As blockchain services and platforms gain momentum, decentralized applications (dApps) will grow in popularity over the coming years. More and more companies and developers will look to use them to interact with customers through a decentralized network.
Decentralized applications are quickly becoming the go-to component for implementation in various areas, from gaming and gambling to finance and prediction markets.
The industry has yet to create an application that has achieved mass adoption, but this is probably only a matter of time. Therefore, in the early stages of the development of the industry, it is more important than ever for a business to start thinking about the development and implementation of dApps, as these technologies diversify the competition.
What are dApps?
Decentralized applications (also known as “dApps”) provide services similar to regular consumer applications. Still, they use blockchain technology to give users more control over their data. This eliminates the need for centralized intermediaries to manage data, making the service “decentralized”.
Digital applications are ubiquitous in today’s world. Consumers use apps to send an email, pay for parking, find dates, and so much more. Under traditional models of control and ownership, consumers typically hand over personal data to the company providing the service. When using decentralized applications, users theoretically gain more control over their finances and personal data since they do not need to trust someone else to store and protect their information. However, some experts are skeptical that this will actually work in practice.
The difference between a dApp and traditional web applications
Usually, web applications possess an external and internal side. The interface, also known as the client-side, is what users see when interacting with a website.
The back-end is the data access layer of the application. It represents the unseen mechanism that powers the website’s functionality.
Server-side
Web applications can be thought of similarly to cars. If the car were a web app, the front end would include what the driver sees while inside the car. Meanwhile, the back of the car would be the engine that propels it forward.
Client-side
From the client’s point of view, regular and decentralized applications look the same. Like you can drive a car without understanding the intricacies of internal combustion engines. You can also navigate websites like Netflix or Amazon without understanding how they work in the background, i.e., what is happening on the server.
The main difference between decentralized and ordinary web applications is that the back-end and the front-end of standard applications are hosted on the same server. On the contrary, the back-end of decentralized applications is hosted in a distributed network of synchronized servers (computer nodes) scattered around the world.
While decentralized applications only skyrocketed in popularity after the Ethereum network went live, it’s essential to understand that decentralized applications don’t have to run on top of the blockchain.
The first decentralized application for peer-to-peer file sharing on the internet was called Napster. The breakout software was founded in 1999, ten years before the first blockchain was invented. Other examples of decentralized applications run on peer-to-peer networks (Peer-to-Peer networks, P2P), but not on the blockchain. These include the popular file-sharing service BitTorrent and the privacy-focused, open-source browser Tor.
Advantages and disadvantages of decentralized applications
Benefits of dApps
Zero downtime
When one node (node) leaves the network or a component fails, all remaining blocks are still working and can take on the additional workload. Once the smart contract underlying the application is deployed on the blockchain, the application will continue to run without interruption as long as the network is up and running. In addition, due to their decentralized nature, dApps are resistant to a wide variety of security threats, including:
- DDoS attacks
- SQL injections
- XML bombs
- Cross-site leaks (XSS)
Censorship resistance
Again, since dApps run on top of permissionless open networks, no entity has the power or authority to block users from accessing or deploying them.
Confidentiality
Generally, users are free to interact with decentralized applications using only their cryptocurrency wallet without providing or disclosing any personally identifiable information.
Transparency
Since decentralized applications run on public and transparent blockchains, all data, including the dApp source code and all incoming and outgoing transactions, is also transparent and public. This adds an extra layer of security because all behavior on the chain is perfectly verifiable, and the dApp code can be viewed and verified by anyone at any point in time.
Disadvantages of DApps
Complexity of creation
The immutability of smart contracts makes it particularly difficult to create and design decentralized applications. Developers must carefully plan and ensure that future applications are aligned with decentralized applications from the beginning. This is necessary because once the underlying smart contracts have been deployed, it is impossible to make changes to them.
Expensive to use
To make a transaction in a decentralized application, you need to pay a network transaction fee. This transaction fee, calculated in gas (Ethereum’s pricing unit) and paid in ETH, goes directly to the miners who maintain the blockchain network that runs the dApp. During busy times, simple peer-to-peer transactions can cost anywhere from $2 to $5, while peer-to-peer transactions like swapping tokens on decentralized exchanges can cost upwards of $20.
Slow speed
In addition to being expensive, decentralized applications are incomparably slower than typical applications. This is because blockchains using the Proof-of-work consensus algorithm take time to calculate transactions and mine new blocks. The average block time on the Ethereum blockchain is 13.3 seconds. The network throughput is approximately 15 transactions per second, much lower than centralized applications.
Key Features of a Decentralized Application
Crypto wallet
Customers have to create a crypto wallet to receive bonuses and awards in virtual money, currency, or non-fungible tokens.
Token
There must be a primary token for users to access different software options. The token fuels any transactions that occur in the background of the app.
Transaction-based actions
Like any regular application, users expect a dApp to perform specific actions. The difference with basic applications is that decentralized apps require transactions to function.
10 Most Popular dApp Platforms in 2022
Creating a Decentralized Application in 6 Steps
1. Building a smart contract
Smart contracts function on a blockchain. Thus, you’ll need to pick one or a few blockchains if you want to create a cross-chain dApp. Founders often choose to make their dApp on Ethereum since it has many users who already have crypto wallets and allows for faster onboarding.
2. Building the front-end
Making a dApp without developing user-facing mobile and/or web apps is impossible.
To create a captivating user experience, plan on starting with a prototype:
- low-fidelity UI
- high-fidelity UI
- user testing
- reinforce the UI/UX based on the feedback
3. Creating a centralized back-end
If you’re building a dApp that requires massive data storage, then you will need a web solution on a private server.
The admin portal will connect to smart contracts and front-end applications for customers to offer additional features to you as a business owner (to control your dApp) and users.
4. Testing
Start testing your app as early as possible during the development phase. Remember that each new build has to go through the QA process.
5. Deploying
This step includes:
- uploading mobile apps to the App Store and Google Play
- switching your back-end portal to a live production environment
- adding a smart contract to the blockchain.
6. Maintaining
This is an ongoing process. The smart contract will remain the same as a blockchain app, immune to changes, but you’ll still need to update crucial points on the front end.
The Future of the dApp World
As time passes, decentralized applications will slowly change the way users think about the decentralized web. And although this is just the beginning of their journey, developers have tremendous opportunities. The main thing that is required of them now is to continue refining the UI/UX of new dApps and demonstrate the value of using these applications.
Unicsoft helps clients become innovators in blockchain technology by creating modern dApps on different blockchain platforms that disrupt finance, healthcare, insurance, e-commerce, logistics, utility, and other sectors.
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