DApps are leaderless applications that thrive on community collaboration. How sustainable is this model? Read on to find out.
Imagine Facebook, but without Mark Zuckerberg at its helm—sounds relieving, right? Well, that’s the concept of decentralized applications, or dApps. They are apps—akin to those on your phone—but without a single authority or entity controlling them. Today, there are approximately 4,000 dApps, with most of them existing on Ethereum. What’s more? Since October 2021, between 60 and 70 dApps have been launched every month. DApps have been around for nearly a decade now and are slowly beginning to pick up steam.
Here, we look at what dApps are and what’s in store for users in the coming years.
What is a DApp?
DApps are applications that function on decentralized, public blockchains or peer-to-peer networks. Blockchains are best known for their ability to eliminate intermediaries or leaders, thus enabling a completely fair ecosystem. When it comes to dApps, unlike traditional apps, there’s no single authority controlling—or possibly misusing (here’s looking at you, Zuckerberg)—the data. In addition to that, dApps are open source, meaning that everyone can see the code behind it. Any updates to the application must be approved by a consensus mechanism, such as proof-of-work or proof-of-stake. DApps must incentivize its users; that is, they have to produce and utilize tokens with which they reward miners and stakeholders. Most dApps have smart contracts at their foundation, where any process on the application must fulfill the contract’s “if…then…” protocol.
There’s greater user privacy on dApps, thanks to the autonomy offered by blockchain technology. Plus, the apps are nearly impossible to censor, as they are developed with the consent of a group of people. Some popular use-cases of dApps include games, such as CryptoKitties, shopping and trading cryptocurrencies on decentralized exchanges (DEX).
What are the types of dApps?
Largely, there are three kinds of dApps: type I, II and III. Type I dApps are set up on their own blockchain. For instance, Bitcoin. Type II dApps make use of an existing blockchain. For instance, dApp Omni Protocol is built on the Bitcoin blockchain. Lastly, type III dApps utilize the protocol of type II dApps; for example, the world’s first autonomous data network, SAFE Network is based on the Omni Protocol. In essence, the different kinds of dApps are interlinked, like various software programs are.
The pros and cons of dApps
DApps give users and stakeholders an opportunity to be involved with the applications and not become a victim of the self-centered agendas of the app founders. Any decision on the dApp must go through all the members and be finalized based on a majority vote. This way, you can rest assured of reliable and trustworthy behavior by members on the dApps. Plus, you are safe from hacking on dApps as outsiders cannot forge or modify data on a blockchain.
Still, dApps face a lot of criticism. For one, the low daily active user count has raised questions about their scalability. Secondly, it is difficult to maintain dApps because bugs or codes are difficult to modify. That’s because you cannot modify a smart contract once it’s executed. Additionally, the poor user interface of dApps often deters people from using them.
Do dApps have a future?
The Founder of a decentralized arbitration service Kleros, Federico Ast, is optimistic and hopeful about dApps’ future. He feels that any criticism is only temporary. He notes, “New technologies are usually received with skepticism. It’s easy to dismiss a new technology when you compare its very first iteration with the established versions of previous technologies.”
A GitHub report dedicated to dApps concluded that these applications boast “the potential to become self-sustaining”, as stakeholders are empowered and involved in their development. Hence, they won’t ever require a single decision-making authority. The report noted, “It is conceivable that dApps for payments, data storage, bandwidth and cloud computing may one day surpass the valuation of multinational corporations, like Visa, Dropbox, Comcast and Amazon, that are currently active in the space.” DApps might even prove a great alternative to traditional social media platforms by genuinely protecting free speech. If any offensive post is to be removed, it will require a majority vote. This way, no single authority can take down posts they don’t agree with.
Whether the prophecy comes true, and dApps replace some of the largest companies, is yet to be ascertained. However, as time and technology advance, it will be intriguing to experience how these applications do so, too.
Header Image by Freepik
