Heard people talking about dApps but not sure what they are? In this blog we will simply define and explain them.
A Simple Explanation Of Dapps
A dapp or “dApp” is an app that runs on a decentralized network. That means it is accessible solely on the blockchain. They run without interference from a central authority, utilizing all of blockchain’s features such as a distributed ledger, transparency, immutability and encryption for security. At present, the majority of dApps are available on the Ethereum network.
The Power of Dapps
Scroll through your smartphone and you will almost certainly see many apps you already use every day – banking apps, Instagram, Uber, Airbnb to name a few. These are all centralized apps. They are owned and governed by an organization that has the capacity to make decisions at any time about how their app runs. A bank may hold or delay your money transfer for reasons unknown to you. Instagram might delete a post it deems inappropriate. Uber could cancel your account. These are all possible courses of action made by the organizations that run the apps. But with dApps on the blockchain, none of this can happen arbitrarily. DApps run in a public, open-source, decentralized sphere without the control or intervention of a single authority. They operate under the steam of smart contracts which are pre-written to execute under certain circumstances. Hence, the only way any of the above outcomes could occur is if they are written into the dapp’s smart contract. Because the blockchain is open source, that code is available to be viewed by anyone. Dapps also won’t sell your data to other organizations because they run autonomously.
The Growth Of Dapps
The market for dapps was $10b in 2019. his is expected to climb to $386b by 2027 with privacy, transparency, reliability and flexibility the main drivers. By that year, the leading blockchains hosting dapps are expected to be:
- EOS
- TRON
- Ethereum
- IOST
- Steem
- Neo
Different Types of Dapps
If there is an app, there can be a dApp. The finance industry stands to be one of the biggest users of dapps and the rise of DeFi (decentralized finance) is just the tip of the iceberg. There really is no limit to the kind of uses for dApps. The next five years is expected to see them explode in the following areas:
- Gambling
- Exchange
- High risk
- Gaming
- Online shopping
- Insurance
- Health
- Transportation
- Data storage
- Governance
- Real Estate
- Utilities
- Identity
Key Advantages Of Dapps
Privacy – dApps are fiercely protective of users’ privacy. There is no need to provide personal details and users may remain anonymous.
Security – encryption makes them extremely secure against the threat of hackers.
Speed – without third parties, transactions occur faster.
Reliability – because of its decentralized nature, data is immutable on the blockchain.
Key Challenges For Dapps
Scalability – concerns about whether dapps will be able to cope with the enormous traffic they are expected to attract, while still maintaining security, reliability and transparency.
Network congestion – the network can only cope with up to 15 transactions per second. There will need to be a solution to upgrading it when the entire world is using it.
Usability – dApps will need user-friendly interfaces if they are to enter the mainstream and eventually supersede apps.
Maintenance – apps are updated sometimes multiple times a week. But the difficulty of updating the code in dapps once they are published on the blockchain is a stumbling block.
Want To Know More About Dapps?
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