The acronym DApp stands for Decentralized Applications. It is a specific type of applications that does not need central servers to function, but a decentralized network.
Such a network provides for its users to have full control over it and allows access to various services in a secure manner. For traditional apps, the data are stored on centralized servers and in effect allow proprietary companies to be able to operate control, censorship, and manipulation actions.
None of this, on the other hand, can happen with decentralized apps because they run on peer-to-peer networks or blockchains. Let’s try to understand what a DApp is, how it works, and what benefits it actually offers.
Today, most people trust the applications installed on their PCs and phones, trusting that sensitive data are safe. Despite constant reassurances, however, multinational companies are not always able to protect personal information 100 percent.
For example, the Cambridge Analytica scandal in 2018 brought to light the theft of private data from Facebook profiles, which were later resold for political advertising. This is just one of many incidents that can be cited about security not always be guaranteed.
It is precisely to remedy these kinds of issues that Decentralized Applications were born.
A decentralized app is an open-source software that leverages either a blockchain or a peer-to-peer network. The main difference from a regular app is that since it is decentralized, no third party is involved in the transactions.
Going into detail, in the case of the DApp the back-end component that usually resides on servers exists instead on the blockchain. So, there are no intermediaries, and information is constantly shared among participants, with no outside interference or manipulation.
DApps took inspiration from sharing protocols such as DC ++ and BitTorrent, peer-to-peer systems with high resistance to censorship. In any case, the first real DApp on blockchain was Bitcoin, which kicked off the success of so-called cryptocurrencies.
Each user of a DApp operating on blockchain represents a node within the network. Therefore, each person is able to verify its proper functioning and oversee the operations performed.
Within the blockchain remains the record of every single transaction that passes through the smart contract. The approval or disapproval of transactions made by DApp users is handled by this very smart contract, which ensures that participants act within rules that apply to everyone.
Thus the smart contract, or smart contract, acts as a guarantor and is responsible for the validity of transactions. Whenever a new transaction occurs, information is updated in each node. This means that the user contributes his or her own computer resources to maintain the DApp.
This mechanism of action ensures that the platform is always in service and active, as it is not possible to remove all nodes in the network at the same time. Such a situation could occur during a hacker attack or tampering attempts.
It is evident then that DAPPs represents a huge step forward in terms of security since, working on blockchain, they inherit its immense capabilities of privacy, anonymity and protection from cyber-attacks.
Speaking of how DApps work, let’s see what the main features are:
- Open Source: for closed-code applications, users have to trust the developers because they cannot directly access their data. In contrast, in DApps the source code is available to all and this ensures a high level of transparency. Anyone can check the code or improve it, and all changes must be approved by the majority of users.
- Consensus: the operating logs of the DApp are stored on a decentralized public blockchain and all operations go through a consensus system. It means that when most of the nodes in the network approve the transaction, the transaction is processed.
- Protocol: blockchain data is stored cryptographically to increase the level of security. In fact, running on blockchain the DApp must use a consensus protocol to authorize transactions. The main protocols are Proof of Work (PoW) or Proof of Stake (PoS).
- Decentralization and security: DApps allow the information stored in them to be decentralized along network nodes, independent of each other. In the event of a failure at one node, the others will not be affected. Simply put, there is no central failure segment. It only takes a single user to be active for the network to continue to function, without interruption.
Differences between DApps and traditional apps
Apps and DApps have some points of contact, but the main difference lies mainly in the way these elements they have in common interact.
The two categories of apps share 3 basic components:
- Front-end: this is the interface that users employ to interact with the app. Both classic apps and DApps make use of HTML5 web interfaces or frameworks such as GTK and Qt. The front-end thus aims to provide participants with the ability to send and receive the information that the app is using.
- Back-end: is the logical structure that enables the app to function. In the traditional app the back-end is centralized, while in DApps it is decentralized and is connected to the blockchain smart contract. Smart contracts are public and visible to all, and users know that the DApp will closely follow what is stated in the smart contract.
- Data storage: finally, there is the storage layer. In classic applications, the space where data is stored is centralized and can be the user’s computer or third-party servers. In contrast, in DApps even the storage is completely decentralized. In fact, information is stored within the nodes of the blockchain with cryptographic systems that ensure proper protection. In addition, the degree of security increases as the number of DApp participants increases.
Specifically, 3 main categories of DApps can be encountered, according to the blockchain being used:
- Type I: This group includes decentralized applications that have their own blockchain, such as precisely Bitcoin, Ethereum, Litecoin and other cryptocurrencies. These are DApps that usually offer users systems to manage their money and finances.
- Type II: In this class we find DApps that need a blockchain and its properties to function. An example is Golem, a DApp that runs via Ethereum blockchain. It was developed to allow users to rent useful computing resources to process data. Golem is a kind of decentralized supercomputer from which you can rent the power you need.
- Type III: DApps of this kind use Type II DApps in order to function, especially tokens. This is the case with Safe Network, which relies on Omni Layer, a Type II DApp, to create its Safecoin cryptocurrency.
As we have seen, DApps are immutable and tamper-proof and are able to address a wide range of needs.
Currently, Ethereum is the platform of choice for DApp developers, but many others also rely on QTUM, NEO, and Cardano.
Among the most popular DApps are:
- Crypto Kitties: was the first video game to be developed on blockchain. It consists of growing and trading unique virtual kittens. Each kitten has characteristics that make it different from the others and it is the uniqueness that gives it value.
- Status: is an instant messaging and media exchange DApp. It is very reminiscent of Whatsapp.
- Storj: it is a DApp that provides online storage space. It is comparable to Google Drive or Dropbox.
- Steemit: is a blogging DApp. It gives users the ability to have a personal profile where they post content. For each interaction or like you are paid back in cryptocurrency.
- Uniswap: is an exchange DApp based on Ethernum that allows ERC20 tokens to be exchanged, without sellers and buyers having to provide liquidity.
- BAT: Basic Attention Token is a platform that deals with digital advertising and is based on Ethereum blockchain. Specifically, advertisers can buy advertising space using the Brave browser.
Would you like to create your own decentralized application (dapps)? Contact Enkronos today.