What are Decentralized Applications (DApps)?

A decentralized application or “DApp” is a program that runs on a blockchain or peer-to-peer computer network, instead of a single computer. 

DApps are built to run autonomously, typically through the use of smart contracts that run on a decentralized network. For these applications, this smart contract functions perfectly by a set of rules that are stored on the blockchain and are accessible to all parties to view transactions. 

While centralized applications subject you to centralized control, middlemen, and authority, decentralized applications operate by the community's consensus. 

How does a DApp work?

DApps are built to prevent any single point of failure. They enable users to can conduct transactions or other actions on a decentralized network using trustless protocols. Most importantly, they’re able to carry out operations with excellent security through openness without outside interference. 

In order to achieve a trustless agreement or consensus across the various nodes (computers), dApps are built on strong rules which are enforced via smart contracts. Consequently, it becomes more resilient and resistant to dangerous threats like significant hacks and outages. 

Here are the three main characteristics of decentralized applications:

  • Decentralized: As the name implies, they are not controlled by a single entity or authority. Instead, they are maintained by multiple users (or nodes).
  • Open Source: The source code is readily available to the public. This means that anyone can use, copy, verify, and modify the code.
  • Cryptographically secure: Strong cryptography ensures that all data is stored in a distributed public ledger or blockchain which has no single point of failure.

Pros & Cons of Decentralized Applications 

Decentralized apps demonstrate some key perks over centralized ones, such as:

  • Network breaches are virtually unheard of with highly robust security since there is no room for a single point of attack. 
  • Peer-to-peer transactions are made possible by network transparency, which gives users ownership over their data. 
  • The blockchain infrastructure's immutability renders it hard for other parties to alter user data. Users have complete control over their data and are free to use it as they like. 

While these are great, some drawbacks of dApps include:

  • The technology is mostly in its experimental stage, which makes it prone to numerous unknown issues.
  • There are doubts about their ability to scale, especially in the event that an app requires significant computations and overloads a blockchain network.
  • Challenges in developing a user-friendly interface for them.
  • Difficulty in making needed code modifications.

Examples of DApps

BitTorrent and Tor are some of the most successful dApps ever - even though they’re usually not thought of as traditional DApps. Instead of a blockchain, they both run on computers that are part of a P2P network, whereby multiple participants are consuming content, feeding or seeding content, or simultaneously performing both functions.

In the context of Web3, dApps usually run on a public blockchain network. One of the success stories in the space is Uniswap, a decentralized cryptocurrency exchange (DEX) built on Ethereum. Other popular dApps include MakerDAO, PancakeSwap and many more!


Decentralized Applications appear to be the next paradigm shift in the blockchain scene as most projects are incorporating decentralization into existing industries, such as social media, finance, gaming, etc.DApps will play a crucial role in bringing in new industry players and their innovative business models to the ecosystem to benefit from and implement some good witty ideas on the blockchain. 

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