What Is A dApp?
dApp (pronounced Dee-App or Dap) stands for decentralized application or distributed application. By definition, a dApp is “An open-source application that operates autonomously on a decentralized public blockchain. It cannot be controlled by any single entity, and it generates and uses tokens by following a standard cryptographic algorithm.” So, what does all that mean? Let’s take a look at the four characteristics that must be met before it can be considered a dApp.
- The app must be open-source and the code made available for all to see. It should be governed by autonomy, which simply means it runs on its own without any outside interference and changes to the app can only be decided by the majority of its users.
- It has to be decentralized and run on a public blockchain. For example, Bitcoin and Ethereum are public blockchains. This must be done to avoid the pitfalls of centralization.
- The app must have some sort of incentive like crypto-tokens or digital assets to reward validators of the blockchain accordingly. This means you get paid for participating in the validations of transactions.
- The application has to have a protocol where the network community agrees on a cryptographic algorithm to show proof of work. This is an algorithm used to confirm transactions and produce new blocks to the blockchain.
dApps And Ethereum
Bitcoin was the very first dApp. It operates on the Bitcoin public blockchain and was developed to process cross-border P2P transactions and to be used as a store of value. It is optimized for that function and nothing else. The Ethereum blockchain was brought to life in 2014 by Vitalik Buterin. Unlike Bitcoin, it was designed not only to be a digital dollar but rather “fuel” for a wide range of transactions. This “fuel” is called Ether and it is more of a utility or pay fee for running code or dApps on the Ethereum blockchain and interacts with smart contracts. At the moment, Ethereum is the largest blockchain platform by market cap and is home to most dApps but this can change over time as new platforms such as EOS are growing fast.
Types Of dApps
There are thousands of dApps available on different blockchains ranging from social to finance and media and the list is growing daily. Here are a few of the top distributed dApps for blockchain.
- Brave is an open-source web browser with nearly 9 million active users and pays them to browse the internet with Basic Attention Tokens (BAT) for watching advertisements. These tokens can then be used to reward one’s favorite publisher or content creator. You can also use the tokens to redeem gift cards, discounts, and digital goods.
- EOS Dynasty is an online role-playing game based on blockchain. Players create characters who fight battles to gain rewards and capabilities by collecting materials in the game. Players can also be awarded Three Kingdoms Tokens (TKTs), which can be staked for EOS dividend reward.
- MakerDAO is a decentralized credit service that runs on the Ethereum blockchain. It offers the DAI token that is the world’s first unbiased, stable, decentralized currency. Any individual or business can participate.
- TRACEDonate is a decentralized app that connects charitable donors and organizations to beneficiaries. Donations can be tracked so this gives donors peace of mind that the donations will be used for the intended purposes by those in need.
With so many types of dApps on the market, chances are you are using some of them without even knowing it. dApps are still in its infancy stage but are gaining in popularity especially in the finance and gaming industry.