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DApps are decentralized software programs with backend code executed on a distributed computer network. This is contrasted with conventional applications, typically hosted on centralized servers. In conjunction with blockchain-based innovations, this gives decentralized applications (DApps) distinct characteristics and disadvantages.
This article will examine what makes DApps unique, its benefits, and the obstacles they must overcome to become a genuine competitor to the centralized model. So...
What are DApps?
But first, it must be noted that decentralized applications existed long before the advent of distributed ledger technologies. Platforms were utilizing peer-to-peer networks, such as Napster. Blockchain technology, particularly Ethereum's rise to prominence, popularized both the concept and 'dApp.
Why, then, Ethereum? Blockchain technology is quite a bit older than Vitalik Buterin's invention, with several blockchain protocols already in existence when Ethereum appeared on the scene. The short answer is intelligent contracts.
Ethereum was designed to be a general-purpose blockchain capable of supporting applications. To accomplish this, Ethereum implemented a Turing-complete programming language called Solidity, an old concept inspired by vending machine design. Ethereum popularized the implementation of smart contracts in blockchain dApp development companies. Ethereum has remained the dominant platform for smart contracts and DApps.
Intelligent contracts are the vital organs of decentralized applications. These programs execute themselves and are used to define the logic of decentralized applications. A smart contract is essentially a decentralized application because it already provides backend functionality to its native blockchain. Combine this with a user interface capable of making calls to the backend, and you have a blockchain-based application that resembles a conventional app. You can write multiple smart contracts to build more complex applications and add more functionality.
Centralized vs. Decentralized Apps
Given the prevalence of centralized apps and our familiarity with them, the question arises as to whether DApps are even necessary. Ultimately, the centralized model is effective and, in some ways, superior to the decentralized approach. DApps, in their current state, have several bugs that need to be fixed. However, they also have several substantial benefits that hint at their great potential, even at this early stage in the evolution of DApps. So let's examine what dApps bring to the table and how they compare to centralized applications.
Security
This is one area where decentralized applications excel. Due to the nature of DLT, DApps are inherently very secure. Decentralized systems based on blockchain or other distributed ledger technologies circumvent the single point of failure issue inherent to centralized server-based systems. Moreover, blockchains and DLTs are highly resistant to malicious attacks due to their robust consensus mechanisms. Another significant benefit of DLT systems is that they are immutable, meaning that data stored on such systems cannot be altered or otherwise manipulated.
Speed
This is one of the issues facing the current generation's blockchain platforms and decentralized applications. All of this stems from the limited scalability of blockchain technology, making it difficult for most blockchain networks to process large volumes of transaction data simultaneously. This frequently causes network congestion, especially when dApp usage is high. The digital collectibles game CryptoKitties became so popular shortly after its release in 2017 that it clogged the Ethereum network.
Cost
The scalability issue also results in increased blockchain network usage costs. Since transaction processing requires payment of miner fees, network congestion results in significant cost increases, as users must pay more to have their transactions processed more quickly. Ethereum has a long history of increasing gas prices due to heavy network usage.
Solving the scalability issue has been one of the blockchain community's top priorities. Ethereum has already implemented several Layer 2 scaling solutions with promising results. In addition, the platform is undergoing a major transformation as it transitions from proof-of-work to proof-of-stake and implements sharding. These enhancements are part of the Ethereum 2.0 project and are intended to make Ethereum more scalable by reducing transaction fees and energy consumption.
Openness
In contrast to centralized applications, one of the greatest advantages of DApps is that they are open and permissionless. Since decentralized public systems such as Ethereum are not under anyone's control, it is impossible to restrict access to a specific dApp. Consequently, there is no censorship in decentralized applications. However, the openness of dApps has an even greater impact on the development side of the industry.
All DApps are essentially open-source, enabling developers to build upon each other's work, combining and recombining various elements from different projects to create new types of applications and services. This fosters innovation and allows the space to grow and evolve in interesting and unexpected ways.
DApps Today in the Real World
As a result of its ability to attract development talent and foster innovation, the blockchain space has already become home to a variety of decentralized applications, and developers are continually exploring new ways to implement the technology. There are already several areas where DApps show great promise.
Decentralized finance (DeFi)
Unquestionably the strongest use case for DApps at present, DeFi applications are attracting significant investor interest and fueling a $40 billion market. The rapidly expanding DeFi industry intends to challenge traditional finance by introducing new ways to borrow and lend money and by enabling the development of innovative financial services such as liquidity mining.
Enterprise Solutions
Blockchain-based solutions have the potential to disrupt numerous industries and assist businesses in achieving greater growth and operational efficiency. Already, enterprise-grade DApps have impacted several sectors, including supply chain management, healthcare, and the pharmaceutical industry.
Gaming and Digital Collectibles
As previously stated, the first decentralized application to gain significant popularity was a game. Following the launch of CryptoKitties, several similar projects have attempted to replicate its initial success. And while none of these have achieved the same level of popularity, games like Decentraland and Gods Unchained demonstrate that gaming DApps are still in high demand. Moreover, the recent proliferation of non-fungible tokens has shown the viability of digital collectibles powered by blockchain technology.
In Conclusion
While blockchain technology is still maturing, there is already a strong case for decentralized applications. And as the technology continues to grow, dApp development will only expand, allowing for the creation of more sophisticated applications and new categories of DApps. It remains to be seen whether decentralized apps can supplant conventional apps, but they will play an important role in the digital future.
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Author Bio:
Stephenie Peterson is a marketing specialist. I have been a writer for over 6 years, and my expertise lies in metaverse development, crypto, blockchain, blockchain dApp development, NFT, DEFI Development, and much more.
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