With the rise of blockchain and smart contracts, decentralized apps (also known as dapps) are poised to mature, potentially becoming the backbone of the Internet’s evolution for the better.
Currently, dapps look identical to traditional web applications because they use the same front-end language. However, instead of using an API to connect to a central database, a dapp’s backend uses web3 (for Ethereum) to connect to smart contracts on the blockchain. Ethereum is currently the most widely used blockchain for dapp development – over 1000 decentralized applications were launched based on the Ethereum blockchain.
Dapps share some commonalities with the P2P applications, like BitTorrent, such as allowing information to be exchanged among a vast network of users. The nodes in P2P applications only store fragment data, which is more likely to be hacked and cause security problems, unlike dapps, which are powered by the blockchain, and feature the same cryptographic advantages as the distributed ledger.
To put it bluntly, dapps are the future. We can’t predict whether they’ll fully solve present-day challenges facing the Internet, but the qualities of the technology — open-source, incentivized, distributed — bring us far closer than the centralized frameworks in use today.
How often has the headline “Company XYZ Hacked, Personal Information of Millions of Users Stolen” appeared in the news?
Centralized databases are attractive targets for cyber-criminals, who assume the risk is worthwhile for the massive rewards — credit card information, Social Security numbers, and passwords. Individuals deal with the fallout, from fraud to identity theft, while companies foot high cybersecurity bills and cope with their damaged public reputations.
With dapps, data is distributed throughout multiple blocks on the blockchain. There is no longer a central point of failure to exploit, which decreases the system’s vulnerability and makes it impractical to hack.
Accountability and permanence
Granting information access to an app is like throwing it into an abyss — we have no idea what becomes of it afterwards. Centralized companies can sell, alter, or otherwise mishandle data as they see fit. With a dapp, all data-related transactions are stored on the blockchain ledger and remain immutable; the data can only be changed by appending a new block. A record of previous transactions remains, providing accountability and transparency.
It’s not just about checking data abuse. Having data stored in a permanent, unalterable state has huge positive implications. For example, imagine having your entire medical record stored on the blockchain, which a doctor could access via a dapp. Not only would this eliminate wasteful administration, it would ultimately help providers give you more contextualized, specific care.
Democratization and rewards
Twitter, Facebook, Instagram, Reddit — except for advertising, nearly all of the content on these platforms is user-generated, yet users rarely see any benefit from the work they put in.
Compare that to Steemit, a blockchain-based social blogging platform, which uses its platform token to reward content creators and curators. Because Steemit is decentralized, content is entirely self-regulated via a system of upvotes, rather than algorithms; good content gets paid out in accordance with its reputation among users.
Essentially, dapps enable a model that is more authentic, productive, and fair, giving users a mechanism to receive tangible rewards for their role in building community. These principles can be applied to our broader Internet usage and redistribute the benefits currently being funneled to big tech giants.
Currently, the purest form of decentralization means incentives must be built into the system to align interests for all parties involved. Many dapps built today are connected to a token, which can serve a variety of uses, whether it’s driving the dapp’s functionality, providing a sense of ownership, or propelling product development.
With such a volatile market, purchasing tokens should be done with due diligence. However, as dapps gain widespread adoption, tokens will represent a wider variety of commodities and increase in real-world value. Just like all aspects of decentralization, tokenization spreads out benefits among the many: it gives the team resources to build, incentivizes users to participate in the dapp’s growth, and provides fuel for the overall dapp ecosystem.
The blockchain buzz has centered around cryptocurrency, but the possibilities for leveraging decentralization are incredible across every industry. Any web app in existence today can be made into a dapp, and decentralization will impact industries as far-flung as media, ride-sharing, and insurance.
From a user perspective, using a dapp will be virtually identical to using an app, but will contribute to something far greater: a more transparent, secure, equal, and resourceful way to lead our digital lives.