A decentralized application, or dapp for short, is a computer application that operates on a decentralized computing system.
Dapps have become prevalent thanks to the rise of blockchain and distributed ledger technology. Dapps are simply applications that run on a blockchain or distributed ledger technology.
As the name suggests, the application must be completely decentralized, with all activities being stored on a public distributed ledger.
There are tonnes of dapps out there. Technically, Bitcoin is a dapp. It’s a decentralized application that facilitates peer-to-peer value transfer. You can also think of them just like apps on your smartphone. There are games, gambling apps and much more out there.
Smart contracts are dapps too, which means platforms like Ethereum are host to tonnes of different decentralized applications. Blockchain platforms allow individuals to build them without having to create their own blockchain.
What’s the benefit of dapps?
The main benefit of dapps is in the name – it’s that they are decentralized. By being decentralized there is a strong level of trust. Dapp users know that there is no central entity that can control the dapp and use it for malicious reasons.
Decentralized applications store all activities publicly on a blockchain or a distributed ledger. By definition this means that all dapp activity is immutable and censorship resistant. As a result, dapp users can be certain that what you see is what you get.
Furthermore, a large number of decentralized applications are open source which builds additional trust. When the code base is visible and maintained by a community, users are able to audit the entire code base and verify that everything is kosher.
Of course, since they’re are decentralized they must be maintained by a network. As a result, the networks are set up so that network contributors will earn rewards based on their contribution. Therefore, individuals are able to carry out certain tasks to earn crypto while maintaining the integrity of the network.
Examples of dapps
EtherTweet is a social media platform that resembles Twitter. The difference is that content posted cannot be deleted – it’s stored on the blockchain forever. Therefore, EtherTweet is censorship resistant.
CryptoKitties is a game on the Ethereum network that allows users to collect, breed and trade cats. Believe it or not, when CryptoKitties first came about it was a massive hit. In fact, the immense traffic it caused ground the Ethereum network to a halt for a while in 2017.
An exchange that facilitates peer-to-peer trading with no central entity. In theory, true decentralized exchanges are immune to hacking because assets are never stored in a centralized wallet.
It’s a polarising topic, but blockchains host a lot of gambling dapps. There’s a variety of options, from standard casino games to more traditional sports betting.