Decentralized Applications are getting more and more popular due to the benefits they provide to the end user or business – transparency, security and reliability just to mention a few.
A Decentralized Application is a program that is run by many users on a decentralized network with trust-less protocol.Wikipedia
In order for us to understand decentralized applications better, we need to know how traditional web applications work.
Before Bitcoin and BitTorrent, the usual approach of developing web software, applications and platforms was using a central database storage in a server which hosts the whole application’s data.
This architecture as you already thought is exposing quite some security and trust issues, concerns, and vulnerabilities. One of them being the introduction of central point of failure – if the server hosting the database is inaccessible for some reason (power outage or network issues) our application won’t be accessible at least for the time-frame being offline. There are lots of infrastructure architectures of course that can solve this issue as introducing load balancing and distributed database systems but these approaches also come at a price (consuming too much time, effort and money).
Another problem of the centralized systems is trust – do we trust the operator/third-party-service-provider for the correctness of the information stored and provided back. Given the fact that we don’t have access to the database there is no way we can be certain how trustworthy is the provided information.
We need to add here that the traditional approach of building applications is probably the better one for some systems and certain business use-cases. But when we are developing systems that are dealing with value transfers or there is lack of trust between the parties – decentralized applications comes to be the better choice.
Decentralized applications are aiming to address all of the issues outlined above.
Decentralized Applications (dApps) are built on top of blockchain networks using smart contracts and are solving problems present in traditional web applications.
Often called application layer solutions – the decentralized applications are leveraging the features of blockchain technology for providing trust, transparency, immutability and uptime.
Currently there are few types of decentralized applications:
- decentralized applications that manage money – this is the category for financial applications, providing users with more powerful ways of managing their money
- semi-financial decentralized applications, where money is involved but there is also a heavy non-monetary side to what is being done
- “other” decentralized applications – which include governance, voting and apps that are not financial at all.
Our expertise with Decentralized Applications Development
Our team has a broad technical know-how and extensive experience building and designing decentralized applications, components, smart contracts and protocols.
We consult and help enterprises and startups implement blockchain technology, making sure that your decentralized application is running smoothly while you are taking care of your business and customers.
We can help with consulting, blockchain architecture design, smart contracts development, and security auditing when you need help implementing your business logic in a decentralized application, and storage in a decentralized way.
We offer comprehensive combination of our know-how, expert interaction and support, to help you with the fulfilment of your business goals.
Questions & Answers?
What are decentralized applications?
DApps or decentralized applications, are digital applications or programs that exist and run on a blockchain or P2P network of computers instead of a single computer, outside the control of a single authority and are designed to avoid any single point of failure.
Key features of a decentralized application:
1. Decentralized – No single controlling entity;
2. Open Source – Code is available for everyone to read and verify;
3. Incentive – Crypto tokens are usually used to reward network users/miners etc.;
4. Protocol / Algorithm – To generate tokens that reward network participants;
5. Blockchain – Data stored cryptographically in a blockchain
Decentralized applications – how do they work?
Decentralized applications (dApp) work on a peer to peer (P2P) model, meaning that the nodes are able to connect with each other directly.
In principle, dApps operate similarly to a Blockchain network and often operate on different blockchains like Ethereum. Thanks to its characteristics, like its protection against data being altered, Blockchain has become the standard technology used by many decentralized apps.
This means that a decentralized app is not owned by a single company or authority. Instead, its program runs on a distributed ledger of numerous users. Because of this, they are usually considered to be open-source.