Crypto Expert Slams ICP: Is the Internet Computer on the Brink of Collapse?

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Regardless of criticism from a well-known cryptocurrency analyst, the token of the Internet Computer stayed within a narrow band on Friday.

The Internet Computer token (ICP) was currently trading at $11.18, representing a 93% increase from its 2024 low. Despite this rise, the token’s value in 2024 remains unchanged compared to the same period earlier in the year. This is noteworthy because other well-known cryptocurrencies such as Bitcoin (BTC) and Ripple (XRP) are approaching their record highs, maintaining a steady hover near those peaks.

Despite Justin Bons, the renowned crypto analyst and portfolio manager, voicing his criticism on its technology, the impact on ICP remained relatively consistent.

In a lengthy discussion about X, Bons contended that the Internet Computer network is both centralized and insecure. Bons’ initial point was that the Internet Computer relies on at most 40 separate subnetworks, each handling its own security. However, networks like Avalanche (AVAX) and Polkadot (DOT), which employ similar technology, have subnetworks that share security, making them more secure.

As per Bons’ explanation, ICP’s vulnerability stems from the fact that it publicly discloses the locations of its data centers, making them susceptible to potential cyberattacks.

1/31) Centralized and insecure, ICP poses a risk! You can potentially take down ICP by targeting just 40 nodes located in specific data centers.

2/31) While ICP promises grand things, it lacks uniqueness in its offerings.

3/31) Scalability without decentralization is futile; the modular design of ICP is the root cause of its issues.

— Justin Bons (@Justin_Bons) January 17, 2025

Bons expressed his disagreement with Internet Computer’s assertion about limitless scalability. His reasoning was that, because all subnetworks need to interact with each other, the network’s scalability is not boundless.

A point Bons made questions the assertion by ICP that they’ve resolved the oracle problem with HTTP outcalls, a method enabling smart contracts to pull data from Web2 APIs. However, he thinks this strategy is questionable due to its dependence on centralized resources.

It’s plausible that these criticisms are the reason Internet Computer hasn’t performed as well as other blockchains in the cryptocurrency sector. For example, Internet Computer (ICP) currently supports only a few DeFi applications, with a combined value locked at approximately $41 million. Furthermore, its stablecoins market capitalization stands at around $5 million, where Tether makes up about 66% of that total amount.

ICP price analysis

In the past few days, the daily graph indicates a minor increase in Internet Computer’s price, mirroring a general uptick among most cryptocurrencies. Following the formation of a double-bottom chart pattern at $9.33, ICP’s price has surged. This bullish reversal pattern is marked by two troughs and a horizontal line, with ICP’s neckline resting at approximately $12.72.

The token’s position now surpasses both its 200-day moving average and the halfway point of the Fibonacci retracement line from before. Moreover, it has exceeded an upward trendline that links the most recent low points dating back to November last year.

As an analyst, I’m optimistic that a breakout for ICP may be on the horizon. This bullish trend would be solidified if the price surpasses the double-bottom’s neckline, currently situated at $12.72. If this happens, it could potentially set off a rally towards the next resistance level, which coincides with the price reached in November at around $15.60.

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2025-01-17 22:43