A quick introduction to dApps and their place on the blockchain
Before we can ascertain whether dApps will stand the test of time, let’s first understand the technology behind it. We cannot truly know if dApps can stand the test of time without understanding its underlying technology which is the Blockchain.
There are obviously more than one thousand definitions and explanation of what the blockchain is. But at its core, blockchain is a decentralized, distributed ledger system that stores and verifies information using cryptographic protocols. By this, we mean that blockchain allows a true peer-to-peer transfer of assets that is verifiable, transparent, and immutable. We can say it is verifiable because the blockchain uses a consensus-based approach to keeping the ledger accurate. Irrespective of the identity of parties not being known in any given transaction, the nature of the transaction itself is immediately transparent on the entire blockchain. This means a full record of each transaction is available for all to see. Finally, blockchain transactions use cryptographic protocols to ensure that once a transaction is recorded in the ledger, it cannot be altered.
Blockchain technology can be applied to a wide range of industries and applications, but not all of them. Common use cases include financial, logistics, real estate, health care, and retail sectors. Industries relying heavily on payment processing and financial transactions have the most common uses for blockchain technology.
What are dApps?
The term dApp simply means Decentralized Application. They are applications that run on a P2P network of computers rather than a single computer. dApps have existed since the advent of P2P networks. They are a type of software program designed to exist on the Internet in a way that is not controlled by any single entity or influenced by anybody.
Necessary criteria for you to identify a dApp are:
- Open Source: A reasonable amount of the project/app has to be available to all e.g. using repositories like github.
- Decentralized: Uses a blockchain-like cryptographic technology protocol which ensures that once a transaction is recorded, there is some degree of permanence.
- Incentive: The dApp should utilize a crypto-token or digital asset that will fuel it. Usually, there is a case for this token to rise in value.
- Algorithm/Protocol: Generates tokens and has an inbuilt consensus mechanism.
Classification of Dapps
Type 1: dApps in this category have their own blockchain (like EOS or TRON).
Other altcoins also fall under this category as well.
Type 2: These types of dApps use the blockchain of Type 1 dApps.
Type 2 decentralized applications are protocols and have tokens that are necessary for their function.
Type 3: These types of dApps use the protocol of a Type 2 dApp. For example, the SAFE network uses the Omni Protocol for issuing SafeCoins that are then used to build distributed file storage.
Increase in awareness and Use of Dapps
There have a great increase in Dapps and users because as more awareness is created about the blockchain technology, all other things that are associated with it are also gaining recognition. Five years ago there was nothing like dApps on the blockchain but since their advent, they have continued to grow. Currently there over 2000 dApps that have been launched and that number is constantly increasing as more users are getting interested.
Below are the statistics of the two major giants when it comes to documentation and listing of dApps.
Is the future bright for dApps?
According to David Johnston, CEO of the DApp Fund:
“These decentralized applications will someday surpass the world’s largest software corporations in utility, user-base, and network valuation due to their superior incentivization structure, flexibility, transparency, resiliency, and distributed nature.”
Also with the recent wide adoption of the blockchain technology in various sectors and the gradual turn of events around the world, one can confidently say that most persons are beginning to see the light of a decentralized world. Everything that can be decentralized is getting increasingly decentralized by the day, and with the level of growth being experienced by dApps, one can postulate that dApps have a fighting chance against our regular Apps in the future. As long as there is a blockchain there always be dApps.
Author: Benjamin from Token Valley
Note: The views and opinions expressed in this article are those of the particular author. Token Valley is a dApp discovery platform seeking to bring together the dApp community in a transparent manner that encourages further growth in the space.