A decentralized application (DApp) offers many of the benefits of cloud-based applications without the need for centralized datacenters. This offers additional security and privacy that comes with decentralization.
DApps are an opportunity to restructure how the Internet operates. The traditional model is utilized by Facebook, Amazon, and Twitter.
Centralized Applications
The Internet is based upon the client-server model.
Applications run on a device (or a web app in a bowser) and are tied to servers.
Processing can take place locally as well as remotely depending upon the job. The data is also stored at the centralized datacenters. These are typically owned or controlled by the corporations.
Major players are:
- Amazon Web Services (AWS)
- Microsoft
We also see social media companies generating enormous amounts of data through their front ends.
This system is taking on new meaning with the rise of artificial intelligence with these databases being used for training.
The key is the infrastructure is centralized as are the applications running on top.
Decentralized Applications (DApps)
DApps do similar job as centralized applications. The main difference is the applications run on decentralized infrastructure.
Workloads are spread across computers that do not belong to the same company or person.
DApps run on peer-to-peer networks. In some instances, as with BitTorrent, the users are also the infrastructure providers. File sharing services are examples of DApps.
Blockchain has taken the use of DApps to another level. Nodes run by different entities (or individuals) provide the computational power (along with storage). DApps rely upon the centralized processing of the blockchain, which is actually decentralized. Each computer runs the base layer code providing the instructions for the network.
DApps And Cryptocurrency
There are certain requirements to be considered a true DApp.
They are:
- DApp must be secured with a cryptographic token
- The data and records must be public
- It must be open source and not be under the control of any single person or group
Bitcoin was the first blockchain network. It is to the point where the security is unrivaled since it is likely unable to suffer a 51% attack.
This brought forth the idea of distributed ledger technology (DLT). The decentralized nature of the node system meant the financial ledger, similar to that of a bank and other financial institutions, was housed on unrelated computers. Anything tied to this network would be considered a DApp although the utility is rather limited.
The term "DApp" really came to prominence with the introduction of Ethereum and its smart contract technology. This provides [developers with a great deal more flexibility and ability to innovate.
Benefits Of DApps
DApps biggest benefit is that it gets online activity out of the hands of the major technology companies. The Internet ended up with a siloed system with major corporations all running closed systems. There is no interoperability between the different databases since there is no incentive for anyone to create it.
We also see the danger of hacks or data leaks. This led to the creation of end-to-end encryption. In spite of this, there were some well known hacks such as the Cambridge Analytica which exposed the data of Facebook users.
The back end is the blockchain which brings distributed computing to another level. This not only shifts processing but also storage.
Drawback To DApps
One of the major flaws with blockchain is speed. The number of transactions per second that Bitcoin, as an example, is insignificant compared to a network like Visa. The leading credit card company does roughly 11K tps.
DApps tend to be community developed. They have not reached mass adoption since they tend to lack usability of their corporate counterparts. This has made the advancement slow as it is still seeking the "Killer DApp".