What is Dapp? Its meaning in decentralization

What is DApp?

DApp is short for Decentralized Applications, a new type of blockchain application that is changing the way businesses operate.

Because of the decentralized nature, DApps are completely permissionless, meaning they are not controlled by any authority. A DApp uses blockchain technology and runs on a peer-to-peer network, which is completely opposite to a single computer network. In a peer-to-peer network, information is continuously distributed among participants instead of being stored on a central server. Peer-to-peer networks suffer from slower speed and performance compared to centralized servers, and they will be reinforced as the number of participants increases.

The application history is a long process

Since 1983, Steve Jobs has talked about what is now known as the app store. At that time, users were required to purchase apps before actually trying them out. In this way, Steve Jobs explained how an app store could break the current model by using a similar record store. People know which record they want to buy because they get a free sample on the radio.

In Jobs' vision, the software industry needs a similar approach where users can preview the app and then download the full version. A quarter century later, in 2008, the Apple App Store was launched.

Known as an important 'user interface moment', the start of the App Store allowed developers to easily create and upload their own applications, generating revenue and reaching millions of people. At the same time, regular users can access countless new programs simply by downloading and/or purchasing them from the app store.

How many types of dApps are there

Currently, there are three different types of DApps in the market:

Type 1: DApps with their own blockchain.

Type 2 : DApps use Type 1 DApps to operate: these DApps are protocols and must have tokens to operate.

Type 3: DApps use the protocols of Type 2 DApps, but also serve as issuance and token request protocols.

Ethereum is currently the most popular DApp platform and is a great example of a Type 1 DApp. Other popular platforms include NEO, EOS, and Bitcoin. Many Bitcoin DApps are moving to platforms like Ethereum for faster speed and greater flexibility for various use cases.

DApps built on the Ethereum protocol are an example of type 2 DApps. Examples include: The 0x protocol built on the Ethereum blockchain to empower decentralized exchanges.

Type 3 DApps are built on existing Type 2 protocols. An example of a Type 3 DApp is the decentralized exchange DDEX, operating on the 0x protocol.

A question that people may ask is whether the development of new DApps can affect the price of Bitcoin or the price of Ethereum. There is no clear answer to this question. When these DApps develop strongly, the demand for that cryptocurrency will increase, which is a good sign for the price increase of that coin. On the other hand, when these DApps develop, it will slow down the network, increase transaction time, which could hurt the price of that coin.

For Bitcoin, it is a leading global peer-to-peer currency and has limited DApps compared to Ethereum, so the number of DApps is not enough to affect its transaction volume, so DApps on the Bitcoin network may not have a negative impact on the price of Bitcoin.

As for Ethereum, although it experienced a significant price surge in 2017 due to the potential of smart contracts (a type of DApp), the future network demand could positively impact the price of Ethereum. However, it also depends on whether Ethereum can scale its network to meet the future demand of DApps or not.

Dapp Applications

The potential applications for these blockchain DApps are endless. They can solve many real-world problems in a variety of fields such as: identity verification, supply chain management, food delivery, music services, and a host of other functions that will become clearer as blockchain technology is further developed. All of these industries can benefit from DApps by enhancing application security, integrating with cryptocurrencies, and without interference from external parties.

DApps Ethereum

To access dApps requires a specific Ethereum browser. One common example of a dApp is Augur, a decentralized prediction market that directly interacts with the Ethereum network without going through intermediary servers.

Two other examples are the Mist and MetaMask wallets. As a dApp, Mist wallet is one of the longest-standing applications on the Ethereum network. It allows users to interact with their wallet and with permissioned applications on the network. However, Mist requires users to download the Ethereum Blockchain. On the other hand, MetaMask provides a simple browser extension that can turn your web browser into an Ethereum browser.

However, the road to decentralization will be very long, and Ethereum is still very young. Although there are hundreds of projects using its Blockchain for crowdfunding, few truly decentralized applications have been deployed, and even fewer applications are truly excellent. Most Ethereum projects still use centralized components to deliver their products.

For example, one of the first gambling dApps on Ethereum can be easily used by sending transactions to the corresponding smart contract address, which will then handle the entire process. Although smart contracts are the main component of the project, it still relies on a centralized website to display addresses and provide a user interface.

Other projects are using Ethereum Blockchain as one of many components of their project rather than for deploying specific dApps. These components may include transactions and layers of incentives for stock issuance mechanisms and other valuable token types. In most cases, Ethereum is not much different from an ICO platform.

Are DApps being abused?

Many permissioned applications have been exploited on the “force majeure” dApp, using the term “permission” quite freely. It is now clear that the road to full-fledged permissioned applications will take many years. Until then, it seems that the market may become saturated with all the specific application tokens and coins being issued daily.

With most developers leveraging new tokens for purchasing, advertising, and rewards within applications, the lack of interaction between dApps is an inevitable result.

Not only does the monopoly built by companies like Google and Apple harm developers and users economically, it also brings additional issues such as lack of transparency in app store approval and lack of privacy for users whose data is collected and sold without their knowledge.

To solve this problem and the inherent issues in the traditional application industry, one of the world's most popular app stores has introduced a new protocol for applications and app stores that can serve as a common platform for complete decentralization.

The system is introduced by the store to eliminate the power from intermediaries such as Google and Apple, who reap most of the benefits from developers' work.

Con **

This system enables applications and app stores to become more efficient for developers and users. App developers also benefit from a reputation system that extends to all app stores using the protocol.

Although applications and app stores will never be fully decentralized, this path can create an important platform for a decentralized app economy. Once the first steps are taken, technical advancements can be made to ensure that these apps are capable of being attack-resistant and 100% auditable.