What Is ICON Cryptocurrency?
ICON is a blockchain technology and network framework designed to allow independent blockchains to interact with each other. ICON is supported through a cryptocurrency token, called ICX.
Understanding ICON Cryptocurrency
ICON is a South Korean-based company that developed a blockchain technology and accompanying cryptocurrency token called ICX. The company bills itself as an interconnected blockchain network, allowing participants in a decentralized system to “converge” at a central point. This is done by connecting a community to other communities through ICON Republic and Citizen Nodes.
While blockchains are most commonly associated with cryptocurrencies, enthusiasts point out other areas where the technology can be applied. Any exchange of information can technically be added to a blockchain, though adding some types may not be cost-effective. Transactions involving securities, currencies, business contracts, deeds and loans, intellectual property, and personal identification could be “tokenized."
Blockchains, by default, are managed by a particular network, and connecting different blockchains has not been possible. ICON is an attempt at such a connection
Centralized payment systems, like Visa, require businesses to adhere to policies and guidelines that they developed. By allowing individual communities to retain control of their own policies, ICON seeks to reduce potential friction points to adoption.
Communities are connected to the ICON Network through a decentralized exchange, which allows for the maintenance of a verified ledger shared within the community network itself. This reduces the need for third parties, which can reduce transaction costs.
A Community Comprised of a Network of Nodes
ICON considers a community to be a network of nodes that follows a single governance system. Bitcoin, Ethereum, and other cryptocurrency networks are considered communities. So are banks, businesses, hospitals, schools, and governments. Communities can have different governance structures, numbers of nodes, and characteristics.
Communities vary in their approaches to decision-making, with the approach managed by “Community Nodes.” Communities such as Bitcoin take a consensus-driven approach, while communities such as financial institutions follow a hierarchical approach.
ICON refers to decision-makers as Community Representatives, with Community Representatives also having a say in how the community interacts with the ICON Republic.
The ICON Republic connects different communities. ICON Republic governance is determined by the votes of Community Representatives, but the actions of the ICON Republic do not determine the governance of the separate communities themselves. The ICON Republic does, however, allow for the issuance of the ICON Exchange Token, called ICX. Non-Community Representatives, such as interested individuals, can participate in the ICON Republic, but do not have voting rights.
ICON uses the concept of a loopchain to connect communities that are part of an ICON Republic. These communities, referred to as a consortium, determine a common set of rules that allow different blockchains to work together.
Each community’s blockchain is linked through the Community Representative to the ICON Republic, with the blockchain of the ICON Republic referred to as the “nexus.” The rules covering how the independent blockchains interact with the nexus is called the Blockchain Transmission Protocol, or BTP.
For example, a blockchain consortium of banks creates standards on how smart contracts can be authenticated without the need of third-party oversight. As the parties of each smart contract adjust, transactions are added to each community’s blockchain.