The world of centralized apps
When you use almost any web or mobile application, such as Gmail or Dropbox, for example, you entrust your data to a certain company. So do thousands of other users utilizing the same app.
You have no way of knowing how your data is being processed afterwards. Remember the Facebook’s Cambridge Analytica scandal? Yes, that one.
Even worse, license agreements you have to sign before using programs tend to be hard to understand and easy to misinterpret.
But what if we didn’t need to share our data with companies – just with the transparent, open-source algorithm? Apart from the improved data security, that would eliminate the single point of failure as well. dApps aim to do just that.
What is a decentralized application (dApp)?
A dApp is a program that operates on a decentralized network. This represents a big difference from traditional apps, which often operate on centralized servers.
Contrary to a common belief, dApps do not necessarily run on blockchains. They can operate on any decentralized network: blockchain, DAG, BitTorrent protocol etc.
There is no single opinion on what qualifies as a dApp. However, decentralized applications often share several common traits:
- dApps lack a central point of failure. Centralized apps can be brought down by attacks, both virtual and physical (cutting off server power supply, for example). In order to bring down a certain dApp, on the other hand, you would have to bring down the whole network it operates on. Obviously, stopping several hundreds or thousands of nodes around the globe from working is much harder than doing the same to a single server.
- Decentralized applications are usually open source. That means that anyone is able to see the source code of a dApp. What’s more, a skilled developer could copy the code of a dApp, modify it, and launch its own version alongside the original. Of course, it isn’t necessarily going to be popular, but it can theoretically be done.
- They have a decentralized consensus algorithm. In order to work, the network has to have a way to determine which transactions are trustworthy, and which are not. For example, Bitcoin uses PoW (here’s how it works) for this, while some other cryptocurrencies use Proof-of-Stake, Proof-of-Authority and other mechanisms.
- dApps often use their own internal currency. The nature of many dApps, such as CryptoKitties, means that they need their own token to work.
What can dApps be used for?
Just like traditional applications, dApps can be used for a variety of tasks. Here are some examples of dApps and their functionality:
- PopcornTime – a movie-streaming service based on BitTorrent protocol. Because it is completely free, its use is technically piracy. Do not use it – it is illegal. The main advantage of decentralization for this service is censorship resistance – something that comes handy for the service that regulators are eager to ban.
- Steemit – a Steem-based social network. It allows readers to reward creators by upvoting their content. Each upvote grants the writer a certain amount of Steem Power and SBD tokens, which can be exchanged for BTC, for example. At the time of writing, Steemit is one of the most popular social dApps.
- Antube – a video platform that works in a similar way to Steemit. However, unlike Steemit, the dApp also allows users to earn tokens by viewing ads. The program is based on Klaytn, so it is not as decentralized as other apps in this list. It is pitched as a mobile-first platform.
- NEOfish – a collectible game based on NEO blockchain.
- TronTrade – an exchange that allows users to buy and sell tokens based on TRC10 and TRC20. Based on – you guessed it – TRON blockchain.
- MakerDAO – a platform which allows anyone to borrow DAI stablecoin in exchange for depositing a certain amount of ETH. It is one of the most renowned Ethereum dApps.
Even though there are many platforms competing for dominance in dApp field, only 4 of them have a market share over 10%. Take a look at this chart:
As it can be seen from the chart, with just several thousand users, dApps are still far from being mainstream.
However, user count is not the only stat that matters. The leader in app count, Ethereum, dominates this metric. Here is the number of dApps each of the top-4 platforms has:
Important note: keep in mind that almost a thousand of these dApps are abandoned, meaning that the chart may not accurately represent the market distribution. Still, it should give you an idea of which platform is the most popular amongst developers.
Ethereum – the pioneer of dApps
One of the first blockchain platforms to support dApps, Ethereum is the leader of the field. The platform, which raised more than 3500 BTC back in 2014, now has more than 20 000 daily users and over 2500 dApps.
Ethereum works by providing decentralized Ethereum Virtual Machine (EVM) which runs on the P2P network of its nodes. Anyone willing to use the EVM pays the gas fees, which get distributed between the nodes.
Not only does Ethereum have its own VM, it also uses own programming languages. At the moment, there are 2 main languages that can be used for creating smart contracts on the platform. The first one, Solidity, is more widespread; however, the newer Vyper language improves on Solidity in many ways and could eventually replace it.
Ethereum also has a large developer community that constantly grows. What’s more, many large companies are interested in integrating their services and products with Ethereum (Microsoft, for example).
Apart from Ethereum, there are several other platforms worth mentioning, each with its unique advantages.
Steem. It is a blockchain powering one of the largest decentralized social networks, Steemit, which technically was the first Steem dApp. Thanks to the DPoS consensus algorithm, Steem is fast, which allows it to process more transactions per second than Bitcoin, for example. What’s more, because Steemit social network had almost no competitors at the time of its launch in 2016, Steem now has a massive user base.
EOS. Another brainchild of Steem’s creator, Dan Larimer, is EOS. The platform managed to generate massive amounts of hype back in 2017, due to its promises of fastest transaction times in the crypto field. Its parent company, block.one, raised over 4 billion USD in ICO, making the ICO the biggest ever.
EOS delivered on its promise of fast transaction times, processing over 3000 transactions per second. However, as it turned out, it was achieved mostly at the expense of decentralization. EOS has just 21 block producers compared to thousands of Bitcoin nodes, for example, making it fairly centralized. What’s more, in the end of 2018 EOS has reversed several transactions – something that should not be possible in a truly decentralized platform.
Klaytn. Despite being a newcomer, Klaytn is a strong candidate for the most used dApp platform crown. Created by South Korean messaging giant Kakao, the platform was launched in 2019, but already has the most daily active users of all similar platforms, Ethereum included.
However, there’s a catch: Klaytn does not have decentralized apps, even though the platform is blockchain-based. The platform calls its application “BApps” and prioritizes speed and security over decentralization – much like EOS, but in a far more open way.
NEO. Formerly known as Antshares, this Chinese Ethereum competitor has a number of tricks up its sleeve. First of all, it tries to be fully regulatory compliant. The platform achieves that by assigning every individual or business using it a unique ID. Only those having this unique ID can use NEO.
Second, it supports a variety of programming languages, C#, Java and Python included. This makes it easy for developers to start creating smart contracts on the platform.
Lastly, being a Chinese product, NEO has a bigger chance to avoid future blockchain project regulations China might implement.
TRON. The main goal of the TRON network is to remove the middleman that is present in content distribution process. If a creator wants to deliver the audience a video, he/she will upload it to YouTube – a centralized platform. If an artist creates a piece of music, he has to distribute it through SoundCloud, Google Music or a similar alternative – all of which are centralized.
TRON wants to remove this “centralization” part. It would make content distribution more profitable both for creators and consumers, as well as make it harder to censor the content.
Although more than 4 years passed since Ethereum’s release, dApps are still in their infancy. Many projects get abandoned, some even without ever leaving beta. The daily user count of dApps still remains pretty low despite all the advantages.
However, there is another side as well. The fact that global scale companies, like Kakao, launch their own dApp platforms is a powerful sign that the technology has great potential. What’s more, the blockchains themselves improve, getting faster, safer, more efficient and scalable.
dApps is a technology for tomorrow that can already be used today. Right now, the technology is mostly used by cryptocurrency enthusiasts. However, it might not take much to take decentralized apps mainstream. Another bull run, perhaps?
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