What are Decentralized Applications (Dapps)
Most people are familiar with ‘apps’ particularly with reference to software. Software applications are software that defines a particular goal. As opposed to the most widespread software models that are centralized (the server client model is centralized), dApps are apps whose server-client models are decentralized while others are distributed as illustrated in the figure below.
Differences in the three models
A decentralized app must meet the following criteria:
- They should be open source and autonomous. This means that any changes can only be executed by consensus and there is no single body which holds majority tokens in the network.
- Protocols and Data are stored cryptographically in a blockchain
- The cryptographic tokens are used for rewarding network users as well as for application access.
- Tokens are generated using an algorithm that encourages contribution by members of the network to the system.
These four criteria could be simplified into three areas according to Vitalik Buterin the Ethereum founder:
- Architectural that is how many computers does a system have and how many it can hold without the system collapsing
- Political; how many individuals are controlling the computers that comprise the systems
- Logical; does a look at the interface and data structure of the system reveal a centralized/single structure or does it reveal a distributed one that could be broken into independent units?
Benefits of Dapps
According to Akana survey of 250 IT security professionals- the relative lack of security around traditional applications has spawned a broad range of concerns. In addition to DDoS, SQL injection, and XML bombs, other concerns cited by respondents in the survey included XML firewall and message-level security (43%), cross-site scripting (38%), and XML attacks (37%). Brute force, phishing, and impersonation attacks were other significant concerns.
Decentralized applications’ key advantage is the distribution of essential components, a move that improves fault tolerance and makes it practically impossible and expensive to attack such a network. The backbone of Dapps-blockchain-ensures fast, reliable and secure applications to enhance the customer experience. With increased volume as well as velocity of data from new sources like IoT and social media, blockchain and Dapps provide a fast, efficient and affordable way of processing storing big data. Additionally, decentralization acts a barrier to collusion, a move that has often allowed corporations and governments to exploit others.
Examples of dapps include:
- Venue project which enables users to share videos of locations around the world.
- KYC chain which helps maintain “private identity wallet” that can be used in authenticating identity in legal, finance or commerce settings.
Classification of dapps
One of way of classifying dapps is through basing on whether the dapps have their own blockchain or they rely on another dapps’ blockchain. Based on this criterion, there are three types of dapps:
Type I Dapps. These are Dapps which have their own blockchain. Examples include Bitcoins, Litecoins and other alt coins
Type II Dapps. These Dapps base their application on the block of Type I Dapps. They are protocols and must have tokens to function. An example is the Omni protocol.
Type III Dapps. They use the protocol of type II Dapps. They have protocols and tokens as a necessity for their functioning. An example is the SAFE network which uses the Omni protocol in their issuance of ‘safecoins’ which can be used to get distributed file storage.
How Dapps are operated
There are basically two ways through which dapps are operated: proof of work and proof of stake. With the proof of work, consensus and decisions pertaining to any changes to be made on the Dapps are reached based on the amount of work that each individual stakeholder contributes to the operation of the Dapps. This option is commonly used by Bitcoin for running its day-to-day operations. Proof of Work is commonly known as mining.
With proof of stake, decision about changes on the Dapps depends on how much an individual stakeholder owns over the application.
Mechanisms for distributing tokens
Tokens are distributed depending on the amount of work contributed to the operation of the Dapp
Tokens are rewarded in proportion to the initial funding of the Dapp
Tokens are generated via a predefined system but are reserved for the development of the Dapp
dApp Builder as a marketplace
dApp Builder is a SaaS platform for businesses that helps business and users create Dapps. It connects businesses and blockchain.
It enables businesses and individuals to create flexible, secure, and legally binding dApps that are based on smart contracts using the DAP Platform. There is no coding required.
The dApp Builder is a building blockchain-based (Ethereum) marketplace and platform that is decentralized and targeted at the mobile advertising industry.
Its users will have the privilege to access the following among others;
- Predefined smart contracts with the source code
- Web interface to build dApps on ethereum smart contracts
- CSS styles for mobile adaptive design
- Hosting for dApps and smart contract deployment environment
Decentralized apps remain a space to watch for key disruptions in the technology industry. With all the advantages that they present to businesses, dApp Builder makes it much easier to create Dapps that would enhance business operation. From the above discussion, business can now know what Dapps are to adopt them in their business strategy for competitive advantage.