DApp, pronounced as “d-app” is a term that stands for ‘decentralized application’ and is used to refer to any application that is of decentralized nature and fulfill a certain set of conditions. Owing to dApps being a fairly new concept, it is yet to have a structured definition but to understand and identify what it really is, one must understand what qualities qualifies an app to be regarded as dApps.
Owing to Satoshi’s success with the creation of bitcoin and its blockchain, the world has since then continuously refined and applied the knowledge/concept to invent other cryptocurrencies and decentralized platforms, one of such innovations worth noting is Ethereum. Ethereum was first introduced in 2015 by Vitalik Buterin. What made Ethereum so successful is its introduction of ‘smart contracts’ which enable anyone to make use of the Ethereum platform in designing and running unique decentralized applications. A plethora of dapps has since then come in existence especially in the year of 2017.
What are the compulsory qualities of dApps?
As stated earlier, there are some qualities to look out for in identifying a dApp. These qualities are:
Decentralization
Just as the name suggests, dApps must be decentralized, that means all its operations and transactions must be done on a peer-to-peer network system of record keeping that eliminates the possibility of a centralized system of control and also keeps all records of operations on its blockchain.
A Cryptographic token must be present
A cryptographic token is one of the indispensable parts of a dapp. It is neccessary in order to provide access to the application. Any contribution of value from respective parties ( E.g.miners in the case of Bitcoin ) will be compensated with the tokens of the dapp.
Open source
All dApps applications must be open sourced, that means its code base must be available to be checked and reviewed by an autonomous group of people to rid it of centralization. These people allowed to make changes on the application are decided on some stated criteria for example some dApps allow early owners of their tokens to be able to make such changes to the system.
Consensus algorithm
A consensus algorithm ( acting as proof of value ) must be present to enable token generation.
Lastly, it is inevitable that for an application to be classified as a dApp, all its token and record keeping are cryptographically written.
Dapps can be classified into three main types. The classification is dependent on whether or not if they operate on their own blockchain.
| Category | Characteristics | Examples |
|---|---|---|
| Type I | Decentralized applications that operate on their own blockchain | Bitcoin , Ethereum |
| Type II | Decentralized applications that are based upon type I dapps' blockchain | Omni Protocol (Bitcoin's Blockchain), Tron ( Ethereum's Blockchain ) |
| Type III | Decentralized application that utilized the protocol of type II dapps | Maidsafe (Omni Protocol ), Tether ( Omni Protocol ) |
Depending on their primary purposes, DApps can also be majorly classified into three types namely; financial based application, semi-financial based application and others.
Financial based dApps – these types of dApps are all about financial contracts. They are about managing money, growing investments and transacting with their money in form of tokens.
Semi-financial dApps – these types of dApps are designed to perform other roles while still catering for money. For instance, while growing money/investment with this dApp services can also be rendered in order to facilitate transactions.
Governance Applications– some types of dApps are intended to not be financial. They are used for governmental and organizational purposes.
Before any dApp is introduced to the market it is expected to pass through a series of structured stages as below
White paper publishing - Firstly a team is put together to conceptualize and find a way to bring the dApp idea to reality. After discussing critical issues in meetings and coming up with a framework of all the proposed functions of the dApp, they are put in writing and published on the website as ‘white paper’. The purpose of a whitepaper is to inform prospective investors about the vision, concept, technical implementation as well as the execution plan of the project.
Token distribution / Initial Coin Offering - This is the stage where the project starts accepting investment from the public and distributing their tokens. There is usually a soft cap ( minimum amount of investment required to succesfully launch the project ) and a hard cap ( maximum amount of investment that is allowed during token sale ). Early investors usually get to enjoy some extra bonus.
Project Development & Product Launch – after the token sales at the ICO is concluded, the development of dApp will fully kick off according to the schedule specified on the dApp’s road map.
Ethereum is frequently mentioned in discussions about dApps because of the Ethereum Virtual Machine that allowed app developers to design their own dApp via Ethereum smart contract. The recognition of Ethereum role' as the predominant driver of dApp’s owes to the plethora of Ethereum based dApps in the market, some of which are Augur, Golem, Aragon, Status and so on. With that being said, ethereum is not the only smart contracts platform, there are plenty of competitors out that offer a similar platform with their own unique take respectively. Here's a list of smart contracts platform in the market currently.
| Types of smart contracts platform | Programming language |
|---|---|
| Ethereum | Solidity |
| Ethereum Classic | Solidity |
| Neo | C#, VB.Net, F#, Java, Kotlin, Python |
| EOS | C++ |
| Lisk | Javascript |
| Chainlink | Go Language |
| Waves | To be confirmed |
| Stratis | C# |
Owing to the economic value as well as the absolute efficiency that decentralized applications bring about, we are pretty positive about the fact that all existing services which are of centralized nature will be eventually taken over by decentralized alternatives. What do you think? Do you think that decentralized apps will be the future? We are interested to know your thoughts on the subject! Looking forward to your comment in the section below. 😉
Source:
What is a Dapp? An Introduction to Decentralized Application
