What are DApps?
Digital programmes that run on a blockchain network of computers rather than relying on a single computer are referred to as “decentralised applications,” or “DApps.” They, exist outside of the jurisdiction and control of a single authority.
Understanding Decentralized Applications (dApps)
A typical web application, like Uber or Twitter, runs on a computer system that is owned and managed by a company, giving that company complete control over the app and how it functions. On one side, there may be a number of users, but only one company has control over the backend.
DApps can operate on a blockchain network or a peer-to-peer network. In a P2P network, where multiple users are simultaneously consuming content, feeding or seeding content, or performing both tasks, examples of applications include BitTorrent, Tor, and Popcorn Time.
History of DApps
The report “The General Theory of Decentralized Applications, Dapps,” published in 2014, provided a definition of the DApp. It was written by a number of authors with expertise in the field, including Shawn Wilkinson and David Johnston.
According to the paper, DApps are defined as having the following attributes:
- A DApp must function independently of third parties and have open-source code. Users must propose and vote on changes that are automatically implemented, making it user-controlled.
- All data must be stored in a blockchain network that is open to the public. Since there cannot be a single point of attack, decentralisation is essential.
- DApps must use a cryptographic token of some kind to gain access, and they must pay contributors in that token, like miners and stakers, in order to acknowledge their work.
- The consensus algorithm used by a DApp must produce tokens, such as proof-of-work (PoW) or proof-of-stake (PoW).
“The paper classifies three “types” or “layers” of DApps based on the way users interact with them.”
Layer-one DApps have their own blockchain and are autonomous. These DApps are the most well-known, like Bitcoin, for instance. For instance, they demand baked-in rules and a consensus algorithm.
Layer-two DApps are typically constructed on top of layer one, utilising the strength of the aforementioned blockchain. They employ tokens for interactions and are frequently thought of as protocols. A layer-two DApp is one that is constructed on top of Ethereum as a scaling solution. This second layer may process transactions before committing to the first, relieving some of the load on the main chain.
Finally, layer-three DApps are developed on top of layer two and frequently contain the data necessary for the latter two to communicate with one another. It might keep the scripts and application programming interfaces (APIs) required for layer one and layer two to function. A layer-three protocol, for instance, could host various layer-two DApps, enhancing the user experience across all of them.
Why use a DApp?
Apps that run on a decentralized network have some advantages over those that are centralized. The innovative smart contract’s primary benefit is the absence of a third party. Anyone can receive money through an app like Venmo, but there are fees associated with transferring that money to a bank account. And moving trucks frequently arrive late.
However, using a decentralized app to send money means there are either no or very little costs involved. Users save money on fees and time due to the near-instantaneous nature of decentralized transactions.
When the internet first emerged, it was a place where anyone could access a wealth of knowledge. Large corporations eventually centralised it or harnessed it. Although these organisations offer it “free,” it comes at the expense of our data, which they then sell to make money.
Companies then have control over that information, are aware of the preferences, financial status, and social networks of their customers. They have control over it, so they can also take it away.
Enter Web 3.0, where using DApps doesn’t compromise privacy. Instead, a user can decide to share only the information that is necessary for, say, a loan or a medical exam, and can control who sees it and for how long. Additionally, companies may pay for this access, ensuring that users also benefit from it. The issue of trust is another. It’s difficult to completely trust anyone in a world where major corporations with ostensibly high security are leaking usernames, emails, and passwords.
Drawbacks of DApps
Decentralized applications may indicate a world without corporations in the future, but there are currently some significant problems that the sector is attempting to solve.
The absence of a centralised authority may result in slower platform updates. One party can simply update their app whenever they want, after all. But even for a minor bug fix, a DApp needs majority approval from the acting governance. As users weigh the benefits and drawbacks of any improvement, this could take weeks or even months.
Since dApp use is still in its infancy, it is experimental and subject to certain risks and unknowns. There are concerns about the applications’ ability to scale effectively, especially in the event that one app uses a lot of computation power and overwhelms the network, creating congestion.
Another restriction of dApps is the difficulty of making code modifications. A dApp will probably require ongoing changes after it is deployed in order to make improvements, fix bugs, or address security risks. Because the data and code that are published to the blockchain are difficult to change, Ethereum claims that it can be difficult for developers to make the necessary updates to dApps.
Happy Learning. 😊
