DApps: what they are and how they work
While most of us are still used to using centralized apps, blockchain technology has given rise to a new set of use-cases in recent years, such as decentralized applications (DApps). DApps are fast gaining traction, with billions of dollars in revenue and millions of users.
So what exactly is a DApp?
DApps are a blockchain-based decentralized version of consumer apps. They are not controlled by a single entity and operate through a network of nodes.
Because decentralized apps are constructed on blockchains using smart contracts, a single smart contract can theoretically be referred to as a DApp. They give users additional security, control, and privacy of data thanks to the underlying blockchain technology.
There are 4 key features that characterize DApps:
👉 The application must be decentralized, which means it cannot be controlled by a single entity.
👉 They are autonomous and operate without the assistance of a central entity, due to a consensus mechanism that verifies the value exchanged on the network.
👉 Any application change can be made only via consensus, consulting all network nodes.
👉 They are built on incentive-based crypto-economic models, with the generation and trade of cryptocurrencies being the most common.
Ethereum blockchain is the most preferred network to build DApps, and they are gaining traction in exchanges, gaming, and DeFi, followed by real estate, health, and insurance.
Other top DApp building platforms include Solana (SOL), Polkadot (DOT), and Tron (TRX).
You can read much more about the most popular DApps today, plus their pros and cons here 👇
