- With the rise of decentralized finance, the adoption of dApps is growing.
- dApps work on blockchain and have unique challenges and benefits.
The ubiquitous presence of smartphones has made everyone familiar with apps. These small applications help users access a wide array of services conveniently. However, the knowledge of decentralized applications is limited to blockchain enthusiasts so far. In simple words, these platforms can deliver the same solution.
But they work on open-source blockchain mechanisms. So, what are these dApps capable of? Let’s find out with this comprehensive explanation of decentralized applications.
Decentralized Applications: In a Nutshell
These applications can work on phones, laptops, or desktops following the peer-to-peer mechanism. The decentralized mechanism sets them apart from centralized apps. While the latter takes total control of users’ information and funds, the former keeps them on a decentralized ledger.
So, the difference gets quite noticeable here. The centralized apps have absolute control over everything. They can use the user data in a way they please. On the other hand, the dApps share the ownership over the information and assets with everyone.
So far, most decentralized applications have been built using Ethereum. They can be used for delivering a wide array of services. From social media to gaming and finance, they can cater to all types of solutions to users. For blockchain and crypto enthusiasts, dApps are the obvious choice.
Still, they can disappoint some users with their limited scalability. To understand what dApps can and can’t do, let’s go through their pros and cons.
Merits of dApps
Promotes Privacy– With blockchain in the core, the dApps prioritizes privacy. It ensures that the information cannot be traded to any outsider.
Prevents Censorship– In centralized platforms, the apps aren’t answerable to their customer for everything. They can hide details and impose anything if they like. In a dApp environment, doing that is impossible.
Rules Out Data Misuse– When the data is kept on a blockchain-based chain, everyone knows who accesses it and when. It rules out the chances of data misuse.
Demerits of dApps
Less-Scalability– The dApps have shown scalability so far. They have been focused on a certain niche but haven’t been very adaptable.
Not User-Friendly Now– Another aspect that has bothered users is the less user-friendly interface. For technical limitations, they haven’t been able to be as convenient as their centralized counterparts.
Difficult Code Modifications– The language-based structure makes code modifications difficult for dApps as compared to centralized applications.
Use Cases of dApps
Finance– With the peer-to-peer mechanism, dApps are of great use to decentralized finance users. It is really useful for executing several solutions involving cryptos.
Supply Chain Management– dApps have proved immense usability in supply chain management. They have brought in more efficacy in various processes of warehouse and transportation operations.
Identity Verification– The blockchain mechanism does a great job of protecting the identity of individuals. It can be implemented by institutions and governments.
Real Estate– dApps optimize the buying and selling of real estate in many ways. They reduce the paperwork and bring more transparency.
Healthcare– In centralized mechanisms, keeping track of healthcare records is difficult. However, it gets very easy and safe in a decentralized environment. They also prevent the information from being sold to pharmacy companies unauthorizedly.
Education– Online education is already on the rise, but there hasn’t been very accessible for everyone. dApps can reduce the intermediaries in these platforms and bring down the cost.
Social Media– Social media is fun but it exposes individuals to many untoward possibilities. dApps can do a wonderful job of making this space safer and better.
Predictive Markets– Predictive markets can be tricky for all types of investors. The dApps can bring more rewards in this activity and make it easy for new investors.
Understand How dApps Work
dApps have three key attributes for proper functioning.
Open Source– Using an open-source base, they evaluate and store the data and maintain the exchange of assets.
Decentralized Storage– The decentralized blocks keep the data secure and shared with everyone on the network.
Cryptographic Support– The end-to-end encryption safeguards the data and makes it inaccessible to everyone.
As stated above, nearly all the dApps have been built on Ethereum. The platform uses cryptographic tokens to give access to users. On the front end, the decentralized and centralized apps are the same. But on the backend, they are different from each other. The centralized apps keep data in centralized databases and servers.
The decentralized version keeps them in the blockchain. As the adoption of crypto increases, dApps are getting more prominent among digital asset users. These platforms are helping institutions and individuals adapt to blockchain. Still, these applications have plenty of scope for improvement. Time will tell how successful will these dApps be in making crypto mainstream.
