I’m sure you are familiar with the concept of apps right?
You know, the apps that you use on your phone and those available on the App Store and the Play Store.
Well, Dapps are kind of similar to these applications.
However, unlike traditional apps that are built to run on particular devices, Dapps are built to run on a network using smart contracts.
These smart contracts are basically pieces of code that allow Dapps to run automatically without any intervening third parties.
In this way, Dapps are way more transparent in how they operate.
Because Dapps run on smart contracts, they are essentially open source, meaning that everyone can view exactly what they are supposed to do.
It means you can find out precisely how a Dapp works, the conditions needed to operate it, and so on.
Sadly, this is not the same kind of experience you get with a traditional, centralized app, as I'm sure you've noticed.
So, why are they called Dapps, anyway?
You’ve maybe guessed by now the ‘D’ in Dapps stands for decentralized.
This means that these apps are not controlled by any company, state, or person - no central authority.
Instead, they are owned and operated by a community, through the smart contracts they’re built on.
Therefore, a pretty awesome advantage to this is that these apps are censorship resistant.
Because they’re autonomous, nobody can interfere in the way they operate.
Another important thing to note about Dapps is that they’re seriously downtime resistant.
Unlike centralized apps that can often face bug issues or server problems due to failures in the central entities that control them, Dapps are run across hundreds or even thousands of decentralized computers.
But since we’re only scratching the surface here…
Let’s Dive Deeper into How Dapps Actually Work
Before I get to the inner workings of these decentralized apps, it is important to remember that Dapps are powered by blockchains, and not all blockchains are the same.
While a huge majority of all Dapps are built to run on the Ethereum network, some blockchains like Solana and Polygon are stepping up to offer the same utility on their networks too.
To better understand how Dapps work, let me first briefly explain to you how the traditional centralized apps work.
So, there are three key aspects of a normal app, right?
The first is called the frontend.
This is basically the user interface that allows you to interact with the app.
The second aspect is the backend.
This refers to the code and logic that determines how the app executes commands.
And thirdly, traditional centralized apps will often be built on a database.
The database helps to store data that makes the logic of the app work.
Now, instead of storing data on a pre-created database, all the data the Dapp needs to operate is stored on the blockchain ledger instead.
Also, unlike in a centralized app where the code is executed by the backend, for decentralized apps, the code is executed on the blockchain itself.
Make sense yet? Not to worry…
Here are some real-world examples of Dapps
A huge portion of Dapps these days are mostly used to conduct financial transactions on the blockchain.
There are however apps in gaming, shopping, and other categories too.
Nevertheless, one of the most popular Dapps in the crypto and decentralized finance world is named Uniswap.
This app allows users to directly swap one crypto for another without going through any third party or centralized entity.
Thanks to this, billions of dollars worth of swaps are performed on Uniswap each day.
As for gaming Dapps, Axie Infinity is a great example, too.
Built on the Ethereum chain, Axie is by far the most popular blockchain game ever created to date.
It works as a Dapp, operating across its chain - in a decentralized way using smart contracts.
Other examples of Dapps include Aave, a decentralized app that allows users to lend and borrow crypto from each other.
There’s also MetaMask, a hugely popular crypto wallet that allows users to store their digital assets on the chain.
These are all examples of Dapps which have been extremely popular, and it’s for good reason their popularity looks set to increase.
And that brings me to some of the key benefits of Dapps
The dawn of Dapps has introduced some incredible, new possibilities in the world of crypto.
They offer certain unique benefits that you won't get with centralized apps.
First and foremost, the fact that these apps are fully decentralized means that they cannot be controlled by any single person or entity.
They are owned and operated by the community and this gives users the power to decide how they want to interact with these apps.
Secondly, Dapps are also the main gateways to the blockchain world.
Because these apps are designed to simplify the interaction between people and these decentralized platforms, it lowers the barrier to entry for everyone.
Mass adoption of technology requires that even everyday, average folks can get at the benefits of blockchain technology without too much technical knowledge - and Dapps offer a way to do this.
A further benefit is that all data used by Dapps is stored on the blockchain.
This data has no single custodian, and so it cannot be exploited by any person for financial gain.
Because of this fact, Dapps are inherently more secure and guarantee protection for all users.
This is very different from centralized apps where the owners of these applications collect and commercialize user data - often without a shred of consent.
Unfortunately, it’s not all good news though...
Let’s take a look at the Downsides of Dapps
Well, there are a few things to keep in mind here.
First, Dapps are run through smart contract codes.
Once this code is written and deployed on the blockchain, it cannot be changed by anyone.
The negative aspect of this is that if the initial code was faulty, the app’s utility and safety will be significantly compromised for as long as the smart contract is being used.
Traditional centralized apps, on the other hand, can be updated regularly to address any emerging threats or problems.
Another negative point is that all the transactions on Dapps conducted and stored on the blockchain do not happen free of charge.
Users have to pay what is known as a “gas fee” for transactions to be validated and recorded on the chain.
These fees are basically like a handling fee, required by the network the Dapp is being run on.
For networks such as Ethereum, these fees can be pretty high, which could in turn lead to a less-than-desirable uptake of the technology.
A final disadvantage is the pretty steep learning curve that comes with using Dapps and understanding blockchain technology at the moment.
It's not as straightforward as using a regular app, which could make widespread adoption slower.
Hopefully, because of articles like these - you might just be a step closer to getting on board and enjoying the benefits of Dapps!
Conclusion
In this article, you've taken a deep dive into the world of Dapps, looking at how they differ from the traditional apps you’ve seen before.
You saw that Dapps, standing for decentralized apps, are unique because they work on blockchain networks and use smart contracts.
This makes them transparent, automatic, and resistant to censorship or downtime.
You also learned why they're called 'Dapps', from their decentralized nature, with no control from a central body, instead, being community-driven.
Through real-world examples like Uniswap, Axie Infinity, Aave, and MetaMask, you've seen Dapps' diverse applications, from financial transactions to gaming.
I've also discussed the benefits Dapps provide, like giving back to users, simplifying blockchain platforms, and enhancing security.
But you also saw the downsides, such as unchangeable smart contract codes that could leave room for long-term errors.
You also learned that 'gas fees' can sometimes get hefty, particularly on the Ethereum network!
In essence, Dapps offer an exciting, new way to interact with digital applications.
Despite their challenges, they’ve got incredible potential and their journey has only just begun.
As technology moves forward, digital applications are expected to make serious transformations thanks to this technology.
That’s it for this article. Hope you enjoyed reading it and catch you for the next one!
