Finance, gaming, online markets, and social media are all likely to adopt blockchain-incorporated dApps as the trend for dApps grows.
Summary
Apps that run on top of blockchain networks are known as decentralized applications (dApps). They can be tailored to a variety of real-world scenarios. Although the user experience (UX) of dApps is comparable to that of web applications, their back-end procedures are not. Decentralized apps eschew centralized servers to transact in a distributed and peer-to-peer (P2P) fashion as opposed to using the central HTTP protocol to communicate.
Contents
- The Blockchain Makes dApps Possible
- Web Apps vs. Decentralized Apps
- Decentralized App Criteria
- The Future of Decentralized Apps
The Blockchain Makes dApps Possible
Blockchain protocols have been regularly improved and refined since Bitcoin’s introduction more than a decade ago to unlock new functionalities and use cases. Now there is a budding industry of decentralized applications (dApps) built on blockchain — everything from finance to gaming to web browsing to collecting art.
Despite the fact that the majority of dApps are built on Ethereum, all dApps use blockchain technology. These decentralized apps use blockchains to process data across dispersed networks and execute smart contract transactions. Smart contracts are self-executing, automated agreements that allow two parties to transact in a seamless, rapid, and automatic manner. They are a crucial component of dApp technology, and they may be combined to produce sophisticated software that can be used in a variety of sectors.
Just like developers build applications for mobile and desktop devices, dApp developers create applications to function on specific blockchain networks. The Ethereum blockchain is where the vast majority of dApp development takes place. As a result, the Ethereum blockchain powers the vast bulk of the dApp ecosystem’s activity.
Web Apps vs. Decentralized Apps
Companies that provide online applications include Trello, Slack, and Twitter. Traditional web applications’ usefulness is determined by two factors: the front end and the back end. Web apps rely on software that runs on centralized web servers rather than the device’s native operating system. Devices and servers communicate via coding messages through the Hypertext Transfer Protocol (HTTP). When you open Twitter in your web browser, for example, the feed that appears (the front end) is derived from data stored on the company’s web server (the back end).
While the internet transmits vast volumes of data via massive, centralized servers, a blockchain is made up of hundreds or even thousands of devices that share the transactional weight over a distributed network. Decentralized apps and websites employ the same technology to render a page on the internet on the front end. On the back end, however, dApps communicate with their individual blockchain networks via a wallet that acts as a gateway to the blockchain ecosystem.
Wallets keep track of your blockchain address as well as the cryptographic keys you’ll need to identify and verify yourself. dApp wallets activate smart contracts that interface with the blockchain and conduct transactions, rather than utilizing the HTTP protocol to communicate with it. A decentralized application (dApp) is the front-end user interface (UI) that interfaces with smart contracts that transact on the blockchain, after which the blockchain’s distributed network of nodes validates and confirms the dApp data. While the user experience (UX) of a well-designed decentralized application may appear similar to that of a web app, it differs in that it lacks servers, HTTP, and potential censorship.
Decentralized App Criteria
Although it is clear that dApp architecture differs from that of traditional platforms, the definition of a dApp is still being defined. A dApp, on the other hand, must generally meet these four basic criteria:
- A dApp is completely open source, with no entity owning the majority of the coins or tokens. Changes to the protocol must be approved by consensus of the protocol’s network users due to its open-source nature.
- A dApp’s data must be stored on a decentralized blockchain.
- A dApp needs to generate digital assets that act as a proof of value.
- A dApp’s assets are distributed as rewards on the network.
Based on this definition, the Bitcoin blockchain classifies as a dApp because it adheres to all four criteria. Let’s run through the dApp criteria for Bitcoin:
- Bitcoin operates on open source code, no single entity owns the majority of bitcoin (BTC) in circulation, and the Proof-of-Work (PoW) consensus mechanism guides governance.
- Bitcoin and all its data live on the blockchain.
- Bitcoin generates coins that act as proof of value resulting from the mining process.
- Bitcoin distributes bitcoin cryptocurrency to miners as a mining reward.
Many cryptocurrencies can be considered primitive versions of dApps under this description, even if they lack smart contract capability and web interfaces. A dApp is a program that runs on a blockchain. Blockchains can host decentralized applications (dApps) that have their own blockchains, such as Bitcoin. Alternatively, non-blockchain dApps can be created on top of an existing blockchain, as many of the dApps that run on Ethereum do.
The Future of Decentralized Apps
Although Bitcoin was probably the first dApp, Ethereum has subsequently become the dApp ecosystem’s primary growth driver. This is due to its smart contracts, network effect, and user base, among other factors. As the decentralized finance (DeFi) market increases its use cases and acceptance, dApps provide an important on-ramp to new audiences by deploying user interfaces that mimic traditional web applications while gaining access to blockchain’s new features. In this approach, dApps are using blockchain to increase the functionality of the internet in a variety of ways.
Regardless of the underlying blockchain in use, dApps are gaining popularity at a rapid pace, and the movement is only getting started. Finance, gaming, online markets, and social networking are all likely to become blockchain-based dApps as blockchain continues to evolve at a rapid pace.
