The Internet Computer (ICP) is a layer one blockchain protocol that aims to redefine the internet as a decentralized global computing system. ICP allows independent data centers across the globe to work together to form a decentralized alternative to today’s centralized internet cloud providers, such as Amazon Web Services and Google Cloud. 

The network operates on a unique infrastructure composed of "node machines" housed in independent data centers. Unlike traditional Proof-of-Stake blockchains hosted on cloud services, the Internet Computer's node machines form a sovereign network, dedicated to running the ICP protocol. This model, termed "Proof-of-Useful-Work," ensures that the network remains decentralized and resistant to central points of failure. ICP’s flexible architecture allows for a wide range of applications, from social networks to traditional web services. 

According to ICP developers, the protocol holds various advantages over its centralized counterparts, including: 

• Operates on open standards, avoiding potential conflicts of interest by eliminating reliance on major cloud providers.
• Enables the deployment of applications directly onto the public internet in a decentralized manner, encouraging open source and transparent software development.
• Aims to decentralize web hosting, making applications less vulnerable to outages and censorship.

The ICP token serves several critical functions within the ecosystem:

• Governance: Token holders can lock their ICP tokens into the network to participate in the governance and future development of the protocol.
• Network Rewards: Data centers contributing to the network are rewarded with ICP for maintaining good behavior.
• Transaction Fees: ICP tokens are used to pay for transaction fees on the network, facilitating the operation of decentralized applications.

ICP was officially launched in May 2021 by the DFINITY Foundation, an organization founded by Dominic Williams in 2016. Williams has had an illustrious career within the blockchain industry as a crypto theoretician and entrepreneur. He is credited with several scientific discoveries across Threshold Relay and PSC chains, Validation Towers, and the 3 E’s of Sybil Resistance, and more, which have led to new approaches in blockchain technology. 

Risks of ICP

Like an investment in other crypto assets, there are some general risks to investing in ICP. These include:  (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to the Risks Specific to Holding Digital Assets statement.

In addition to these general risks, an investment in ICP is subject to the following specific risks:

• The Layer-1 space is intensely competitive. Several new blockchains continue to emerge which boast high-profile teams, claim unparalleled transaction speed, energy-efficiency, as well as developer-friendly programming languages. Any potential success associated with ICP is reliant on the extent to which the Internet Computer is adopted by enterprises and developers.

We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with ICP. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.

The ICP community and DFINITY founding team are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of ICP have no recourse to the ICP community, DFINITY founding team, or Uphold if ICP declines in value for any reason.

Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.

Uphold’s Evaluation Process

Prior to listing ICP on the Uphold Platform, Uphold performed due diligence on ICP and determined that ICP is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following: 

• The creation, governance, usage, and design of ICP, including ensuring the source code is open-source, audited and peer reviewed, security, and roadmap for growth in the developer community. 
• The supply, demand, maturity, utility, and liquidity of ICP.
• Any marketing materials put forward by the ICP social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
• Material technical risks associated with ICP, including any code defects, security breaches and other threats concerning ICP and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
• Legal and regulatory risks associated with ICP, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of ICP.