What is a dApp?

Updated: Aug 3


Where can I find them? What are they good for?


A dApp is just like any other software application, with the distinction that it is built and run on a decentralized or peer-to-peer network. The underlying mechanism of dApp working is blockchain, which is a digital archive of transactions in the form of blocks interlinked with crypto validation. During the process, all proceedings are visible to the people in the loop.


Structure

The term “decentralized” here means that the dApp concept is outside the control of a single authority and owner. Its development structure is similar to that of a traditional application, but with the latest smart contract technology.


dApp = Front End + Business logic (Smart Contract Backend)


Front End: Identical interface as of standard website/app and uses the same pattern to render the webpage. Decentralized storage schemas like Swarm and IPFS can be used to host the frontend of dApp and other media files (audio, video, images, etc.). Frontend can be composed in any language and frontend framework.


Backend (Smart Contract): One or more smart contracts act with fundamental blockchain to define the core logic of a dApp. It creates the whole business logic of dApp and contains backend code. Smart contract is usually created through a network protocol and its code executes specific operations programmed by a developer.

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Protocols

Several protocols are used to create decentralized applications including EOS, Cardano, Tron, NEO, and Stellar, but the most popular is Ethereum. Ethereum protocol stores executable code which is written in a programming language specifically used by Ethereum. Solidity, Serpent, and Vyper are well-known languages.

Smart contracts of Ethereum are hosted worldwide on computer nodes in decentralized form, as these nodes are continuously updating the information of code and transactions to have the same copy everywhere.


Characteristics of a dApp

A standard application like Uber, Facebook, and YouTube runs on a centralized network and is handled by a backend authority who can manipulate/guard their working and operations. On the other hand, for an application to be called a dApp, it must encompass the following attributes:


1. Open Source

The app must be operating autonomously and all alterations must be governed by users. The application code should be flexible for scrutiny.


2. Incentives

The miners and validators, who contribute to validating blockchain by investing their time and effort, are remunerated with crypto tokens by these apps.


3. Protocol

Acceptance of a cryptographic algorithm by the community around the application, to denote PoW, needs to happen. Currently, proof of work is used by both Bitcoin and Ethereum.


4. Deterministic

The functionality of a decentralized application is not affected by the environment, which means they perform identical functions no matter in what environment they are executed.

If it meets the above key attributes, only then can an app be labeled as dApp.


Where and How to Access dApps?

With the increasing use of mobile devices, the availability of mobile wallets with dApp browsers is escalating as well. Users can access, interact and trade with decentralized applications at the ease of a few clicks, rather than spending time on desktops.


Platforms

dApps are enabled through several networks such as OST, Neo, Steem, EOS, Tron, Block Stack, Waves, Cosmo, but the best one is Ethereum. Ethereum, among all other platforms, contains a higher degree of documentation, available dApp range, and user base. It intends to create and launch high-quality dApps targeting less development time and more security.

Ethereum offers a wide range of diverse dApps targeting multiple application areas, as described below:

  • Decentralized Exchanges (DEX): Some top of the list dApps in this category are Joyso, Airswap, Kyber, IDEX, and 0xPortal.

  • Gaming: The A-list applications that fall under this category are Etheremon, Axie Infinity, Decentraland, ExoPlanets, and Ox Universe.

  • Finance: Decentralized finance DeFi applications which incorporate features like (stake, borrow and lend) are InstaDapp, DefiSaver, Set Protocol, and Compound.

  • Marketplaces: RareBits, Ethereum Name System, Origin, Open Bazar are a few of the illuminated names in the group.

  • Social Media: Famous Social applications built on blockchain are Pepo, Dlive, HEX, Bounties Network, Cent, Roll, and Status.

dApp browsers and WEB 3.0 Wallets

WEB3 is a wallet that permits access to the third-generation web and decentralized applications. WEB3 is in the form of a browser connected to a regular wallet, which possesses a separate section of dApps. This wallet comes in three separate categories: smart contract, hardware, and self-custody.

Research must be conducted before choosing anyone from above-mentioned types, i.e., select those which offer the best level of trust by its provider. Below, I have stated some useful wallets which you can give a look to browse dApps.


Most of the types described above are mobile-based wallets for dApp accessibility and are also the most trusted platforms. There are many more than the above-listed, which you can search based on your requirements and scope of crypto trading experience. I have mentioned some prominent onesfor you to get an idea of this digital innovative concept.

Web3 Connect and Wallet Connect are two widely used protocols for connecting mobile wallets to desktop decentralized applications by just scanning a QR code without any hassle.


What are dApps good for?

dApps contain the potential to open up a huge array of application scenarios for its users, as it offers decentralization of data and code to make it tamper-proof.


A few notable advantages dApps have over traditional applications are:


Privacy of User Credentials

Decentralized apps nullify the need for a lengthy registration process for users, and users are not required to provide real names/credentials to use dApps. Moreover, anonymity can be easily kept with public and private keys while conducting transactions.


Direct Self Ownership

As dApps are open-sourced and build on a decentralized structure, there is no entity or central holder who can stop users from carrying out transactions or read data from the blockchain. Users can also deploy dApps without any restrictions from any third party. No risk of data confiscation is involved, and people feel a sense of custody over their property.


Trustworthy and Verifiable

The transparent open-sourced code is attainable to pro users, which labels these apps as confident and secure. The transaction record is publically available on the blockchain for users and third parties to audit/inspect. The absence of a central authority in these apps makes it impossible to tamper/sell/misuse user data, which is not always the case in traditional application models.


Conclusion

Before diving into the dApp world, make sure that you have native blockchain tokens to trade with. For example, in the case of Ethereum, people are required to pay gas fees (blockchain transaction fee) for using dApps. This article has attempted to provide you with meaningful insight into the main technology behind blockchain applications. The trustless, secure, fair, and smart network of decentralized applications will let people operate their finance by themselves in the future.


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