Since the idea of blockchain emerged as a result of the increasing popularity of cryptocurrency projects, several industry players have tried to deploy the technology in different use cases. The decade that has followed has seen blockchain and distributed ledger technology (DLT) being applied to multiple sectors of the global business process.
With this explosion of blockchain-based projects has come the added disadvantage of users — a percentage of whom are not tech-savvy — having to navigate different applications, services, and programs. Within this expanding ecosystem, the global business process can appear to be even more disconnected, a situation antithetical to the core ethos of decentralization.
ICON as a blockchain network in its own right rather than satisfying a market niche created its infrastructure as a bridge between decentralized projects. By linking blockchain together and creating an interconnectivity matrix for DLT-protocols, users can begin to enjoy full-spectrum products and services delivery across multiple industry verticals.
A blockchain bridge also helps to usher in much-needed consistency into the blockchain space, making it easy for users to migrate among different systems. Rather than having to learn a completely new set of protocols, users need only interface with the ICON platform and enjoy benefits across a multitude of DLT applications.
Primer on ICON Ecosystem
As previously stated, ICON is envisioned as a blockchain that connects other blockchains — a “network of networks” — not unlike the way the internet acts an interface for connecting millions of computers and nodes across the world. In the ICON ecosystem, the internet analog is the Nexus — a multi-channel blockchain comprised of other blockchain networks usually in their “lite client” implementation.
The lite client implementation is a version of a network stripped to its bare essentials as a way of reducing bandwidth requirements. With the ICON infrastructure designed to act as a network of networks, connecting lite client blockchains help to improve overall efficiency.
Each blockchain connects to the ICON Nexus via Portals which are akin to the usual nodes found on a typical blockchain setup. With different blockchains looped around a core Nexus network, it is more accurate to describe ICON as a “loopchain” rather than the usual blockchain configuration.
Like the SWIFT network that allows communication between banks from different countries, Portals allow blockchain networks to interface via a Blockchain Transmission Protocol (BTP). All Portals are not alike as the consensus mechanism for each participating blockchain determines whether a Portal will have a single node or multiple nodes.
In summary, the ICON ecosystem comprises Community, C-Node (Community Node), C-Rep (Community Representative), ICON Republic, and Citizen Node (C-Nodes). The community is a collection of nodes with similar governance protocols. The presence of communities allow ICON to create an agile interface for projects within a specific business process, for example, healthcare, insurance, e-commerce, etc.
The set of communities in the ecosystem form the ICON Republic. Within the ICON Republic are C-Reps and Citizen Nodes. C-Reps vote on transaction verifications while Citizen Nodes generate transactions.
Consensus and Governance Mechanisms
Since the configuration is a loop, the attendant consensus mechanism for ICON is Loop Fault Tolerance (LFT). With ICON acting as a network of different blockchains with diverse consensus mechanisms, LFT offers a robust solution to the attendant “Byzantine General’s Problem.”
In simple terms, this problem describes a situation where the siege of a castle is at a stalemate and the only chance of victory is through a coordinated simultaneous attack from all directions. The trouble is that the General of the assailing army has to convey the attack to all his men of whom some are traitors. So, how does the General weed out the loyal soldiers from the traitors?
Connecting different blockchains increases the likelihood of rogue actors looking to carry out malicious intentions. LFT acts as a High-Performance Byzantine Fault Tolerance (PBFT) algorithm that minimizes the communication overhead that results from processing input from multiple interconnected blockchains, some of which contain malicious artifacts.
As a network of networks, ICON invariably proceeds via indirect democracy; ICON’s governance protocols do not supersede those of the individual blockchain. Representatives from each blockchain connected to the ICON loopchain vote on protocol-level upgrades and policies. All the representatives present in the ICON loopchain form the Representation channel.
ICX is the native token on the ICON ecosystem with a total supply of 800,460,000 tokens and it enables payments, smart contract creation, and cross-chain communication. Theoretically, ICX can act as a bridge currency, allowing holders to transact between two different cryptocurrencies via an exchange rate.
Indeed, this unique feature of the ICX tokenomics is supposed to be a testament to ICON’s role as a hyperconnectivity platform with which users can transfer value between different blockchain system. With the launching of its native wallet ICONex back in 2018, the project developers also introduced another useful solution to a major problem preventing widespread crypto adoption; difficult to remember wallet addresses.
ICONex allows users to create human-readable wallet IDs akin to email addresses or chosen nicknames used on social media platforms. These easy to remember nicknames can be used instead of the usual long text string addresses.
Newly minted ICX tokens are distributed to C-Reps based on I_score — ICON Incentives Scoring System (IISS) — an artificial intelligence (AI)-based scoring system. Based on the protocol’s baked into ICON’s governance, I_scores are updated after every 1,296,000 blocks. I_scores act as incentives within the ICON domain, enabling the distribution of ICX as rewards to C-Reps who meet the minimum requirements.
As previouslyby BTCManager, ICON has recently upgraded its consensus mechanism with the launch of Loop Fault Tolerance 2.0 (LFT 2.0). According to the project at the time of the launch, LFT 2.0 improves ICON’s blockchain interoperability by allowing smart contract deployment and implementation.
Like its predecessor LFT2 is based on PBFT but includes faster block times and enhanced network latency which translates to additional scalability and security improvements. LFT2 is also considerably more lightweight and more agile than LFT1.
The South Korean project has also in recent times attracted a slew of partnerships and collaborations with establishments like. ICON is also looking to its reward distribution system to promote collaboration among network validators.