What is a DApp?
A DApp, or a decentralized application, is an application that runs on a decentralized network, as opposed to traditional applications that rely on centralized servers.
At their core, decentralized blockchain applications, or “DApps,” are very similar to the apps we know and love, with a few key differences. Since DApps are tied to blockchain networks like Ethereum, a copy of data is stored on all computers in a blockchain network. This means that by definition, no one individual or group controls a DApp.
A DApp is a computer program that exists and runs on the blockchain in the most basic sense. All web apps consist of a front-end (on your computer) and a backend (on the respective servers). The difference with a DApp is that the backend component exists on the blockchain.
Unlike traditional apps, DApps are also controlled by and funded by their users, like Ethereum and Bitcoin are. Most often, it has several other characteristics:
- Its computer code is fully open source.
- It does not need a central authority to function: it thus makes possible direct, peer-to-peer interactions between users via smart contracts.
- It uses a cryptocurrency or token.
- The data is stored encrypted and transparently on a blockchain.
The vast majority of decentralized applications today are built on the Ethereum blockchain.
What is a DApp and The origin of decentralized applications (DApps)
Presently, many of us heavily depend on our favorite apps on our mobile phones. While using them, we trust that our data is safe with the providers. A large share of online businesses provides services to their users free of charge. In return, users (silently or officially) agree to have their data or fragments sold for profit to advertisers.
Take “free” email providers, for example. Advertisers can access your inbox and produce revenue through ads targeted at you while you read your emails. While this practice is common, it has nevertheless been subject to criticism, having caused an international outcry that reached the highest political levels. Such was the case in the Cambridge Analytica data scandal of 2018 when user data had been extensively harvested from user profiles of the world’s largest social network and sold for political advertising purposes.
In addition, several cases have come to light where user hackers captured the sensitive personal information of millions of users on international platforms.
The launch of Ethereum in 2015 and ICOs started paving the way for decentralized applications that harbor the colossal potential to solve this problem.
How can I use a DApp?
With a few clicks, would-be users create an in-browser cryptocurrency wallet, like MetaMask, which works with Firefox, Brave, and other widely used browsers. A MetaMask wallet is similar to Apple-Pay. It can be used to store, send, and receive Ether and ERC20 tokens and many tokens on the Ethereum blockchain.
After transferring Ether into the wallet, users can use funds to pay for online services or access DApps with Ether and ERC20 tokens, for instance, CryptoKitties.
What is a DApp and The future of DApps
More than likely, the next 100 million cryptocurrency users will enter the space not because they love cryptocurrencies, but because they want to use a blockchain-based social network, browser, or game they have heard of, and that app just happens to require cryptocurrencies.
In summary, DApps are still in their early days but they are likely not the next logical evolutionary stage of our current apps and online services, since they redefine how our data is used and how we can make and exchange money online.