You might be asking yourself, “What on earth is a decentralized application?”
Well, we’ve searched, and we’ve found that there isn’t one absolute agreed upon definition for what exactly a decentralized application (dApp) is, as the concept is still quite new. It seems even the grammatical spelling is not yet agreed upon, so for now we’ll go with dApp.
Although there’s no single definition, we have found that dApps do have a few common characteristics:
- They are open source, meaning that the software’s original source code is made freely available and may be redistributed and modified.
- They don’t have a single point of failure (SPOF), meaning there is no part of the system that, if it fails, will stop the entire system from working. SPOFs are undesirable in any system with a goal of high availability or reliability, be it a business practice, software application, or other industrial system.
- The application community must agree on some sort of consensus protocol.
To date, dApp startups (built on top of smart contract platforms) have constituted the majority of ICOs.
DApps essentially allow all the back-end code and data to be decentralized, and hence they cannot be changed. Considering the decentralized nature of these applications, coupled with the mechanisms that secure blockchain data, dApps have the potential to unlock a diverse array of use cases.
A few benefits of creating a dApp rather than a normal application include:
- Payment processing: no need to integrate with a fiat payment provider to accept funds from users. Users can transact directly using cryptocurrencies.
- User credentials: using a system of public and private keys, end users can transact and bind their sessions and metadata easily, with varying degrees of anonymity, negating the need for lengthy sign-up or registration processes.
- Trust and auditability: open-source dApp code is accessible and understandable to techno-savvy users. This transparency and the security of enclosed data generates confidence in the applications. A public record on the blockchain also makes transaction information easy to audit by users or third-parties.
DApp development is growing rapidly but is also still in a very early phase. The benefits that dApps provide, which traditional, centralized applications do not, suggest that we can expect to see impressive new functionalities and use-cases for blockchain technology in the near future.
App via Pexels