Golden Encyclopedia | What is a decentralized application (dApp)?

Author: Cryptobunq Source: medium Translation: Shan Ouba, Golden Finance

Decentralized applications (dApps) are open source peer-to-peer networks running on blockchain technology, used in various industries such as games, medicine, governance and file storage.

They can securely store, trade and share digital assets, including games and domain names, and have features such as multi-factor authentication, secure login and ICO protection.

With the development of Bitcoin in 2009, decentralization has become increasingly important, allowing customers to negotiate without middlemen like financial institutions.

DApps built on the same blockchain concept provide a decentralized alternative to traditional applications, providing higher levels of protection, transparency and adaptability.

In addition, they store customer information on the blockchain, ensuring that it is safe and cannot be touched by external parties. DApps can run independently of any central authority, making them censorship-resistant.

Similar to BitTorrent, they allow users to store files worldwide and maintain full control of their encryption keys. Because dApps are open source, anyone can contribute to their development, allowing coders to expand them independently of a single authority.

How do dApps work?

Decentralized applications (dApps) run on blockchains such as Ethereum, providing a public, open source, decentralized environment that is not controlled or interfered with by any single authority.

Because they are open source, anyone can view, modify, and use the resource code. DApps run on attack-resistant networks, provide highly scalable functions and features designed to improve user experience and protect privacy.

The backend code of dApps relies on a decentralized P2P network, making it impossible for a single institution to control them. Smart contracts that use blockchain to apply rules and process transactions are also backed up.

Ethereum’s blockchain system stores dApps and verifies them using cryptographic tokens. This encourages collaboration and development, which creates a variety of dApps with different functionalities.

Why are dApps important?

Decentralized applications are a new P2P economy that offers benefits such as zero downtime, greater censorship resistance, and the ability to develop features that are impossible with centralized applications.

In addition, they offer transparency and immutability, where data can be modified or deleted without the consensus of the entire network.

This makes dApps ideal for applications that require a high degree of transparency and protection, such as monetary services, supply chain monitoring, and voting systems.

DApps are decentralized and run on a peer-to-peer network, which makes them less vulnerable to hacking and data breaches. However, dApps can be difficult to update and maintain due to the approval of the entire blockchain network, which makes them vulnerable to attacks and hacks.

DApps are used in various industries such as financial transactions, supply chain management, real estate sales, medical data storage and tracking, education, social media platforms, and prediction markets.

Various industries can use them to build decentralized learning platforms and decentralized prediction markets. They also help healthcare professionals, students, and teachers communicate and collaborate on social media.

What is the difference between Web3 and dApp?

Web3 and dApp are two different technologies that aim to create an ultra-secure, trustless, and autonomous network using blockchain technology.

The World Wide Web of the crypto ecosystem is called Web3, and a Web3 application is any blockchain-based application that is connected to a crypto wallet. It includes games as well as DeFi and NFT platforms.

Web3 has a wide range of dApps, such as games, financial services, and social and content sharing features, creating an ecosystem that blends social media and decentralized networks.

DApps, or "decentralized applications," based on blockchain technology, enable service providers to collect and monitor users' online data and browsing habits. Consumer brands then use this information to create more relevant advertisements.

DApps work similarly to regular applications, but without a central server, no single entity has greater power over them. Users usually need to buy tokens before using dApps, which help build the blockchain environment.

They include smart contracts and utility tokens, which are the main blockchain payment methods for using services or purchasing digital goods.

Are dApps a short-lived trend or the long-term answer?

Decentralized applications are computer systems that run on decentralized networks, or blockchains, offering users a future that is not controlled by companies.

These applications offer new opportunities for blockchain gaming, trading NFTs, and investing in decentralized finance (DeFi) on a network that treats everyone equally.

They rely on a network of computers rather than a single entity to perform their functions. This makes them less vulnerable to vulnerabilities such as hacking or information breaches.

They can be more transparent and secure because anyone can see the code and transactions on the blockchain. With all these advantages, dApps are gaining popularity as a long-term solution for the future of finance because they offer privacy protection and control over digital property.

While some believe that the current craze surrounding dApps is just a short-lived trend, others believe that they are mainly used by early adopters and cryptocurrency enthusiasts.

Despite some skepticism, many believe that dApps are the ultimate solution to the various problems facing today's technology industry because they offer greater privacy and personal control, allowing people to maintain control over their information and choose to access it.

How will dApps change the blockchain industry?

Decentralized applications are revolutionizing the blockchain industry, supporting new business models, reducing intermediaries, and enhancing privacy by storing user data on the blockchain, preventing unauthorized access and data leaks.

For example, the music streaming dApp Audius connects artists directly with fans and creates an immutable record of their work on the blockchain, allowing performers to monetize their work.

DApps also offer enhanced privacy, reduce downtime and reduce central data storage by sharing only what users want. They use blockchain networks for decentralization and often contain smart contracts for asset and data transfer.

In addition, they offer a wide range of other uses, including peer-to-peer financial transactions, supply chain management, identity verification, property ownership tracking, and healthcare-related activities.

In addition, decentralized applications guarantee transparency in financial transactions by recording and easily proving transactions.

Thus, dApps can create new business models using smart contracts, making them transparent, tamper-proof, and automated, and reducing the need for intermediaries with the power of blockchain technology.