ChatGPT claims ICP is not 100% on chain

internet-identity
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To clarify. My focus for this question is on correcting ChatGPT in case it is wrong, not attacking ICP :pray:

Here is the answer to “is ICP 100% on chain”:

The Internet Computer (ICP) is not 100% on-chain. While it aims to provide a decentralized and scalable infrastructure for running applications and services entirely on-chain, certain components and mechanisms of its ecosystem involve off-chain processes and elements. Here are some key points to understand about ICP’s on-chain and off-chain aspects:

On-Chain Aspects of ICP

  1. Smart Contracts (Canisters): ICP runs decentralized applications and services using canisters, which are a form of smart contracts that execute on-chain. These canisters handle computations and data storage on the blockchain, making the core functionality of many applications fully decentralized.

  2. Network Nervous System (NNS): The NNS is an on-chain governance system that manages network parameters, upgrades, and decision-making processes. It ensures decentralized control and operation of the network.

Off-Chain and Hybrid Aspects

  1. Data Availability: While computations are performed on-chain, ICP relies on various data availability strategies that may involve off-chain components to ensure efficiency and scalability.

  2. Consensus Mechanism: ICP uses a novel consensus mechanism that combines elements of both traditional blockchain and newer distributed computing technologies. Some aspects of state synchronization and data propagation may involve off-chain processes to optimize performance.

  3. Integration with Other Systems: ICP interacts with other blockchain networks and traditional internet services, which inherently involves off-chain communication and data exchange.

Conclusion

While ICP strives to maximize on-chain functionality for applications and governance, it utilizes a combination of on-chain and off-chain mechanisms to achieve scalability, efficiency, and integration with broader digital ecosystems. Therefore, it cannot be considered 100% on-chain in the strictest sense.

My question is, why does ICP claim to be 100% on chain if it is not or how is ChatGPT wrong and, in that case, how can it be be corrected?

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My original question to ChatGPT was which blockchains run 100% on chain and I was shocked it only listed 4 and not ICP:

Thank you for clarifying. Let’s focus on whether there are any blockchains that process all their transactions entirely on-chain, without relying on off-chain or Layer 2 solutions.

Examples of 100% On-Chain Blockchains

  1. Bitcoin (BTC)

• Nature: Bitcoin processes all its transactions on-chain. Each transaction is recorded on the blockchain, which miners validate and add to the block.

• Limitations: Scalability issues are significant, with a capacity of about 7 transactions per second (TPS). The Bitcoin network relies on its core on-chain processing, but scalability solutions like the Lightning Network are off-chain and used to improve transaction speed and reduce fees during peak times.

  1. Monero (XMR)

• Nature: Monero, known for its privacy features, handles all its transactions on-chain using ring signatures, stealth addresses, and confidential transactions.

• Limitations: The privacy features require significant computational resources, which can impact the network’s performance and scalability.

  1. NANO

• Nature: NANO uses a block-lattice architecture where each account has its own blockchain, allowing for asynchronous transaction processing on-chain.

• Limitations: This unique design supports high-speed transactions but can be complex to integrate and use, potentially affecting widespread adoption.

  1. Ravencoin (RVN)

• Nature: Ravencoin focuses on the issuance and transfer of assets, with all transactions occurring on-chain.

• Limitations: Similar to Bitcoin, Ravencoin may face scalability issues as transaction volumes grow.

Characteristics of 100% On-Chain Blockchains

• Transparency: Every transaction is recorded on the blockchain, making the transaction history transparent and immutable.

• Security: On-chain processing benefits from the blockchain’s security mechanisms, such as consensus algorithms and cryptographic techniques.

• Decentralization: By processing transactions on-chain, these blockchains maintain a high level of decentralization.

Challenges

• Scalability: On-chain processing limits the number of transactions per second the network can handle. High transaction volumes can lead to congestion, slower transaction times, and higher fees.

• Efficiency: On-chain networks can be less efficient compared to those using Layer 2 solutions, as they need to process every transaction within the blockchain’s constraints.

• Innovation: While fully on-chain models offer security and transparency, they may lag in adopting new technologies aimed at improving scalability and efficiency.

Conclusion

While some blockchains aim to keep all transactions on-chain, this approach often comes with significant trade-offs in scalability and efficiency. To address these issues, many blockchain projects adopt hybrid models, leveraging off-chain solutions to enhance performance while maintaining core transactions on-chain for security and transparency. Examples of 100% on-chain blockchains include Bitcoin, Monero, NANO, and Ravencoin, each with its own set of advantages and limitations.

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To clarify. My focus for this question is on correcting ChatGPT in case it is wrong, not attacking ICP :pray:

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I think ChatGPTs lack of specificity is largely a reason why these statements shouldn’t be taken at face value. I don’t think anything a LLM says, while impressive, should be taken at face value.

The above point basically just says because other blockchains are not 100% on chain and ICP interacts with them this makes ICP not 100% on chain which I believe is unfair. Also it is basically saying because DFINITY has not spun up it’s own satellite for ICP to exist on it is not 100% on chain which I believe is also unfair.

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Excellent answers; thank you.

Why does it then consider BTC to be 100% on-chain? Is it just because BTC is inherently much more limited in use and requires third-party solutions to do anything other than being a blockchain?

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ChatGpt is only as accurate as the information that it’s trained on. And from there we have a ‘black box’ problem involving not knowing about its training - its knowledge base and how it arrived at its conclusion.

I asked ChatGpt about ICP and here’s what I got:

Agnostic: Is internet computer 100% on chain?

ChatGPT: "…However, while the goal is to have as much as possible on-chain, there are some nuances:

  1. Smart Contracts and dApps: These are indeed fully on-chain. The Internet Computer enables smart contracts (canisters) to be executed on the blockchain, providing decentralized and tamper-proof computation.
    …

  2. Internet Identity: The authentication system used by the Internet Computer, called Internet Identity, is designed to be secure and decentralized, leveraging cryptographic techniques. However, some aspects of user interaction might still rely on traditional web technologies.

  3. External Interactions: Interactions with external systems (e.g., traditional websites, other blockchains) might involve off-chain components. This is common in blockchain ecosystems where interoperability and integration with existing technologies are necessary.
    …

ChatGPT use of the word “might” is less definitive than the statements you got from it.

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Here’s a conflict… I asked ChatGPT this,
Is Solana better than internet computer?

And got this as part of a response:
2. Full Stack Decentralization: IC allows for the entire application stack to be decentralized, not just the smart contract layer. This includes storage, computation, and user interfaces.

  1. Innovative Architecture: IC’s use of canisters (smart contracts) enables complex applications to run entirely on-chain, potentially reducing reliance on traditional cloud services.

Internet Computer: Ideal for developers looking to build fully decentralized applications with a focus on complete decentralization, web speed, and eliminating reliance on traditional cloud services.

(emphasis added)

In this case it acknowledges that ICP is completely decentralized.

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Hi Agnostic, it makes really sense to have conflicting situations; Think this way, if you are trying to create a better world is because you already have an idea how the world you have been living in is not good enough right? same goes for ICP, big changes on systems or ways which we having been making history for many years so every year gets more difficult to change, does not matter what innovation you want to bring, you will always rely on variables from the past(old ways) to innovate and improve, in ICP these variables can also be off-chain information, but the main point in ICP is that the core system of the innovation is shield in a fair way making the core to not rely or depend on the off-chain variables / data, at least that’s what I understood, and this is the opposite in most of other projects out there. Chat GPT won’t be able to give you the right answer because it does not know the progression history and core ideas of ICP making it not having a good vector formation (memory conclusions) of all these years of development and community interaction and growth of ICP, however you can create your own A.I model and teach it everything ab out ICP, even maybe pull all the content from the forum a create agents for each kind of content and tasks to be able to generate important conclusions about ICP if you wish, really good point you have done here anyway =)

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First we have to define what is on chain and what is 100% on chain.
This is actually a very vague and difficult concept to define

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Is it?

Is it not just simply that every transaction/movement on chain can be logged/traced? As opposed to something that is not 100% on chain where parts of said transactions/movements are not loggable/trackable on the same chain due to the laws/governance not necessarily matching.

For example, you have an identity (your current body) and whatever you do with said avatar (this life) is you (on chain). As long as you are in this body, everything you do can be traced back to your identity. When you go back home (die) you are no longer on (your current) chain and nothing new can ever be added to your current life.

Thus, your identity (current body) is 100% on chain, but the laws/governance of home might be different. That is not to say that it all might be part of a bigger chain, but you get the point.