News | April 06, 2022, 10:01 AM | The content is supplied by a Guest author
All the emerging technologies in the past few years, including blockchain, artificial intelligence, and machine learning, have been preparing us for a new era of users getting direct services, completely cutting out the middleman. In 2022, we can order food delivery through apps without contacting the restaurants or order a car to pick us up without going out and hailing a cab. As customers are seeking more enablement and direct engagement with the businesses they prefer, companies have no other choice but to adapt.
This is why decentralization is becoming a growing priority these days with companies spending more than $6 billion in the past year on it. New decentralized applications provide an innovative way to build applications and create incredible user experiences. Are decentralized applications one of the enterprise blockchain solutions larger companies should keep on their radar in 2022? If so, what benefits can they expect from this new technology? In this article, we bring you all you need to know about DApps.
What is a DApp?
DApps became popular in 2021 although they were active back in 2019, the number of unique active wallets hasn’t surpassed more than 20,000. Only two years later, this number skyrocketed to 27 million unique active wallets (UAWs), setting a new trend for everyone interested in this type of technology. DApp stands for a decentralized application which is basically software running on a blockchain network. DApps don’t depend on a single third party to function but are rather using smart contracts and the blockchain consensus to make sure all parties involved benefit in a certain way. Oftentimes, DApps are associated with Ethereum, but they can also be found on other blockchains like EOS and NEO.
As a user, you will probably not see much difference between decentralized and standard applications, but the decentralized architecture supported by the smart contracts is what attracts many enterprises toward DApps. Regarding smart contract, it’s simplest to describe it as a computer protocol that aims to digitally facilitate, verify, or strengthen the negotiation or performance of transactions without involving third parties. This makes the process much faster, cheaper, and more efficient.
Developers, users, and other tech enthusiasts have been impatiently waiting for decentralized applications to become widely used and discussed. As they promote an innovative way to build solutions with numerous benefits, many enterprises are already preferring them over their centralized counterparts. Improved security is one of these benefits. As DApps are being developed with blockchain technology, it provides the type of security you would expect from the blockchain. All DApps are located on a shared database, which copies stored data in all other nodes of the blockchain. If a data breach occurs, one corrupted node will not take down the entire system, meaning that enterprises can still access their vital data.
Another important benefit is zero downtime. When a developer deploys these smart contracts on the blockchain, the network itself enables companies to serve their clients with almost no interruptions and downtime. It also implies that denial-of-service attacks will not be efficient against decentralized applications.
Also, each DApp is protected with cryptographic keys, which minimizes the chances of personal data and user payment information theft. Users are not able to deny access to the DApps, regardless of being one user or more of them living in a particular country. Because they sit on the Ethereum main net, DApps inherit immutability and transparency that make them the perfect option for those applications requiring an open network. Even if DApps supported on Ethereum are not infinitely scalable, they still hold the largest share of apps currently.
Decentralized Finance & NFT
Of course, we cannot talk about any DApp platform without mentioning decentralized finance or DeFi. This is one of the most recent developments in financial technology referring to a range of services on blockchain technology and smart contracts. These decentralized finance services seek to streamline numerous aspects of developing a business and daily management for individuals. Simply put, decentralized finance can also serve in peer-to-peer financial services also stored on the blockchain and don’t require the involvement of a third party for verifying or monitoring transactions. DeFi examples will range from contrast-powered loans and stable coins minting to decentralized exchanges.
Non-fungible tokens or NFTs are one of the most popular trends among emerging technologies. So, there is almost no surprise that NFT marketplaces are becoming a lucrative idea supported by blockchain and DApps. NFTs owe a part of their popularity to the fact they are decentralized, allowing users to create, trade, or sell any of their NFTs on the blockchain.
In Final Words
There is enormous potential in decentralized apps. Also, they are currently uniquely positioned to completely change how we think about digital applications. Because DApps are based on blockchain, they provide an unmatched set of benefits for organizations and individuals while also eliminating the disadvantages of centralized solutions. This dynamic on the market also serves as proof of the feasibility and profitability of decentralized applications, ensuring them a spot in future projects.
Regarding their performance on the market, decentralized apps will probably not replace traditional ones in the next few years. Instead, DApps will successfully coexists with centralized apps in the business world, by gaining a certain amount of traction and growing their user base.
To make the most of DApps, many enterprises will reach out to a smart contract audit company, which will ensure they maximize all the benefits of this and related emerging technologies and take their business to another level.
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