Highlighting the key points of decentralized applications
TLDR; Summary
Dapps are decentralized applications. They are exactly like normal applications but their server and backend code runs on blockchains such as Ethereum. The main advantages of dapps are: censorship resistance, more security compared to their centralized counter parts, and no downtime which reduces the risk of failure.
What are they?
A decentralized application (dapp) is an application built on top of a blockchain network. They have a front-end interface(a way for users to interact with data from the blockchain) and a back-end code which are usually written via smart contracts.
The sudden limelight of decentralized applications are in tandem to the rise of their cryptocurrency counterparts — Bitcoin, Ethereum, Cordano, etc. Both dapps and cryptocurrencies are similar in that they remove single points of failure and centralized control from an organized party. They introduce a unique way to own an asset in a digital space and become immune to censorship.
How are they different from regular apps?
Dapps feel and look no different from regular applications, but behind the scenes, they have a unique way in storing and managing data. Here are some characteristics that make dapps different from apps:
- No owners. Once smart contracts are deployed and published to the Ethereum blockchain, the code cannot be changed or taken down — not even the team that created it (unless specifically programmed to be burned)
- Free from censorship. No entity can hack or takedown any data once it’s stored in the blockchain
- Anonymous login. Every smart wallet that you use to interact with decentralized applications are not tied to your identity unless publicly stated.
- Secured with cryptography. Allows for incredibly secure transactions and storage.
- No down-time. Data in blockchain is stored as copies in each of the thousands of different nodes around the world. This is different from a regular application that uses one centralized server. If one node goes down, another copy of the data exists in hundreds of other nodes.
Let’s compare an example of a popular application — Twitter and how it might act differently if they had a decentralized counter part.
Centralized: There are currently millions of users on Twitter and each have their own set of tweets. This data is not owned by the users but rather controlled by a single organization — the company Twitter. All of the user’s tweets and personal info is stored in the company’s centralized database, thus giving the company full authority over the application. All it takes is for a team or the CEO to make a decision and then a tweet/user’s account can be taken down.
Decentralized: This is where dapps diverge — once data is put into the blockchain, it would be near impossible to be taken down unless programmed to do so. A person can redevelop an application like twitter as a dapp where a user can do the exact same things as the original. But, once a user tweets and posts it in the blockchain, no one — not even the original user nor the developer can delete it. This is what makes dapps unique, incredibly powerful, and even scary all the same time.
The decentralization and anonymization gives complete ownership of the data to the user. This prevents the common issue of centralized platforms such as Google and Facebook from selling your data for revenue.
What are some examples?
- Bitclout — A twitter on the blockchain. “BitClout is not a company. It’s an open-source blockchain like Bitcoin. You can own a piece by buying the $BitClout coin.”
- CryptoKitties — A pet game on the blockchain. “CryptoKitties is a blockchain game on Ethereum developed by Canadian studio Dapper Labs that allows players to purchase, collect, breed and sell virtual cats. It is one of the earliest attempts to deploy blockchain technology for recreation and leisure.”
- CryptoVoxels — Digital real estate on the blockchain. “Cryptovoxels is a user owned virtual world. Cryptovoxels is a virtual world powered by the Ethereum blockchain. Players can buy land and build stores and art.”
- Uniswap — A decentralized cryptocurrency exchange. “A fully decentralized protocol for automated liquidity provision on Ethereum.”
What challenges do they face before mainstream adoption?
Let’s be clear — dapps are still ways from mass scale adoption, at least for now. Dapps are currently:
- Young and expensive — spending $100 on an Ethereum transaction is not scalable to the masses
- Hard to maintain — once it’s deployed, it’s harder to modify making it difficult to make updates to dapps
- Network congestion — during peek periods, there might be a chance that your transaction might fail unless you pay a premium
- Not UX friendly — setting up the tool stack and understanding how smart contracts operate is fairly complicated for those not familiar with blockchain
There’s also a slight learning curve when it comes to interacting with decentralized applications. The most common way is through Metamask where you have to install the chrome plugin, buy cryptocurrencies at an exchange, and then finally transfer it to your metamask wallet. This process isn’t frictionless and can be expensive. We still need to solve many UX and scalability problems plaguing many dapps in the current market before we’re off to the races.
Closing thoughts?
There is no doubt in mind that blockchain will replace a gigantic chunk of the internet in the future. A lot of people will also be very skeptical along the way.
This is similar to the rise of social media in the early 2000s. Many doubted companies like Facebook and Twitter and thought they were just a fad that will go away after a few years. The majority were hesitant in posting their info and pictures online. But look at where we are now.
We might look back 20 years from now and would probably think of no other way to run the internet without the blockchain. Just like how it became so natural for us to have social media accounts and carry mini computers in our pockets everywhere we go, blockchain technology will soon become a part of our every day lives.
We just need time and patience for the technology to mature and for the majority to understand the advantages of blockchain. But eventually, we’ll get there.
