Decentralized applications, or DApps, are decentralized services that exist solely on the blockchain. Currently decentralized services can be categorized into three main types — decentralized exchanges (DEXs), decentralized storage solutions and cryptocurrencies. Blockchain is decentralized because all of the data is stored on multiple nodes, so even if one node goes down the others will still be able to access its data. DApps are decentralized applications that run on a blockchain platform just like Bitcoin and Ethereum do.
What are Decentralized Applications?
A decentralized application (DApp) is a program that can be executed on a peer-to-peer network of computers rather than a single computer or server. This means that all functions of the decentralized application will run on blockchain technology in order to leverage its decentralized nature and provide users with an open and transparent platform where they can transact directly with one another. For example, decentralized exchanges are able to provide users with an open and transparent platform for trading digital assets without having to trust any third party with their funds since no centralized service provider is required to complete transactions.
Examples of Decentralized Applications
Decentralized services have the potential for disrupting many of the world’s largest industries — finance, law, media, government/legislation and others. By supplying these services using blockchains from Bitcoin or Ethereum, anyone can leverage decentralized applications (DApps) in order to create value for themselves or others. Common use cases for decentralized applications include: decentralized exchanges (like EtherDelta), decentralized storage solutions (like Storj) and decentralized currencies (like Litecoin).
Example #1: Decentralized Exchanges
Decentralized exchanges provide users with an open and decentralized platform where they can transact directly with one another. Decentralized exchanges do not require you to trust any third party with your funds since decentralized services are operated by software which runs a network of computers, also known as nodes. Decentralized exchanges charge very low transaction fees because they do not have any centralized service provider and instead are run purely on blockchain technology.
Example #2: Decentralized Storage Solutions
Decentralized storage solutions, like Storj or Sia, leverage blockchain technology to create a decentralized peer-to-peer file sharing network that allows users to interact without having to trust each other or any third party.
Example #3: Cryptocurrencies
Cryptocurrencies represent the first widely used example of decentralized services offered to the general public. Unlike centralized fiat currencies (like USD), decentralized cryptocurrencies are not controlled by any single individual or entity. Instead, these cryptocurrencies are governed by distributed consensus networks that are based on blockchains from Bitcoin (BTC) and Ethereum (ETH). The benefits in using decentralized services provided by decentralized currencies are immediately clear — cryptocurrencies enable borderless, decentralized payment transactions that can be completed anywhere in the world.
In fact, decentralized currency exchange services like ShapeShift and Changelly have created exchanges that enable users to quickly swap any two types of crypto assets without having to register an account or provide any identifying information.
Example #4: Decentralized Social Networks
Decentralized social networks, like Diaspora and Steemit, represent another version of Facebook, that enable users to interact with one another without having to trust a third party with their data. Instead, these social networks are operated exclusively on decentralized blockchains, allowing users to directly communicate with one another without having to worry about censorship or network interference.
To read the full article, visit our website: Decentralized Applications: Creating Your First DApp — Sunvera Software