What are dApps?

If you’re like me, when you hear the word dapp you think of saying hi to someone pounding fist together. But the word has developed a new meaning. Decentralized applications, or dApps, have become increasingly popular in the world of blockchain technology and crypto. They offer a new way to build and interact with applications, differing significantly from traditional apps that most people are familiar with. Let’s see where they got their start, how are they different from conventional apps, and what are their benefits and risks.

What are Decentralized applications?

To understand what makes dApps different from traditional apps, we first need to clarify what they are. Decentralized applications are applications built on top of blockchain platforms such as Ethereum, EOS, or Binance Smart Chain. Unlike traditional apps, dApps are not controlled by a single entity or organization. Instead, they rely on a decentralized network of nodes to manage and maintain the application’s functionality and data storage.

Where’d the Name “dApps” Start?

The term “dApps” is derived from the words “decentralized” and “applications.” In crypto we like to abbreviate everything. It was coined to differentiate these new types of applications from traditional, centralized apps that rely on a single server or a group of servers to function.

How dApps Differ from Traditional Apps

  1. Decentralization

The most significant difference between dApps and traditional apps is their decentralized nature. While traditional apps rely on a central server to manage data and execute functions, dApps run on a decentralized network of computers, known as nodes. This means that no single entity has control over the application, making it more resistant to censorship, manipulation, and downtime.

  1. Open-Source Code

Another key difference between dApps and traditional apps is that dApps are typically open-source, meaning their source code is publicly available for anyone to view, audit, or contribute to. This level of transparency fosters trust in the application, as users can verify its functionality and ensure that it operates as intended.

  1. Tokenization and Incentives

dApps often have native tokens associated with their platforms, which are used to incentivize users and secure the network. Users can earn these tokens by contributing to the network through activities such as validating transactions or providing resources. These tokens can also be used to access certain features or services within the dApp ecosystem.

  1. Immutable and Transparent Data Storage

Data stored on a blockchain is both transparent and immutable, which means that once it is recorded, it cannot be altered or deleted. This feature ensures that dApps provide a secure and tamper-proof environment for storing and managing data, which is particularly beneficial for applications that handle sensitive or valuable information.

Benefits of dApps

  1. Enhanced Security

The decentralized nature of dApps ensures that they are less vulnerable to hacks and cyberattacks compared to traditional apps, which rely on a central point of control. Additionally, the use of cryptographic techniques and consensus algorithms provides an additional layer of security.

  1. Censorship Resistance

As dApps are not controlled by any single organization or entity, they are more resistant to censorship and manipulation. This feature is especially important for applications related to finance, social media, or communication, where users seek freedom from centralized control.

  1. Improved Trust and Transparency

The open-source nature of dApps and the transparency of blockchain technology foster trust in the applications, as users can verify the code and monitor transactions on the network.

  1. Reduced Intermediary Costs

dApps have the potential to eliminate intermediaries in various industries, leading to reduced fees and increased efficiency. By cutting out middlemen, dApps can streamline processes and pass on cost savings directly to users.

Risks of dApps

  1. Scalability Issues

One of the primary challenges faced by dApps is their limited scalability compared to traditional apps. As blockchain networks grow, transaction processing times may slow down, and fees may increase, affecting the overall user experience.

  1. Regulatory Uncertainty

The regulatory environment surrounding dApps and cryptocurrencies is still evolving, and future regulations may impact the development and adoption of dApps. This uncertainty can make it challenging for developers and users to commit to long-term projects or investments.

  1. Technical Complexity

The development and use of dApps often require a greater understanding of blockchain technology, which may present a barrier to entry for some users and developers. This technical complexity can hinder widespread adoption and limit the growth of the dApp ecosystem.

  1. Security Risks

While dApps are generally more secure than traditional apps, they are not immune to security risks. Vulnerabilities in smart contracts, for example, can lead to the loss of funds or other issues. It is essential for developers to thoroughly audit and test their code to minimize potential security risks.

Examples of dApps

  1. Decentralized Finance (DeFi) Platforms: Sites like Uniswap, and Aave enable users to trade, lend, and borrow cryptocurrencies without the need for traditional financial intermediaries, such as banks or exchanges.
  2. Decentralized Marketplaces: Platforms like OpenSea and LOOKSRARE facilitate the buying, selling, and trading of digital assets, such as non-fungible tokens (NFTs), in a decentralized and transparent manner.
  3. Decentralized Social Networks: Sites like Steemit and DTube offer alternatives to traditional social media platforms, providing users with greater control over their data and a censorship-resistant environment.


dApps represent a significant shift in the way we interact with and develop applications, providing users with greater control, security, and transparency. By understanding the key differences between dApps and traditional apps, as well as the benefits and risks associated with this emerging technology, you can make more informed decisions about the future of application development and usage. As the dApp ecosystem continues to evolve in the crypto space, we can expect to see further innovation and growth in this exciting field.