A Beginners Guide to Decentralized Applications (DApp)

A Beginners Guide to Decentralized Applications (DApp)

To be able to understand clearly what a DApp is, you must first have an understanding of the meaning and concept of Ethereum. A DApp or Decentralized application is a computer software application that runs on distributed computing networks. It is not hosted by any central server but instead by a peer to peer decentralized network. The first known DApp in the world is Bitcoin. And most DApps focus on money management and simplifying money transfer.

DApps have been made popular by the Ethereum Blockchain, where they are also called smart contracts.

Features of DApps

  1. A part of the backend code for a Dapp is written when one is creating an Ethereum smart contract.
  2. All or parts of DApps are built on top distributed computing networks such as Ethereum and are stored on and controlled by a blockchain system.
  3. They are open-source, decentralized, and are stimulated by rewarding those who validate the application.
  4. It can have frontend code and user interfaces that can be written in any language and make calls to its backend.
  5. Unlike normal phone applications or computer software which runs on centralized servers, DApps run their backend code on a decentralized peer to peer networks such as Ethereum, Loom, and Waves.

Online gambling sites have adopted DApps. Gaming companies and even some financial institutes such as decentralized finance (DeFi) protocols use DApps.

Some of the examples of DApps include the following:

Augur: a prediction market platform (developed by Jack Peterson, Joey Krug, and Jeremy Gardner in 2014).

Blockstack: it is a platform that is used to develop DApps.

Steem: it is a platform that is based on blockchain technology, and the publishers are rewarded with cryptocurrency.

Uniswap: it is a DApp used for cryptocurrency exchange.

Cryptokitties: it is a game based on Ethereum and, due to its popularity, once slowed down Ethereum due to insufficient transaction processing.

Golem: it is used to utilize idle computer power.

Advantages Of DApps

  • Users can maintain control of their data
  • It can accept cryptocurrency as a form of payment
  • It removes transaction fees
  • It generates income for its users
  • It has no central authority or monopoly (no one controls it)
  • It is open-source
  • It reduces the risk of hacking and app security threat

Disclaimer: The information in this article should not be considered financial advice, and FXCryptoNews articles are intended only to provide educational and general information. Please consult with a financial advisor before making any investment decisions.

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