What are DApps, and what are they used for?

Decentralized apps, or DApps, are a new generation of Web-based applications built on decentralized technologies. But before we dive into DApps, it’s important to understand what centralization/decentralization means in the context of apps.

The centralized Internet model of Web 2.0

Most apps today run on centralized networks, operated by a controlling authority.

For example, social media networks, banks, and streaming services hold your data on centralized servers. When you access these apps, a request is sent to their servers, and the result is sent back to you, assuming your credentials (username and password) are valid. While this centralization is efficient, it generates huge amounts of user data. And that means unwanted exposure to hacks, creepy advertising, and Big Tech companies like Google profiting off your data.

This is just how today’s Web 2.0 Internet works. But things are quickly changing as we enter a Web3 world.

A new, decentralized model for building on the Internet

Fortunately, Web 2.0’s shortcomings have raised data security awareness, generating more interest in peer-to-peer, decentralized solutions like blockchain technology. Blockchain networks are decentralized, eliminating the need for Big Tech intermediaries. Both shared consensus and automated smart contracts make this functionality possible.

We can contrast these two different systems with an example. For example, let’s say you want to send money to a friend:

  • With a DApp, you simply log in into your crypto wallet, select the amount you want to send and confirm the transaction; a smart contract takes over to complete the exchange. At the same time, blockchain validators work together to verify your transaction, generating a permanent record on a blockchain.
  • With Web 2.0, by contrast, the process of sending US dollars to your friend occurs on a centralized network. This means a bank handles every component of your transaction. They own the data, and they decide if the transaction is valid or not.

Note: To use a traditional app, you’ll typically sign in using a username / password combo. To use a DApp, you’ll need a crypto wallet which enables you to provide a unique cryptographic signature that proves your identity. Without a crypto wallet, you won’t be able to access DApps.

Smart contracts: what DApps are made of

DApps are a collection of interconnected smart contracts—which are automatically executable bits of code on a blockchain network. Behind the scenes, each smart contract performs a specific function within the application. Think of smart contracts as programmable Lego blocks: By stacking and compiling smart contracts, developers can create entire decentralized apps.

The advantages of DApps

While the front-end of a DApp may be indistinguishable from a traditional app, it’s the decentralized back-end that distinguishes DApps from their Web 2.0 counterparts. Instead of storing an app on centralized servers, DApps are stored across the many distributed computers—or “nodes”—that make up a blockchain network.

As a result, DApps share common attributes not found across centralized platforms:

  • No single point of failure: Unlike traditional apps, DApps are more reliable because blockchain networks span multiple nodes. If Instagram crashes, all users can lose access to the app because Instagram’s servers are centralized. It’s much less likely a DApp will go offline because each node would need to fail simultaneously to produce an outage.
  • Open source transparency: The decentralized nature of blockchain technology relies on open-source code that’s accessible to all network members. In an ecosystem without intermediaries, users must identify and verify each app to avoid scams and exploitative malware.
  • No central authority: Without a central authority, blockchains must utilize “consensus mechanisms”—complex systems for thousands of independent nodes to come together in agreement—to ensure the validity of all transactions. Whenever a DApp transaction occurs, the entire network is responsible for verification, as opposed to a single authority like a bank.
  • Utility tokens: Like how you pay to access traditional apps, many DApps integrate a utility token that guides platform economics. For example, many utility tokens enable decentralized governance, in-app transactions, and reward programs, among other use cases.

Now that we’ve defined what a DApp is and how they work, we can start to explore the different types of DApps and their role in the broader blockchain ecosystem.

The different types of DApps and what they’re used for

DApps are the blockchain-based equivalent of traditional apps. There are social media DApps, financial DApps, gaming DApps, and so much more.

Today’s DApps serve as a bridge between current Web 2.0 systems and Web3. In many cases, this means DApps are accessible through conventional Web browsers such as Google Chrome or Firefox. But to use a DApp and communicate with underlying blockchain networks, you’ll need a crypto wallet—either a built-in crypto wallet or one you’ve installed (i.e. as an extension).

Given the more recent introduction of blockchain technology, there are fewer DApps than traditional applications. However, ongoing innovation has begun to diversify the ecosystem, with many of the most popular DApps representing crypto exchanges, NFT marketplaces, blockchain-based games, social media, and more.

Learn more about the different kinds of DApps being built on Web3.

Using Brave for secure, browser-native access to DApps

To sum up, DApps are built on decentralized networks, while traditional apps live on centralized networks. These DApps play a crucial role in bridging the current Web 2.0 experience and Web3 functionality. For example, the Brave browser offers an experience similar to Google Chrome and Firefox while supporting a built-in crypto wallet that can interact with DApps. Unlike crypto wallet plugins, the Brave wallet is browser-native, adding another layer of security.

In addition, the Brave browser supports privacy features that align with the ethos of decentralization. For example, it prevents data collection by blocking ads and trackers. This feature lets you control your data and how it’s used, rather than Big Tech intermediaries that aim to monetize it. Together, Brave’s built-in crypto wallet and privacy-preserving functions provide a secure, convenient way to navigate the Web, whether centralized or decentralized. Download Brave and discover a better way to browse.

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