What is a dApp?

Developers have had more and more options since the advent of blockchain technology. Normally, they would have to place an application on a server, after which users could access the application through a web address. The developer then had complete control over the users' data.

More and more often it emerged that developers of such applications were actually not very good at handling this data. Despite strict laws and regulations, they sold on user data or did not provide adequate security.

Users no longer have to worry about this when they use a dApp. Below we explain what a dApp is, how it works and what kind of dApps there are.

What can you do with a dApp?

A dApp is an application that is stored on the blockchain and also runs from here. The data generated by users is then also stored on the blockchain. This makes the application decentralized, and hence the name dApp (decentralized application).

Developers can in fact develop a code and store it on the blockchain. Users can request this code in order to make use of the application. There are many possibilities with dApps, which we will discuss further in this article.

When using an application, a lot of data is naturally produced. This data is stored directly on the blockchain. Only the owner of the data can access this data. This has the advantage that others cannot abuse this data. Think for example of large Big Tech companies that could resell the data. The past has shown on several occasions that companies do not always handle their users' data with the same care.

Developers have many options when developing dApps. Therefore, there are many different types of dApps, each with their own function. The popularity of these dApps has increased significantly in recent years, because more and more people see the benefits of dApps. Some well-known dApps are Uniswap (UNI), Aave (AAVE), Decentraland (MANA) and Maker (MKR).

dApps are running on the blockchain

The blockchain consists of a network of computers. Anyone can add their own computer to the blockchain network, provided it is a public blockchain. These computers hold data from the blockchain users. Normally, an Internet user would store the data on their own computer, or on someone else's computer. For example, think of a web server or the cloud.

The owners of the computers in the network do not have access to other people's data, even if other people's data is kept on their computer. This is because the data is encrypted with cryptography. Each user is in possession of two keys: the public key and the private key. The latter is not known to anyone other than the user. Data that is placed on the blockchain is converted with these two keys into an encryption, which can be compared to a secret language. This encryption can only be restored to the original data by using the two keys.

On which blockchains can dApps run?

It is not possible to run a dApp on every blockchain. This is because the blockchain must support smart contracts. This is a form of digital contracts that allows developers to store advanced features on the blockchain, such as the code of an application.

The most widely used and best known blockchain for dApps is Ethereum (ETH). Because this blockchain has problems with scalability (high transaction costs and slow transaction processing time), more and more alternatives are emerging. For example, the following blockchains are also commonly used for the development of dApps:

• Binance Smart Chain (BNB);
• Cardano (ADA);
• Polkadot (DOT);
• (SOL);
• Avalanche (AVAX);
• Cosmos (ATOM).

The difference between dApps and central applications

The major difference between dApps and normal applications is that dApps run on the blockchain, and thus are supported and managed by a decentralized network of computers. There is no single owner of the application. Instead, the application can be used by anyone.

In this regard, a dApp is open-source. This means that anyone would be allowed to duplicate, modify and release the dApp. With normal applications this is often not possible, although there are some open-source applications that are developed by a central publisher.

Normal applications are more vulnerable to attack than dApps. This is because dApps do not have a single-point-of-failure. It is virtually impossible to attack and stop the blockchain. This is because the blockchain consists of thousands of computers. An attacker would then have to disable all thousands of computers to bring the blockchain to a halt. With a centralized application, attackers often only need to disable one or a few servers.

Payment is also a big difference. With a centralized application, you often pay a monthly or one-time fee. In some cases you do not have to pay and you can use it for free. For dApps, you pay per use. So you pay to the blockchain, which processes the transactions, and in some cases to the creator of the application. These fees are paid with cryptocurrencies, whereas with a centralized application you pay with fiat currency in most cases.

Conclusion

dApps are applications that run on the blockchain, and are thus supported and managed by a large network of computers. These computers store the application, but also ensure that user data is stored in a secure manner. Only the user himself can access his data, provided he does not lose his keys. This form of security and privacy is therefore the main advantage of dApps.

In addition, a major advantage of dApps is that they have no single-point-of-failure and are open-source. Anyone can develop their own application and run it on the blockchain. You will then have to choose a blockchain that supports dApps, of which Ethereum is the best known.