Dfinity is the culmination of blockchain technology so far, and then some. It is a completely revolutionary and disruptive invention that will forever change the IT landscape as we know it. Classic blockchain fundraising methods like ICOs make it possible for retail investors like you and I to invest in this project from its infancy. Everything is coming together. What a time to be alive!
What is Dfinity?
Dfinity is a decentralized supercomputer with unlimited capacity and scale, incredibly fast performance and algorithmic governance.
That certaintly sounds great, but what does it actually mean? Let’s break that description down.
- Decentralized. As with Bitcoin or Ethereum, the protocol’s consensus mechanism relies on a multitude of unlinked and unrelated nodes performing calculations independently and reaching the same conclusions. This is the essence of any blockchain project and offers advantages over centralized technology, such as disintermediation, transparency and no central point of failure.
- Supercomputer. In that sense Dfinity is similar to Ethereum, which enhanced the Bitcoin idea of a decentralized ledger by permitting to add code to transactions (“smart contracts”), allowing to store rules and small programs on the blockchain. Like Ethereum, Dfinity is a decentralized Turing-complete computer. But Dfinity’s capabilities are vastly superior (see more below) and it is creating a very simple and accessible programming interface to make it easy for developers to write code and applications onto the network, which means it can ultimately entirely replicate what any normal computer or server is able to do today.
- Unlimited capacity and scale. The project is built from scratch with enormous (even infinite) scale in mind. Almost all existing blockchain platforms have scalability issues and often suffer from clogged networks, as they become victims of their own successes. That’s obviously an issue if like Dfinity you want to run a multitude of huge applications with millions of users on the network seamlessly. The Dfinity team are creating cutting-edge technology from the ground up that will support infinite scale.
- Incredibly fast performance. Finality on the Dfinity network is reached within only 2 blocks of only 0.5sec each, or 1 second total! This compares with Bitcoin at 1 hour and Ethereum at 10 minutes. Dfinity is hence currently 600x faster than Ethereum in reaching finality, and again, that is for an infinite volume of simultaneous transactions. The way Dfinity is achieving such incredibly fast performance is through a novel way of reaching consensus they call Threshold Relay, using technology not entirely dissimilar to DAG consensus mechanisms.
- Algorithmic governance. Unlike “Code is Law” systems such as Bitcoin or Ethereum, the Dfinity network is run by another one of their fantastic inventions: the BNS (Blockchain Nervous System). Essentially, some supernodes called Neurons can run the network like a democracy by casting anonymous votes. If in majority, their power can include freezing, unfreezing and modifying smart contracts or even fully upgrading the network protocol. This is a major improvement to existing code is law protocols, as it for example hinders hacker thefts and renders hard forks (and their controversies) completely obsolete.
To conclude, Dfinity is a truly revolutionizing protocol that is miles ahead of any existing technology and is built with the ambition to really transform IT as we know it. The idea is to ultimately run services such as Gmail or Google web search on the network in a fully decentralized manner. It is widely accepted in the crypto space that out of scalability, speed and security, a blockchain unfortunately has to settle two out of three. Well, Dfinity looks like it will be the first to have it all.
All this sounds extremely (almost too) ambitious, but believe it or not we are actually almost there! This is not just a whitepaper project. The truly outstanding team has been hard at work for many years. The founder and chief scientist, Dominic Williams, is nothing short of a real genius and has been researching the protocol behind Dfinity since 2013. The testnet is ready and the mainnet is scheduled to be launched towards the end of this year. To give you an idea of what the network looks like, how powerful it is and what possibilities it creates, take a look at this truly incredible showcase video.
Remind me, why is it better than Ethereum?
Dfinity is the first real contender to become the Ethereum killer. The DFN network offers significant improvements on existing smart contract platforms, thanks to its novel Threshold Relay finality mechanism (much better performance) and the BNS (much better governance).
The team is not only insanely smart in cryptographic and technological matters, but also extremely business savvy and in a strong strategic move they decided to make Dfinity Ethereum-compatible. That means that any dapps (decentralized applications) built for Ethereum will also be able to run on the Dfinity network! And as the Dfinity network is massively faster and more efficient than the Ethereum network, it’s pretty obvious all ETH dapps will ultimately migrate to Dfinity. This was a strong move by the team, as it will help them dislodge the 800-pound gorilla incumbent.
Tell me more about the team?
The team page speaks for itself. The full-time team consists of 13 crypto scientists (!) and 6 operations guys. On top of that Dfinity has a partnership with the Ecole Polytechnique de Lausanne where at any given time 2 members of the faculty’s Decentralized and Distributed Systems Group work for Dfinity full time. What is remarkable, as you will see on the team page, is that each Dfinity employee is literally the best hire they could have made for that particular job. They are all crypto veterans and have a ton of the most relevant experience in their respective fields. The whitepaper is a reflection of the team’s outstanding quality and scientific rigour and undoubtedly the best whitepaper since Ethereum. What is also nice about the Dfinity team page is that they are not showing any external advisors on the website and not trying to build credibility or momentum that way, unlike virtually every other crypto project.
So what’s up with the current fundraise?
Back in February 2017 when ETH was at $11–12, Dfinity held an under the radar seed round ICO, where 250 lucky investors were able to snatch c. 25% of tokens for a total of CHF 3.9M worth of ETH at the time. Deal of the century! As we know ETH prices have appreciated drastically since, and those seed round proceeds are now worth approximately $40M today.
One year later, in February 2018, Dfinity announced the successful completion of a strategic investment round led by two of the most prestigious funds in the space: Polychain and Andreessen Horrowitz. The foundation raised an additional $21M in exchange for some more tokens. In addition, the two strategic investors committed to fund $40M worth of projects that will run on the Dfinity network. That is truly terrific news for the project, as it will help drive mass adoption through 3rd party dapps and real-world services running on the platform.
The total raised so far is hence $61M in terms of tokens, supplemented with an additional $40M for the ecosystem. The next fundraising event will consist of a public pre-sale, with more details to be announced imminently. Depending on how that round goes, there might then be a final typical ICO round, or this round may be scratched entirely. The hype on the next fundraising round is extremely high with 22k users in the Telegram channel before public pre-sale details have even been announced yet. Many Telegram channels these days pay members to join the channel or do Proof of Care invites to create artificial hype. Dfinity has done none of this. Adjusted for that, DFinity is one of top most popular Telegram channels out there.
This is an incredibly rare crypto opportunity. Projects this good only come once every few years. If you have the opportunity to participate in the next funding round, it’s a no brainer.
Disclosure: I plan on investing in the public pre-sale. I have admin privileges on Dfinity’s Telegram and Reddit channels. Disclaimer: This article is not investment advice. Always do your own research. Do not invest more than you can afford to lose.