You have probably heard the term ‘dApp’ being thrown around in the crypto space, but what does it mean and how does it work?
The word ‘dApp’ is short for ‘decentralized application’. Decentralized applications or programs exist and run on a blockchain or on a peer-to-peer (P2P) computer network instead of a single computer. This means the application or program is not controlled by a single authority; instead, control is shared by multiple users.
dApps are often built on the Ethereum network, as it was the first blockchain to use smart contracts, which form the backbone of these programs. Just as you have different apps on your phone, there are different dApps with a variety of purposes like gaming, finance and even social media.
An example of a standard app is Facebook, with users on one side of the equation providing information to a centralized computer — in this case, Meta Inc. This means Meta Inc controls the algorithm, as well as who can access the app and its source codes.
In contrast, a dApp is open-source, which means the source code is freely available for other dApp developers to use.
Advantages of dApps
Because of dApps’ decentralized nature, they are not controlled by a single authority. If you sign up for a Facebook account, you will be required to surrender information like your age, gender, location and email address.
However, when using a dApp, all you need is a wallet address to start using the dapp. You need surrender any personal information.
And because dApps run on a network of P2P computers, there is no single point of failure. This ensures that there are no disruptions or downtime when using these applications.
Disadvantages of dApps
However, there are also disadvantages to using dApps. Since the codes are open-source, bad actors can and will scour the codes looking for loopholes to exploit these apps. Hence, it’s always good to keep your crypto safe by ensuring that your wallet is connected only to dApps that you trust.
Since dApps are constantly undergoing development, the user interface might not be as consistent as that of a standard app, where there are many developers working together to ensure there are no errors in the code. dApps being open-source also means that other developers are often create new concepts of current dApps, with the hopes of coming up with newer, better dApps.
Lastly, dApps are still in the experimental phase, which means there are unforeseen problems and issues that may arise down the road. This brings to mind the question of scalability. In the event a dApps receives a surge of users, is the back-end system ready to handle a heavy load of users interacting with the dApp? Or will it cause network congestion that will greatly affect user experience?
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