Decentralized Applications (DApps) Definition
Decentralized Applications (DApps) are digital applications or programs that reside and operate on a blockchain or peer-to-peer network of computers, rather than a single computer, and are unaffected by a single point of failure.
Decentralized Applications (DApps) Key Points
- DApps are applications built on blockchain technology.
- They operate on a decentralized network and they are not controlled by any single entity.
- DApps are resistant to censorship and single points of failure.
- DApps are open-source such that the application’s base code is accessible to all and no single entity has proprietary control.
- DApps reward network participants and users with tokens or digital assets.
What is the purpose of Decentralized Applications (DApps)?
The main purpose of DApps is to provide services that are open, decentralized and incentivized. Using blockchain technology, they bypass centralized authorities or intermediaries like banks or tech companies that traditionally control services and transactions. They allow for direct interactions between users and providers. They often make use of smart contracts to perform operations and possess a token system to incentivize network participants.
Why are DApps necessary?
DApps are necessary because they offer a higher level of trust and transparency than traditional centralized applications. As they function on a blockchain, all transactions are publicly visible and immutable, meaning they cannot be modified or deleted. This gives users assurance that their interactions are secure and trustworthy. In addition, DApps can operate continuously without downtime, as they are not reliant on a single server or provider.
Who can use DApps?
Anyone with internet access and the necessary digital tools can use DApps. One of the biggest appeals of these applications is that they are open to anyone and are typically not controlled by any particular entity. This means that no user can be denied service or access based on their location, identity, or status. They are particularly popular within the cryptocurrency community but can offer solutions for a broad range of sectors including finance, governance, and gaming.
Where can DApps be found?
DApps can be found across various blockchain platforms, running on various protocols. The most common platform for DApps has been Ethereum, but others including EOS, TRON, and Binance Smart Chain have also become popular. High-quality DApps are usually listed on blockchain app stores, or DApp directories such as State of the DApps or DAppRadar.
How do DApps function?
DApps function by utilizing a blockchain’s decentralized and immutable nature. They run on a protocol that uses a consensus mechanism (like Proof of Work or Proof of Stake) to agree on the state of the blockchain. This means every transaction on the DApp, from data transfers to updates, is agreed upon by the entire network. Furthermore, as DApps are typically open-source, any proposed changes to the DApp’s basic function are usually agreed upon by the community, maintaining the democratic values key to decentralized systems.
