What is a decentralized application?
Decentralized applications (DApps) are another logical stage in the technological evolution. The decentralized application is similar to the so-called “smart contract” implemented by the Ethereum network. However, there are fundamental differences. Unlike “smart contracts”, DApps are not directly related to finances. Nevertheless, blockchain technology, using DApps, provides unlimited areas of application pursuing any possible purpose.
Most people who are familiar with the blockchain concept know that a smart contract is a decentralized thread among two or more parties in a blockchain. Smart contracts (in their present form) require financial support and possess some limitations like the number of participants per unit of time. Decentralized applications (DApps) represent blockchain technology in a much more advanced form.
DApp and Smart Contracts
There are no restrictions on the number of participants, regardless of the market area, and that is one of the most attractive features of DApp technology. Furthermore, using DApp, it is possible to exploit blockchain technology for various purposes which are not necessarily related to gaining financial profit. You can find some information on smart contracts and decentralized applications here.
It is much easier to master the technology of creating DApp than a smart contract. However, it does not mean that anyone can now easily create their decentralized application. Though, the way to mastering the technology is not so challenging. Any user, resorting to Google search services, is able to find their way of creating their own decentralized application and implement it quickly.
Groups of Decentralized Applications
We can divide decentralized applications into two main groups. Completely anonymous software supports any level of confidentiality, ensuring very quick and automatic actions at the same time. One of the most famous examples of this technology is the BitTorrent network being one of the most popular peer-to-peer communication protocols.
Another group of applications represents software operating on a reputational basis. This is an ecosystem of a sort in which nodes are monitored by users, and their statuses are displayed in applications. Trust is an essential condition for decentralized applications operation based on reputation. However, the application does not allow assigning a certain monetary value depending on the reputation level; it cannot be transferred to another user either.
Bitcoin and Decentralized Application Concept
At this point, such question may arise: how does the Bitcoin concept fit into the decentralized application concept? Bitcoin cannot be regarded as a traditional application since its virtual property possesses value exceptionally within its ecosystem. It is quite obvious that decentralized applications offer groundbreaking opportunities, and it is expected that the DApps’s ecosystem will rapidly develop in the coming years.
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