DApps also called Decentralized Applications to work on decentralized networks as backend codes. DApps are not positioned by one individual company but work on a peer to peer network. DApp are programs that run on a P2P network of computers or a blockchain being outside the reach of one single authority. Bitcoin and Ethereum are good example of DApp.
Features of DApp
There are four specific features of DAPP
Open Source – Dapp is an open sourced network with a code that is available 24/7. They are ruled by autonomy ie the majority will rule and all changes are decided by users.
Decentralized – All data is stored on Blockchain. The records of operations of all applicants are stored publically on a decentralized blockchain to prevent centralization on a network.
Incentivized- Value is stored in the form of cryptographic tokens. The miners on the blockchain have to ensure the continuity of the chain by being incentivized.
Protocol / Algorithm – The application community has to agree on the cryptographic algorithm for generating of tokens. Proof of stake and proof of work are two protocol used by the blockchain currently. Proof of work is used by Bitcoin while proof of stake is used by Bitcoin Cash.
Three Types of DApps
Presently there are three types of DApps. These are
Money is managed by these Apps – Cryptocurrency is used for settling contracts. Users have to pay Ethereum in exchange for goods and services for settling contracts. Distributed computer nodes of the network are required for distribution of data.
Money & Outside Information Used by Apps – Smart contracts are executed not only with tokens but outside information as well. The outside information depends upon the data of contract.
Voting & Governance managed by Apps – Decentralized Autonomous Organizations (DAQs) are used by DApps to manage voting and governance on the network. There is no requirement for a leader or board members as community members can initially form their own rules concerning voting and governance amongst themselves.
DApps – Bitcoin & Ethereum
Bitcoin was the first DApp being a decentralized blockchain with Protocol Proof of Work. Bitcoin is defined as a self-sustaining currency where transactions are conducted efficiently without any intermediaries or a centralized authority.
On the contrary Ethereum is supposed to be a better and more satisfying DApp. Ethereum was invented keeping security, time and scalability in mind besides the main aim of decentralization. It has its own language Solidity that allows developers to conduct innovative and real life transactions by using smart contracts. Developers believe that Ethereum is a decentralized app store where countless apps can be published in order to find users.
The Future of Dapps
Presently we have just seen the trailer of a decentralized world with these DApps that will come in full swing in the near future. In the words of the CEO of Dapp fund David Johnston, these decentralized apps will one day outshine the largest software corporations in the world in utility, usage and network valuation. This will be due to the its flexibility, transparency, high incentivization and distributed nature.