The world of cryptocurrency is filled with acronyms and unique terminology. If you are an investor or a crypto enthusiast, understanding this unique language is essential.
One of the most unusual acronyms in the cryptocurrency world is ‘Dapps,’ short for decentralized applications. These decentralized apps are getting more and more popular and important in the crypto space, but what are they exactly, and how do they work?
What are Dapps?
A decentralized application is the one which runs by getting data from the network of computers instead of a single data server. So that the single point of failure is avoided.If the computer data is not available, the application gets the data it wants from any other node of the network. Dapps are blockchain-enabled applications or websites.
Characteristics of Dapps:
1 ) Decentralized:
All records of the application’s operation has to be stored on a public and decentralized blockchain to avoid the pitfalls of centralization.Decentralized refers to the distribution of authority across all nodes .
2)Immutable:
All information stored on DApp are immutable . Immutability refers to the less or no chance of changing the data or records stored by an individual . When any individual tries to modify or change the records it will be notified by all other individuals and changes will be made when all individuals approve for it .
3)Unhackable:
The concept of decentralization restricted the chance for hacking of records by unauthorized individuals . This unhackable nature of dapp creates more secured environment which makes a trustworthiness among people.
4)Open Source:
Decentralized Applications are an open source platform . This shows that there is no central governance or monitor of dapps . Any changes in a dapp must be decided through consensus or majority of the users of that particular dapp.
5)Incentivized:
DApp allows for rewards and incentives for the active participation of all-nodes of blockchain dapp . These rewards will be in the form of crypto tokens or crypto coins . These are native tokens and can only be used for in-app activities and purchases .
6)Protocol:
The application community must agree on a cryptographic algorithm to show proof of value.
For example, bitcoin uses proof of work and ethereum is currently using proof of work with plans for a hybrid PoW/PoS (Proof of Stake) in the future.
If we adhere to the above definition, the first Dapp was in fact bitcoin itself.
Bitcoin is an implemented blockchain solution which arose from problems revolving around centralization and censorship.
How Does a Dapp Work?
To make a DApp function properly, you’ve to follow the aforementioned factors. To explain clearly, a DApp is an open-source program that’s implemented on decentralized platforms and regulated using tokens generated using an algorithm.
Dapps can be decentralized because they are controlled by the logic written into a smart contract.These smart contracts enable DApps to interface with the blockchain and execute transactions without the need for third parties.
Let’s see what is smart contract along with an example
A smart contract is a piece of computer program which runs if certain conditions are met.
For instance: In a football match, you bet $10 that the “Team A” would win and your friend bets on “Team B”. Both can place a bets by writing a smart contract.
Just imagine the same scenario without smart contract:
- Both give $10 to a third person and he will decide whom to give it when any one of the team wins. In this situation, there is a possibility that he might run away with your money.
- You and your friend trust each other and when the match is over with a winning side, the losing one should pay the winner $10. But it is still not easy.
- You both can write the legal contracts for this transaction since the process is convoluted and this is not the absolute choice because the amount involved in this transaction is very little.
- It has a perfect solution for this problem. By using the smart contracts, we can write the set of conditions that send the winner the payout automatically without the need of anyone. You and your friend just need to keep $10 in your respective wallets.
- Smart contract is more than that and ethereum is specifically created to write the smart contracts for the usage in decentralized applications.
A Dapps Future Awaits:
The web was intended to be a decentralized platform but it no longer is. Tech giants store and process the user data in a centralized data centers.
The major issue with centralized data centres is, the user’s data can be misused easily since it is controlled by a central agency.
People are really concerned about the privacy and they need a decentralized ecosystem. With the growing interests and usage in decentralized apps, it should not be ignored.
With a leap of faith, blockchain is the next step forward and toward a world unified by shared data.
Some examples of decentralized Apps (dApps):
1)Brave :
Dapp Development Companies are preferring this app as it includes around 9M active users. It develops a new measure of value in the modern ad world in which the user's attention is used for setting the value rather than unverifiable clicks or views on a webpage.
2)Chainlink:
This is an oracle system or a secure decentralized data input that verifies the information from the external feed. In the blockchain platform, an oracle system is a database.
ChainLink help in improving the system, which makes compromise or any malicious attack impossible. One of the most interesting things is that it is being tested for Google’s BigQuery platform as a database warehouse.
3)EOS Dynasty:
In this mix, we had to include at least one game. EOS Dynasty, which has nearly 12,000 unique daily users, claims to be the first role-playing, player-versus-player (PvP) game based on blockchain.
Players create up to three “heroes” or warriors who can fight battles to gain experience and grow in power and capabilities by collecting materials, forging equipment and riding mounts (horses, tigers, tortoises, etc.). The player can also be awarded Three Kingdoms Tokens (TKTs), a limited cryptocurrency (ahem, limited to 1 billion), that enables users to earn material or profit dividends in two marketplaces based on a smart contract.
If you have any questions or suggestions, feel free to ask in the comments.
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