What Is a dApp? Decentralized Apps Explained
|— Decentralized applications (or dApps) are blockchain-based alternatives to regular apps.
— They’re secure, transparent, and resistant to censorship, but they are still very much a developing technology.
— There are now well over 3,500 dApps, many of which provide similar functionality to the apps we know and love today.
Crypto is full of jargon, and dApp is another great example. Read on for a deep dive into what exactly the term means.
We all use applications. Whether it’s Facebook, Uber, Firefox, Spotify, or something else, apps have weaved their way into practically every facet of our lives.
Regardless if it’s a web, desktop, or mobile app, they all tend to work in roughly the same way. You download and install it, register for an account, and away you go.
But a revolution is underway and a new, potentially disruptive class of application- is beginning to emerge…
The decentralized application!
But before we get into what decentralized applications or ‘dApps’ are and how they affect you, let’s first take a look at the type of app we’re all used to dealing with.
The Problem with Normal Apps
Right now, odds are you use at least a dozen apps on a weekly basis. Ranging from ordering food, picking up a taxi, arranging a meeting, and booking your next Zumba class, apps are an integral part of our daily experience.
But despite the utility and benefit that many of these apps provide, there is a heap of downsides that can make them less desirable than they first seem. After all, they are generally owned and operated by corporations that might not necessarily have your best interests in mind.
Chief among these is the potential for data harvesting and misuse, since apps sometimes collect more personal data than we’d actually be comfortable with sharing.
This data can be sold to third parties without our knowledge. It can even be leaked if the app is hacked.
There’s also the problem of vendor lock-in. Have you ever tried to stop using an app or service, only to find that doing so would be incredibly impractical or expensive? Then you know the annoyance of vendor lock-ins.
It can be a frustrating experience to have no choice but to use an app you’re not happy with. You could be stuck with a contract or they could make it extraordinarily challenging to migrate your settings/data etc to another app.
Other users experience the exact opposite problem… They don’t have permission to use the apps they want due to local restrictions, censorship, and monopolies.
This is particularly obvious on social media since many social media companies have an agenda. Simply put, local regulators and governments can restrict what users may post.
Some countries have even taken it a step further, and banned social media outright!
Imagine never being able to access crypto Twitter again!? We can barely stand the thought!
We know what you’re thinking… “If only there were an alternative!”
Well, as it turns out, there usually is. Here’s where it’s time to get to grips with their decentralized counterparts—known simply as decentralized applications (or dApps)!
What Is a dApp?
So dApps are essentially blockchain applications that operate via smart contracts. This means that once deployed, the application is governed and exists in a decentralized manner. This is significant as, unlike an app on iOS or android, dApps are completely permissionless, and they can also self-execute. This means you anyone can use a dApp without needing a middleman.
How Do dApps Work?
Just like any regular app, dApps have a user interface that you interact with. This is where you essentially tell the app what to do by selecting options, entering info, clicking buttons etc.
But here’s where the magic happens. Whatever you do through the dApp is communicated back to its underlying blockchain through smart contracts. Essentially, smart contracts are just LEGO-like chunks of code for automatically carrying out functions, like sending a payment, using an in-game item, or placing a bid.
This gives dApps a number of unique properties that give them powerful capabilities.
Features of a Decentralized App (dApp)
Ever tried to find your favorite app, only to find out it has been blocked in your region or taken down? This is known as censorship, and it’s a major problem in many countries.
Although dApps, on the other hand, run on a decentralized blockchain network. To explain, a blockchain network uses thousands or potentially even millions of nodes (or computers) to host information. That means each node in the system holds a backup of the dApp, and if one participant corrupts the information, the other participants will know.
This makes them pretty much impossible to block—while also ensuring they’re accessible 24/7… no matter what. Making them perfect for crucial applications like health and personal finance apps.
For most blockchains, practically anybody can launch a node to add another backup of the dApp, and there are usually rewards in place for those that do—such as staking rewards.
Beyond this, some dApps adopt a community governance model. Accordingly, they give users a say in how the app grows and develops. This usually requires holding the dApps’ governance tokens, which give users voting rights.
Unlike most consumer apps of today, the code for many dApps is open source. This means anybody with the skill or desire can look into its inner workings. This makes it easy to know exactly what an app does, what data it uses, what permissions it needs etc—which often isn’t the case with regular apps.
This also means if a dApp isn’t quite up to scratch, the community can easily duplicate and launch an alternative version of it (known as a fork). This provides a strong incentive for developers to play fair… or risk getting forked!
Normally when completing a trade or deal, you would draw up a contract. This contract ensures both you and the counterparty holds up their end of the deal.
With dApps, this trust is no longer part of the equation. dApps are essentially trustless. They use smart contracts to automatically carry out whatever agreements you and the other users make.
Decentralized exchanges probably demonstrate this best, since they allow you to swap one cryptocurrency for another, without needing to trust that you’ll get what you paid for.
That said, you do need to trust that the dApp itself is safe. Which isn’t always easy.
Since dApps are on the blockchain, their transaction and upgrade history is transparent. Anyone can check the blockchain for the details.
This means if there’s an error, it is quite easy to pinpoint exactly when it occurred, who it affected, and often how the error came about. For example, if the error was the result of an exploit, you could read that using a block explorer.
This makes dApps super transparent, while also providing an incentive for developers to work in the best interests of you and the other users.
What Are dApps For?
In the last few years, dApps have been picking up serious momentum. Today, there are literally thousands available that cover a massive array of niches and industries.
Nowadays, you can now find a dApp alternative for many regular apps! And while there isn’t quite as much variety to choose from just yet, you can generally find something that interests you.
Some of the most popular uses for dApps currently include:
Social Media: There are also web3 social media apps. One such dApp includes Steemit—a popular social blogging platform. Decentralization could bring an interesting dynamic to social media apps, which are primarily governed by Big Tech.
Entertainment: The dApp industry also has its own YouTube equivalent, known as DTube; a blockchain-powered video sharing platform.
Unlike regular apps, you can access dApps via web3 browser (like MetaMask or Brave Browser). Bear in mind though, using a web3 browser can pose a risk. Thus, it’s always better to connect your web3 browser to a hardware wallet such as a Ledger device.
Will dApps replace Apps?
Although decentralized applications are often considered one of the holy grail of blockchain technology, they’re still largely experimental. Currently, dApps still have some growing pains to deal with before they can compete with their web2 counterparts.
Likely, it’ll still be a few years until you’ve got a dApp that achieves the same level of success as something like WhatsApp or Instagram.
And there are a few main reasons behind this.
For one, they’re often not the most intuitive to use. Many (but not all) dApps still suffer from user experience issues. Put simply, they don’t have the same funding web2 apps might do.
They generally also require you to be at least somewhat knowledgeable about cryptocurrencies, which can be a major barrier to entry. After all, just 1% of the world population uses or holds cryptocurrencies.
But perhaps most importantly, there is a general lack of awareness about what dApps are and the benefits they provide to users. This is a bummer, since there are many genuinely promising dApps out there.
Nonetheless, major strides are being made and dApps are gradually becoming better recognized. But it’s not just that, dApps are also becoming more powerful, and more widespread. That said, dApp users of today are still among the earliest adopters of the technology.