Zeux 101 Guide: Everything you need to know about DApps

You might have come across this word before but skipped straight past it.

Probably just another made up buzz word, right?


DApps are a relatively new type of technology that has only really come about in the last decade or so. They bring together the benefits and convenience of a standard mobile application and the power of block-chain technology.

What exactly is a Dapp?

The word Dapp is a combination of the words ‘decentralised’ and ‘application’. This by definition makes it software that runs without any central authority and off a peer to peer network of interconnected computers.*

A Dapp usually gives you an incentive where if you lend out your resources, you can gain something in return (i.e. cryptocurrency). This means that you can essentially have the application run in the background and gain rewards without needing to put in any effort into actively gaining them yourselves.*

What makes a Dapp, a Dapp?

Dapps tends to have a few defining rules that help you to separate them from the rest. Here are the 4 common features:

  • Open Source — There should be no single person or entity controlling the majority of the tokens or value of the company. Also, the code used to create the software should be open to the public meaning that anyone can question it. Any suggested improvements, however, would need to be made in a consensus of its users.
  • Decentralised — The records of operation and any data generated must be stored cryptographically on a public block-chain. This means that the data should be encrypted and stored electronically increasing the level of security.
  • Incentivised — Any valuable contribution from miners or farmers using the block-chain should be rewarded with a cryptographic token that is used by the system.
  • Algorithm — Tokens should be generated based on the cryptographic algorithm which shows the proof of the value that the nodes bring to the app. (More on nodes later).*

Protocols of a Dapp:

These Dapps are fuelled with tokens that are generated using an algorithm or what’s known as a protocol (set of rules to be followed). At the moment there are two common protocols used to reach a consensus between the users of that Dapp:

  • Proof of work is a protocol that requires some computing power and energy to prevent cyber-attacks by malicious entities like spam emailers or those that try to launch attacks that deplete computing resource power. In return for lending out the computing power, miners get some currency in return.* Bitcoin is an example of a cryptocurrency that uses Proof of work to generate tokens for miners.
  • Proof of stake, on the other hand, is a protocol where a miner can generate a percentage of tokens in proportion to the number of coins they currently hold in the company (their ownership stake).* Qtum is an example of a cryptocurrency that uses proof of stake to generate tokens for miners

Types of Dapp

There are tons of Dapps in the world to try out, each solving a different problem. You can, however, group them together into 3 general categories:

  • DApps that manage money — These are apps that deal directly with the exchange of currency or to settle contracts. They work by using nodes to distribute data. Nodes are a copy of the ledger or record of transactions in the block-chain that exists on the computer or on storage and is essential to preserve a cryptocurrency’s integrity.* Examples of these types of apps include central currency dapps, network dapps and dapps that allow peer-to-peer transactions.
  • DApps that involve money — These apps mix the use of money with information available from the outside world. This is because these apps rely on outside information in order to provide up-to-date information to its users. Examples of these apps include insurance dapps, network dapps and dapps that use external authorities or oracles (an agent that provides information to a block-chain for smart contracts).*
  • Decentralised autonomous organisations (DAO) — These apps are ones that run without leaders and rely on smart contracts to carry out tasks. They work because they have pre-written rules that determine factors like how users can vote and how the company will distribute their funds. Examples of this type of app are governance dapps and voting systems.*

Advantages of a Dapp

Dapps are gaining interest as people see its potential and future applications. More and more companies are starting to see the block-chain as a powerful tool that can help to solve real world problems.

Due to the nature of the technology involved in their builds, they come with numerous advantages over traditional apps.

Here are 3* major advantages:

  • Inbuilt Security — Dapps are inherently more secure than their traditional counterparts. The sensitive data the app generates is stored directly on the block-chain. This helps to protect against any outside attacks that try to alter the data, steal any funds or sensor valuable content. Any changes to the info that is stored on the block-chain must be done so in a consensus of its users and the majority must agree to the changes for it to then be validated.
  • Decentralisation of power — Dapps are naturally decentralised, which means that there is no central authority in control of them. There is also no outside influence from external points of power like corporations or the government. This is good because it gives each individual user of the app, more power over its direction and the applications in our everyday life.
  • The potential for innovation — There are a large amount and variety of Dapps being created and some are even unrelated to privacy and security. This shows that there are unparalleled uses for this technology and that there is lots of potential for it to grow in the future.

The more you know

So now you understand a bit more about dapps and how they work and may even be tempted to check some out more on your own.

If you found this article interesting, be sure to share the news with a friend and comment your thoughts down below.


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