What Are Decentralized Applications (DApps)?

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gingerbreadfork
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5 min read

DApps can leverage the key benefits of cryptocurrency and perhaps change the way we think about apps.

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If you’ve been exploring the blockchain space in recent years, you’ve likely stumbled across the term dApp and wondered how exactly it differs from other types of applications that you use on your phone, computer, and the myriad of other places that apps are beginning to pop up these days. You may just be surprised by some of the innovative ways developers leverage blockchain technology for a range of different applications.

What is a DApp?

Decentralized applications (often just referred to by the abbreviation dApp) are applications that leverage blockchain technology. They typically consist of a smart contract at their core that controls the critical logic for the app, alongside some more traditional software to help enable users to interact with the contract as they would using a more typical web app or application.

DApps are created for a wide variety of use cases, be that entertainment, financial, social, and even some incredibly abstract concepts as developers experiment with what can be done with this technology. In addition, the blockchain (or, in some cases, P2P network solution) used by dApps enables them to become more decentralized than the typical app you may have on your phone or computer.

By exploiting some of the key aspects of what makes cryptocurrency powerful, dApps can provide access to powerful tools in a borderless, decentralized, and trustless manner that opens up an incredible amount of doors as to what is possible.

Advantages of Using DApps

If you’re someone who values privacy, owning more of your own data, and removing centralized authorities from how you transact or otherwise interact, dApps can be very advantageous. In many ways, dApps can also be resistant to certain forms of censorship and borderless in a way that enables more people to access tools they would otherwise find difficult or impossible to find otherwise.

DApps have the potential to avoid many of the problems that come with more traditional forms of institutions and applications and, due to their decentralized nature, can be powerful tools. The potential for downtime can also be significantly reduced the more a dApp relies on blockchain technology and leverages smart contracts for core functionality. In a situation where all the essential functionality provided by a dApp can be accessed by interacting with a smart contract, provided the blockchain hosting the contract doesn’t go down or otherwise fail, it can result in a highly reliable piece of software.

As transparently is often a key point to consider when thinking about using any particular dApp, a side effect is that most dApps are released as open-source software. Being open-source (or at least having essential parts accessible like contracts) results in far more transparency and the ability for anyone to audit the code at any time resulting in generally a more robust piece of software.

Some of the Most Popular DApps

Where DApps Can Still Improve

When using an app, you don’t usually think too much about how it’s doing what it’s doing, but often this is not the case when it comes to dApps. User experience is something that is definitely improving over time, but there’s still a long way to go to make things feel a lot more seamless for the user. Just because an app is using a blockchain doesn’t mean you necessarily have to know about it, just as you likely don’t pay much attention to what database, programming languages, or frameworks are supporting the applications you use daily.

Centralization is still an issue for many dApps. While it’s easy to say something is decentralized, there are a few core things that keep everything afloat and functional in many cases, for example, a dApp may heavily utilize a frontend hosted by a traditional hosting provider. While decentralization is in the name, it’s often more of a sliding scale than a hard and fast rule. So even though it’s challenging to reduce dependencies, it’s something that many dApps could be doing better and hopefully improve.

One of the most significant risks to a DApps is that bugs can result in total loss of funds. Many dApps focus on things that involve some form of value exchange and, as a result, end up controlling a significant amount of value. For example, suppose there is an exploitable bug in the smart contract. In that case, this isn’t an easy problem to solve once a contract is deployed, or as previously stated, it can be far worse if it’s exploited before the developers are aware of the danger.

Also, while the reduced requirements for human interventions that many dApps provide is very much an excellent feature, it does require you to take significant care when performing high-stakes transactions as there’s no one to call if you make a mistake. Furthermore, even if there is someone to contact, often there is no way to revert what was done even if you were able to reach someone. While this typically comes with dealing with cryptocurrency in general, it poses challenging UX/UI issues for dApp developers wanting to ensure that users are using their products correctly and safely.

Challenges Faced by DApps

  • Bugs can result in irretrievably lost or locked funds
  • Mistakes can be permanent, as with crypto in general
  • Many dapps are still very much experimental
  • Upgrades can be difficult after contract deployment
  • UX/UI challenges can be significant with blockchain technology
  • Adoption may be essential for some dApps to function optimally
  • Blockchain level limitations in storage, transaction cost, or speed

Which Blockchains Support DApps?

While once dApps and even just smart contracts themselves were quite rare things, there are both becoming far more common at an impressive rate. With many larger smart contract capable blockchains being EVM (Ethereum virtual machine) compatible, we’re seeing a range of apps being ported from one chain to another and new even more experimental variations popping up due to the open-source nature of many dApps. In addition, EVM compatibility can make it relatively trivial in some cases to expand a simple project from one chain to another.

However, this isn’t always the case, with some blockchains taking a different approach and using their own custom or preferred languages for developing smart contracts and, in turn, affecting dApps on those chains. While Solidity (the programming language used for smart contracts on Ethereum) is becoming quite popular, it isn’t the only direction a blockchain can take when implementing smart contracts. We’re even seeing some projects opt for surprising language choices like Haskell, which is the route Cardano has opted to take for both on-chain and off-chain code.

With bitcoin still dominating the market for storing value and providing an incredibly secure way to exchange value, newer blockchain projects are trying to differentiate themselves by offering newer features. One of the most popular has been smart contracts. So instead of asking which blockchains support smart contracts and dApps should rather be, which don’t.

Popular Blockchains that Support DApps

  • Ethereum
  • Avalanche
  • Polkadot
  • Celo
  • Solana
  • BNB Smart Chain

The Future of DApps

With the dramatic growth of dApps and the likely usability improvements that will come with further experimentation, the future of dApps will likely be more than a little surprising. Reinforced by growing layer two technology with fast and inexpensive transactions, increasing research, as well as the many other blockchain innovations on the horizon, the result is likely to be some incredible achievements over the next few years in terms of not just what dApps can do but how effectively they can do those things.

As interest grows in concepts like the metaverse and crypto continues to surprise even the most stubborn proponents, the future of these modern applications has a lot of potentials to impress.

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