(Thank you Jose Garay from Witnet for reviewing and fixing some major holes in this post)
When starting a new crypto project or investing in a new crypto project, I feel that DAPPs took me a long time to grasp because they are misnamed by the market. I apologize if this post gets too “in the weeds” but I think it’s an important point to grasp.
DAPPs are to APPs as pizza is to cheese.
When humans look at apps as labeled by Steve Jobs when the iPhone was released, we think about the end user, we think about this screen with different software pockets where we can view a feed or slingshot a bird.
When humans hear the word DAPP, they interpret this the same way. Again, they think about the end user, they think about Facebook, but decentralized. They are thinking about the interface, and that’s wrong.
So what is a Dapp?
In order to answer this, I’m going to describe the 3 parts of every TokenEconomy.
- The Protocol
- The DAPP
- The user-facing client (an app, a website…)
When people say Dapp, 90% of the time they mean client, but DAPP sounds better.
Let’s use the Apple App Store as an example. When an app lists on the App Store market place, they apply to the App Store, and then Apple screens whether or not the product is too competitive with them (misalignment of incentives) and then they will list the application on the store. This is a centralized decision making process, if Apple does not like you, you do not get in.
So in the Apple App Store, the Protocol layer and the Decision making layer (DAPP) are both owned and controlled by apple. While the Client Layer would be controlled by the App, if they get through the screening process.
Curation in the decentralized world is different. The Protocol layer (i.e. Ethereum) is a set of rules that are preprogrammed with who gets to vote, and then the community who run the Curation Dapp vote. Users then enjoy this decentralized curation when interacting with the dapp through one of the user-facing interfaces or clients built for the Dapp.
ETH is the protocol: Augur’s peer to peer oracle+prediction market platform is the Dapp: Anyone can build a client with a new UI or business model for prediction markets on top.
DAPPs are Peer 2 Peer networks which are applications for their underlying protocols, however they operate as protocols for clients built on top of them! The stack for software has changed.
It is important to note that a lot of DAPPs are also building clients, but I think people are going to start separating the two. This creates a free market App Store for every crypto project.