What are dapps?

What Are DApps?

What Are DApps?

Most of us associate blockchain technology with the cryptocurrency market. Understanding dapps (abbreviation for “decentralized applications”) which are also based on this technology and very important for the Ethereum project and cryptographic tokens exchange might help us understand how broad the specter of the possible usages of blockchain technology is. In addition, it can show us how those applications can be utilized for building up different business models in future. In this article, we will help you understand basic aspects of decentralized applications by explaining their appliance in the cryptocurrency trading with a special focus on Ethereum dapps.

Dapps in general

As it has been stated in the introduction, “dapps” is the abbreviation for “decentralized applications”. The word “decentralized” is one of the words that are often associated with cryptocurrency market. “Decentralized”, “peer – to – peer” and “open source”: all of that means that the code is available to anyone. It is based on blockchain technology which resembles crowdfunding mechanisms in business models.

In order to be considered a Dapp, an application must meet several criteria. The first condition is to be decentralized: all of the application’s activities are recorded on a blockchain. It also has to be open source which means it is controlled and maintained by its users based on common interests and mutual trust (consensus). Crypto coins make the dapp’s engine working. Dapps are based on the reward mechanism through which validators of dapp’s blockchain get cryptographic tokens. Additional criteria that could be useful for consideration (in case you find it difficult whether to rely on the distributer or not, or having doubts about application’s success within the specific market field) are inclusivity and transparent maintenance plans.

Getting familiar with the community (comparable to the business sector in the financial world) is very important for trust building. For example, if you want to build up an app for a certain market field, you need to get acquainted with the developers, idea makers and project leaders in that field. It is a trust-building mechanism that keeps a project working successfully.

Decentralized applications are among the most engaging concepts in the blockchain community. They operate as user-controlled services independent of any governing identity. They are used for different purposes, growing in number and becoming more and more important on the global market. Even though Bitcoin can be referred to as the first dapp, it is clear that Ethereum project and Ether as its cryptocurrency are probably the most popular and widely used tools for decentralized applications.

DApps Architecture

DApps Architecture

Dapps and blockchain

Even though the term “dapp” hasn’t always been exclusively associated with the blockchain technology, in recent years it gained a lot of popularity because of that relation. Traditional web apps have front-end clients and back-end servers. They exchange information by using a special language (JSON messages) and their interaction depends on the hosting service. The key difference between dapps and regular apps is in the technology used for writing (coding) the back-end servers. While traditional back-end servers use program languages such as Rails, Node or Django, back-end servers (supporting front-end clients that are written in HTML, CSS, and JS) are created by decentralized blockchain technology. That is why decentralized applications don’t need centralized hosting services and users have much more control over their sensitive data. As most of us already know, Bitcoin and Ethereum are two world’s biggest blockchain platforms (decentralized networks). The blockchain is a database that can keep a record of any kind of information. It consists of blocks that use hashes (distributed from one block to the next one) in order to get chained. The chain keeps a record of all the changes that happen to particular blocks.

Depending on the state of completeness, dapp’s blockchain can be changed or adapted, but all changes are governed by the consensus among the users. Ethereum meets all criteria to be considered a dapp.

Ethereum DApps Features

Ethereum DApps Features

Dapps and Ethereum

Ethereum project is a decentralized network of users. The network relies on the blockchain technology in order to distribute a cryptocurrency called Ether (cryptographic tokens). Its reliability is guaranteed through consensus mechanisms. Blockchain-based Ethereum smart contracts are technological means of the exchange. They are among the most reliable utilizations of the blockchain technology on the cryptocurrency market. “Proof of work” is a mechanism that grants that all the users have validated generation of the new blocks. It is a basis of consensus (also referred to as to incentivization). There are many decentralized applications built on Ethereum. They can be used for different purposes such as marketing, online gambling, gaming, fitness, voting, betting, investing etc. Their developers keep the track of the stage in which development is and let the other users participate. In case that you are interested in developing, there are several useful resources where you can find the inspiration and Stateofthedapps is probably the most popular platform and growing community that keeps enlisting new projects. 

As it has been stated earlier in the article, Ethereum’s blockchain technology is used to create smart contracts. They are used to create Ethereum dapps and it is your job to come up with the idea for an application that can make money without any special supervision. 

Dapps and future

Dapps are based on direct interaction between developers and users. Utilization of decentralized blockchain for purposes such as Ethereum smart contracts shows how broad the spectrum of possible appliances is on the global financial market. It will certainly grow even more. In order to actively engage in the development, it is crucial to get acquainted with program languages such as Web3 Javascript API, the JSON RPC API and especially Solidity that is used to build Ethereum smart contracts.  User communities such as Dapple and Truffle offer a lot of informative resources and practical solutions when it comes to different stages of dapps development. They also offer a lot of help with program languages that are used to design and maintain smart contracts. Many ideas and projects are still in experimental phases, but there are also many successful examples of peer – to – peer networking manifested in the business world which underlines the impression that cryptographic tokens are the future of commerce on a global scale.

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Author: Ben Prescott
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