method that uses blockchain technology to exchange medical data within the sector and on a global scale. Here, blockchain technology works to resolve improper disclosure and usage issues by ensuring interoperability among different hospital systems as well as reliable management with regard to data access rights.
- Personal Information Security: ICON’s Decentralized ID (DID) stores digital identification information such as driver’s licenses and entry cards on a secure decentralized system. DID applications allow users to access their own identification data through a smartphone or other similar devices. This ensures better security since data that is stored on a central server is vulnerable to cyber-attacks.
Who Is Behind ICX?
Korean-American entrepreneur and investment banker Min Kim is the brains behind ICON. Using his South Korea-based fintech company, DAYLI Financial Group, Kim reached out to another South Korean blockchain company, ICONLOOP, for help creating the network and making it available for cross-chain operations. An advantage of working with ICONLOOP was its close connection to the South Korean and Seoul Metropolitan Governments, for whom it develops public and private blockchain solutions.
ICX Price History
The initial coin offering (ICO) for ICX in September 2017 raised roughly $43 million in its one day of sale. Coins were priced at around $0.50, and 50% of the supply was sold. The ICON blockchain was then officially launched in January 2018, and participants in the ICO received their ICX cryptocurrency in June 2018.
The token enjoyed a rapid surge during the late 2017 and early 2018 bull run, rising to $12.19 in January of that year. However, thanks to the Great Crypto Crash of 2018, it did not stay there long. Alongside the whole crypto market, it found itself plummeting to lows of $1.96 in March, and after a momentary rise, all the way down to $0.59 by September.
ICX price performance from Jan 2018 to July 2021 (Source: CoinMarketCap)
Compared to its counterparts, ICX sees less investment, possibly due to its long and fairly stable stretch between late 2019 and early 2020, where it largely traded between $0.30 and $0.50. However, the token has seen a little more movement this year, rising with crypto’s general uptrend and falling after major announcements from Elon Musk and the Chinese government. ICX reached a high of $3.12 at the end of March, possibly helped by the success of its DID DApp, and then dropped in value. Today, one ICX coin is worth $0.79. The token has a total supply of about 800 million, and a circulating supply of 640 million.
Despite lower investments in ICX than in some similar cryptocurrencies, the ICON Network has a lot to offer and a lot in the pipeline, which could suggest a rise in the future. In addition, its blockchain technology has received considerable backing from powerful sponsors. For example:
- The university U-coin project has received a grant from Korea’s Ministry of Creation and Science, and is planning to expand to more Korean universities.
- The insurance pilot scheme has received a grant from Korea’s Ministry of Science, ICT and Future Planning. It is also expected to gain further momentum by adding more products, and inviting other insurance providers to the consortium.
- LOOPCHAIN is the Seoul Metropolitan Government’s blockchain platform of choice.
This backing by governmental institutions will certainly set the ICON Network and its token in good standing with prospective users. However, with its usage currently being very South Korea-centric, its value might not change dramatically unless it sees international expansion.