What is DApps - A Comprehensive Guide

WHAT ARE DAPPS (DECENTRALIZED APPLICATIONS)?

Decentralized Applications, or dApps, have revolutionized the way we think about software applications. Imagine being able to rent out unused space on your computer's hard drive to people and businesses across the globe and earning a profit in return. Or envision a social app or database that is nearly 100% secure from hacking and data theft. These are just a few of the exciting possibilities that blockchain and dApps offer.
So, what exactly are dApps? They are open-source software applications that run transactions on a blockchain through the use of smart contracts. Unlike traditional apps, dApps are not owned by a central authority and cannot be shut down or experience downtime. This article will cover the following topics related to dApps:

  • An introduction to dApps
  • Key features of dApps
  • Different types of dApps
  • How dApps differ from traditional apps
  • Advantages of dApps over conventional apps
  • Top Platforms for Developing dApps

What are dApps?

Decentralized applications, or dApps for short, are still a relatively new concept, so it can be difficult to give a comprehensive answer to the question "What are dApps?" However, we can identify some of the key characteristics of these applications based on what we have seen so far.
Before diving into the specifics of dApps, it is important to understand the underlying technology that enables them - blockchain. As you may already know, a blockchain is a distributed ledger of transaction records that is secured by cryptographic validation. Each block in the chain is linked to the one before it and the one after it, creating a tamper-proof and transparent ledger of all transactions on the network.

    Given this background, we can identify the following key attributes of dApps:

  • Open Source: Ideally, a dApp should be governed autonomously by its users, with all changes decided through community consensus. The dApp's codebase should be open for anyone to inspect and review.
  • Decentralized: All operational records of a dApp should be stored on a public and decentralized blockchain to prevent the control from falling into the hands of any one centralized authority.
  • Rewards: Validators on the blockchain invest resources (such as computing power, human effort, and electricity) to verify transactions and add new blocks to the chain. In order to incentivize these validators, most dApps use cryptographic tokens as a form of reward.
  • Protocol: The community around a dApp must agree on a cryptographic algorithm to demonstrate proof of value. For example, Bitcoin and Ethereum both use proof-of-work (PoW) as their consensus algorithm, although Ethereum is also researching a hybrid PoW/proof-of-stake (PoS) model.

Overall, Bitcoin is often cited as the first and most prominent example of a dApp, as it is a self-sustaining public ledger that enables efficient transactions without intermediaries or a centralized control entity.

Types of dApps

There are three types of decentralized applications based on the blockchain model they use:

    Applications of Blockchain Technology

  • Type 1: Type 1: These dApps have their own blockchain, like Bitcoin, as well as other alternative cryptocurrencies that use their own blockchain.
  • Type 2: This type of dApp uses the blockchain of Type 1 apps. They are protocols with tokens required for their operation. Omni Protocol is a prime example of a Type 2 application. It is a distributed trading platform built on top of the Bitcoin blockchain, acting as a ‘layer’ to enable a peer-to-peer and trustless exchange of value or assets between parties without intermediaries.
  • Type 3: Type 3 dApps use the protocol of a Type 2 app. One example of a Type 3 dApp is the SAFE Network (Secure Access for Everyone), which is a decentralized data storage and communication network that replaces data centers and servers with the computing resources of its users. It is a self-governing data network that supports the creation of censorship-resistant websites and apps. The Omni Protocol is utilized to issue SafeCoins, which are then employed to enable its functional features.

Differences between dApps and Traditional Apps

Decentralized applications (dApps) and traditional apps differ in several ways, primarily due to the concept of decentralization and immutability of data. In contrast to traditional apps, dApps operates on a decentralized blockchain network, and the data recorded on the chain is immutable.
Another significant difference is the design approach. Traditional apps focus on interface design and run faster with less dependence on third parties. In contrast, developing a dApp requires designing for trust and scalability, and it requires a rigorous testing process to ensure the code is bug-free before deployment.
Additionally, dApps require a different approach to the development lifecycle. Developers must consider the principles of the decentralized network throughout the process, whereas traditional apps have a centralized controlling authority.
Finally, the approach to uncertainty differs between the two. In traditional app development, the "fail fast, learn faster" approach is followed, whereas in dApp development, the cautionary approach is taken, and the code is tested thoroughly before being launched since smart contracts cannot be changed once deployed.

Key Advantages of dApps over Traditional Apps

Decentralized applications offer several advantages over traditional applications, including:

  • Tamperproof and Immutable:Since dApps run on a decentralized blockchain, the records are unalterable and highly secure, making them resistant to hacking and other forms of sabotage.
  • Faster Payment Processing: Without the need for intermediaries such as payment gateways, dApps can process payments faster and more efficiently.
  • Greater Anonymity: Users can enjoy greater anonymity since dApps typically do not require lengthy signup processes.
  • Reliable Data Records: Since transaction information is stored on the public blockchain, users can access and verify data records, providing a reliable source of information.

Top Platforms for Developing dApps

The most popular blockchain platforms for building dApps today are Ethereum, EOS, and TRON. In this section, we will briefly discuss the key features of each of these three platforms.

    Ethereum:

  • Recognized for ensuring security and enabling true decentralization.
  • May not be great for scalability, depending on your development needs.
  • Good for security-focused projects, but may not be ideal for gaming or gambling apps.

    EOS:

  • Involves 21 validators who verify transactions based on a ‘Delegated Proof of Stake consensus algorithm.
  • Validators are paid for voting, which helps secure the network and offer scalability.
  • Scalability is achieved through rationalized decentralization, but security is not foolproof as nodes may team up.

    TRON:

  • Functions on a ‘Delegated Proof of Stake consensus algorithm.
  • Resolves scalability by scaling the main chain itself, allowing for a more transparent cost structure.
  • Not entirely protected as a truly decentralized platform would be, as users can still be locked out if validators team up.

Conclusions We trust that this article on dApps has equipped you with a fundamental comprehension of the different facets of decentralized applications that run on blockchain technology. If you have a business idea or a specific use case for a dApp that you wish to explore further, feel free to contact us. Our team can guide you in making the appropriate decision for your project.

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