We Have the DApp Foundation, Now Let’s Build the Rest: Part One
We’re off to a strong start, but we’ve got a ways to go.
What is a DApp?
At their heart, a “DApp” is exactly how it sounds. It’s a decentralized application built for the blockchain. DApps have great potential and are just now seeing proper execution. While still in the early days, a goal for DApp developers is making them run like standard web apps end-users are already familiar with. Success in this respect will likely depend on improving the infrastructure DApps are built on and considering what we mean when we throw around this industry buzzword in conversation.
Due to the relative infancy of functioning DApps, it’s understandable if you need a primer on the technology. DApps are blockchain applications that provide greater security to users along with greater functionality to blockchains and cryptocurrencies. Currently, a significant roadblock to their proliferation comes in the gas (the amount of work required to perform an action) required to push through an action on the blockchains running these DApps. The Ethereum network is a popular choice of developers, but it is known for causing headaches in terms of fluid DApp function. It was thought protocol and cryptocurrency platform EOS might help, but it’s not without its own issues. Simply put by David Floyd, a writer for Coindesk: “ethereum dapps can be costly for the ones using them, EOS dapps can be costly for the teams deploying them.”
Briefly, gas cost is determined by a ‘supply-and-demand’ style system; unreasonably high gas costs are a symptom of capacity limitations. One of the ways people are trying to increase capacity (and by extension lower gas cost) is to move from Proof-of-Work consensus to Proof-of-Stake consensus. Because Proof-of-Work consensus consumes so much compute power, the majority of the computational capacity of a PoW-based blockchain goes to its consensus algorithm instead of driving the underlying state-machine (e.g. Smart Contracts). While transitioning to Proof-of-Stake won’t make a blockchain efficient by classical computer standards, PoS will free up a significant amount of compute power. This will significantly increase capacity, leading to (comparatively) lower gas cost. PoS could end up being the infrastructure solution DApps need to see greater proliferation. We’re in the early days of seeing PoS rolled out on the Ethereum network with the Casper Protocol, but the community seems excited with the shift away from PoW.
Despite these complications around gas costs, we’re seeing developer support of Ethereum Classic jump, “as dApp popularity on the Ethereum Classic (ETC) blockchain [sic] has just doubled in two months.” Clearly, there is excitement, even with concerns over the current infrastructure running these DApps. There are already plenty of interesting DApps up and running. More knowledge brings cooler DApps, so why not be aware of the shortcomings? Learning about DApps goes hand in hand with learning about the hurdles that must be cleared to see their proliferation.
It’s Still Early Days
In June, Coindesk wrote on the Top 5 Ethereum DApps measured by daily users. It’s exciting these offerings pull in hundreds or even thousands of users, but they all have a similarity:
The top five — Idex, ForkDelta, Bancor, CryptoKitties and LocalEthereum — all facilitate trades of crypto assets in one way or another, though they have a range of business models, from exchange to game to market maker.
CryptoKitties, for example, isn’t even a year old and has seen over a million digital cats bred in the blockchain-based game. We’ve also seen the creation of the KittyVerse, building games and features around this craze. That’s not even the only cute-focused offering. We can’t forget about Blockchain Cuties, which ventures outside the feline realm to a variety of animals, both real and imaginary. Other blockchain-based games are working on the gas problem by taking parts of their product off-chain. Via PRNewswire, “HyperDragons’ arena battles were limited to 32 players; now, each battle accommodates 2,048 players” thanks to a recent protocol integration. It’s this segmenting on the product that I believe holds the future of DApp development. Storage and collection of in-game items and currency is a popular DApp model that we’re seeing explored in an effort to save in-game items across games. Crypto startup Vault is “launching a wallet that stores non-fungible tokens and other crypto collectibles on Apple’s App Store.” The interface even allows users to add friends, alleviating the stress of remembering all those wallet addresses. Friend lists are going to be a requirement going forward, if DApps have any hope of breaking into the mainstream.
As Coindesk reported in September, the recently-launched FOAM is attempting “cartography by cryptography” on the ethereum blockchain and wants to provide an alternative to traditional, centralized mapping services. FOAM “aims to build a reliable, resilient world map using smart contract technology.” A skeptic might ask why we need something like a map running on a blockchain for public scrutiny. Maybe the in-game collectibles are viewed different, something more personal that should be kept safe. Should maps be viewed the same way? Should we not just trust Google or Apple are providing accurate geographic data? Perhaps. This is where the conversation gets complicated in terms of what needs to be on the blockchain and what we can continue to trust running off-chain.
The Japanese messaging service LINE is releasing five DApps for its new blockchain platform. Each DApp serves a specific function (quotes from original LINE press release):
Wizball Overview, which rewards users for answering questions; 4CAST Overview, which creates a prediction market; Pasha Overview, which rewards users for posting product reviews; TAPAS Overview, which similarly rewards users for posting food reviews; and STEP Overview, which incentivizes users to “share their stories of recreational activities and holiday trips.
These DApps are added onto LINE’s service to perform relatively-simple, singular tasks. These DApps focus on “rewarding” users across various parts of the LINE ecosystem. It’s important to note that DApps will likely continue being utilized primarily for determining “who owns what” and storing public keys on the blockchain. This is not to suggest they won’t have other functions bolted on, or that those are the only utilizations and the future of DApps won’t be exciting.
There are plenty of companies working in various forms of DApp development, including the one I work for, Mimir Blockchain Solutions. But not many are trying to make the distinctions between DApps and apps that interact with a blockchain. To some, if an application interacts in any way with a blockchain, it’s considered a DApp. However, at Mimir, we’ve developed proof of concepts such as Eth-Mail, an encrypted messaging service, and Eth-Watch, a blockchain push notification proof-of-concept which do not necessary view as DApps in the general term. Both services interact with the blockchain, but are not currently functioning in a fully decentralized manner. It was/is our goal to be fully transparent and avoid jumping onto a hype train with a misleading product that is “kinda sorta” DApp-like. It would be disingenuous of us to call either of these a DApp right now, although we’re working toward that goal. Companies like ours are working not only to create full-fledge DApps but to expand the infrastructure and API tools that supports DApp developers in the hopes that we see further expansion of the tech.
Interface is important if the goal is to someday provide a user experience as easy as Facebook. The infrastructure hasn’t caught up yet, and we should also be clear on the security implications. A lot of companies claiming to be DApps are not actually decentralized. Improved infrastructure will allow for a better definition of DApps, both existing and future. That said, if those concerns weren’t enough, proliferation won’t be without other roadblocks as well. The decentralized nature of DApps is concerning to some, specifically hosting services who store websites for paying customers. A shift to decentralized infrastructure could mean those hosting platforms relinquish some profits or fight back. I’m assuming they’ll choose the latter.
That said, the sky’s the limit for DApps if the industry decides they’re valuable. They can be utilized for social media, banking, peer-to-peer transactions, and a variety of other uses. If we can get more flexible with how we view DApps, we’ll see an expansion of the market. We could likely also see social media and streaming services transition the most sensitive parts of their platform to a decentralized model. Transitioning entire platforms to the blockchain wouldn’t make sense, both from a practical standpoint and in terms of gas costs. Hype has grown, no doubt with the help of “DApp” being the current blockchain buzzword. If we codify our language a bit, we may be able to guess what’s to come in DApp development. Check out Part Two for an exploration the different uses of the term.
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