Blockchain101: Introduction to DApps

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Ethereum was introduced in 2015. And only a few years later, the all-time high of Ethereum’s crypto, Ether(ETH), reached around $4800 USD.

Unlike the Bitcoin network, Ethereum is not only a cash transfer system without intermediates.

With an advanced function smart contract, it allows users to build decentralized applications (DApps) on the Ethereum Blockchain, an open public decentralized platform that no one person or group can control.

In the following article, we will introduce what exactly DApp is and the future of it.

Definition of a DApp

DApps (Decentralized applications) are applications built on a decentralized Blockchain network that combine smart contracts and a front-end user interface.

A smart contract is actually a computer program that can be executed automatically when the pre-set criteria is fulfilled, which is accessible and transparent.

According to ethereum.org, a DApp has to fulfill the following requirements:

• Decentralized: DApps are run by thousands of nodes around the globe. No party can take control of it, including governments and the developers.

• Deterministic: The execution of DApps is not affected by any changes in the environment.

• Turing complete: DApps can perform any action given the required resources.

• Isolated: DApps are executed in an isolated situation. If a DApp has a bug, it won't affect the normal functioning of the Blockchain network.

  

  Sources:002 | DApps, do we really need it? | Programmer explain

Benefits and Risks of DApps

Why do we need a DApp? Imagine you were a gamer of an online game. If your account is hacked or banned by the game’s admins, you will lose all your hard-earned game assets.

That’s the real experience of the founder of Ethereum, Vitalik Buterin. But DApps have no such worries, as DApps are run by distributed nodes around the globe which can not be changed or hacked easily.

Here are the benefits and risks of running a DApp compared to a traditional application:

BENEFITS

Run 24/7 with zero downtime: Once the smart contract of a DApp is stored on the Blockchain, it will always be able to serve clients 24/7 automatically. An individual DApp can not be attacked by denial-of-service attacks, which is the most common risk faced by a traditional application.

Unless someone raised the 51% attack towards the whole Blockchain, which is difficult to do so.

Secure your privacy: If you open a Facebook account, you have to provide your personal information. You don’t need to provide a real-world identity to deploy or interact with a Dapp.

Resistance to censorship: No single entity including the government and DApp developers can block users from submitting transactions, deploying and interacting with DApps, or reading data from the blockchain.

But traditional applications like social media platforms, Twitter or Facebook have the right of permission to ban their users’ accounts, like Donald Trump. They may also access your personal information stored in the smartphone without your permission.

Immutable and indisputable: The data stored on the blockchain is immutable and indisputable, rather than relying on a centralized authority. Users may not change the transaction record or other data that has already been launched to the public.

Unlike traditional financial applications like PayPal, if the server is hacked, the transaction record may be changed or lost, which may not happen in DApps.

RISKS

Difficult to maintain: Compared to traditional applications, once a DApp is published, it is more difficult to maintain as the data is stored on the Blockchain which is immutable. Even if bugs or security risks are found, developers can’t fix it easily.

Low efficient network: Currently, the Ethereum network can only process about 10-15 transactions per second. If too many DApps are run on the network, it will result in low efficiency of all DApps built on the Blockchain.

High running cost: In order to ensure the security, integrity, transparency, and reliability of the Blockchain, it requires a time-consuming verification process called the proof of work. The expansion cost of DApps has become so huge.

Difficult to create a user-friendly experience: It is difficult to set up a tool stack necessary to interact with the blockchain in a truly secure fashion.

4 most common use cases of DApps today

DApps have become more popular in different industries, including Finance, Gaming and Digital Assets, Social and Entertainment, Businesses…more and more.

De-Fi (Decentralized Finance)

De-Fi (Decentralized Finance) refers to a financial system without centralized authorities, like banks or governments, to manage accounts and verify transactions on them, which act as an intermediate.

De-Fi challenges traditional finance systems. With the De-Fi applications, the privacy and security of users are protected by the Blockchain technology. It allows users to carry out trustless transfers without worrying about the risk of violation.

Examples of De-Fi Applications: Avalanche, Wrapped Bitcoin, DAI are available in Bitget Spot Trading.

Game-Fi and NFTs

Game-Fi is a new gaming model based on the Blockchain technology. The greatest feature of it is allowing users to earn crypto and non-fungible tokens (NFTs) that can be transacted on the market, so that they can make money while playing games.

The games’ rules are completely transparent, the mechanism, trading system and reward system are clearly stated in the smart contract stored on the Blockchain, which is executed automatically and immutable.

So that the property rights of gamers are completely protected, rather than controlled by gaming companies.

Examples of Game-Fi DApps: Axis-Infinity, Sandbox, Decentraland are available in Bitget Spot Trading.

Social and Entertainment

Are you sick of advertisements on social media platforms? Are you worried that your data is being monitored and disclosed by tech giants like Meta?

You have no such worries when you are using social and entertainment DApps. You don’t need to provide any personal information when you interact with them. You can completely do it anonymously. Your data is stored on the Blockchain safely.

Not only that, you can earn crypto and non-fungible tokens (NFTs) that can be transacted on the market like game-fi through creating engaging content on the platform.

Examples of Social and Entertainment DApps: Basic Attention Token (BAT) and Green Satoshi Token are available in Bitget Spot Trading.

Business

DApps increase the efficiency of businesses by creating a transparent and open environment. We have already seen DApps in the supply chain management, healthcare and pharmacy industries.

Examples of Business DApps: Chainlink, EOS Dynasty are available in Bitget Spot Trading.

3 most popular Blockchain platforms for DApps

Ethereum: Ethereum’s crypto ETH is now the second-biggest cryptocurrency by market cap after Bitcoin. The innovation of Ethereum is the smart contract function, which is the basic technology of DApps.

Solana: Solana aims to provide users with a distributed ledger having higher scalability. The team also pays attention to the matter of security and decentralization.

EOS: EOS is an efficient Blockchain platform for DApps with simple solutions for application hosting, executing smart contracts, and other operating systems.

Now are you ready to invest in cryptocurrencies?

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