Cryptokoin.com – A lot has been said about the blockchain and the developments created on the blockchain. But perhaps the most notable development is the concept of decentralized application (dApp).
In every dApp, there is a decentralized element. A feature that gives an advantage to applications running from an ideal blockchain.
To explain in a simple way; A dApp is more than just an ordinary application running from a single server, as in the traditional architecture. Dapps work with thousands of computers, called nodes, that support the blockchain instead of a single server. So the dApp is not from a single server; It works from a peer-to-peer network and no one has control over it.
As in all interesting fields, there is debate about what an ideal decentralized network is. So the question here is simply, “Which perfect blockchain to run the dApp on?” the question is. With the emergence of smart contract platforms that enable dapps to work, users have a wide variety of options. Usually the discourse here; on scalability, security and decentralization.
From the multiple smart contract platforms powered by DappRadar, different ways have been chosen to solve the above-mentioned triple problem. Instead of perfect decentralization, emphasis may be placed on scalability or security.
Most dPoS, including EOS and Tron, use consensus algorithms. Ethereum remains the most decentralized platform.
Ideally, a dApp running over a distributed network of nodes is the most decentralized. Dapps ensure that the presence of the intermediary is not required and remove the role of central authorities, allowing users to take control of their data.
At the heart of every dApp is a smart contract. Smart contracts are autonomous and are a special program that executes on its own when a set of specific conditions is met. While a dApp is blockchain-enabled, the smart contract acts as a binding.
Like traditional single-server applications, dApps use the same programming language on the front-end to build. On the backend, however, a smart contract acts as a connector rather than a different API.
Dapps are distributed from blockchain networks with their own currencies. For example, Tron has a local currency called TRX, while Ethereum has ETH. Dapps are often coded to do business with these currencies. They provide services in their ecosystem through their own tokens to pay for their wages, or in this case gas.
Having gained prominence after the massive cryptocurrency rally at the end of 2017, dApps, almost two years old, continue to shape operations. Operations are extremely useful and the data produced cannot be changed. Moreover, increased dApp usage improves the quality of the blockchain ecosystem and increases the value of on-chain coins.
Features of decentralized applications (dApps)
To understand how a dApp works, you need to understand the main features that set them apart from other centralized versions. These features are:
- A dApp should be open source and ensure autonomy due to smart contracts. In other words, the rules governing the operation of the dApp must be hard coded and the changes must be accepted by the community, as defined in the consensus protocol.
- The foundation of blockchain should be decentralized and open encrypted transactions.
- The dapp must contain a token with a digital asset. This token must be created via a known standard protocol. For example, it could be Ethereum’s ERC-20 or Tron’s TRC-10. Tokens are used for incentives.
- A standard encryption algorithm must exist for transaction encryption and a valid consensus protocol must exist as proof-of-value.
How do decentralized apps work?
Full implementation of these features ensures satisfactory operation of a dApp. The open-source dApp’s smart contracts are distributed from a completely decentralized blockchain using a standardized token generation mechanism.
Dapp users can monitor encrypted transactions, knowing that this transaction is secure, confidential and immutable. For a dApp to work, it must be uploaded to a blockchain with an immutable ledger where the transaction log is the authority.
The first process referenced by referencing the dapp defines its code. The code defines the number of different ways that future processes can refer to the first commit (i.e. the dApp).
These exceptional features will, in the long run, give dApps the ability to create a range of use cases covering banking, logistics and much more. Thus, dApps will become a self-sustaining resource that can attract investors.
With their growing popularity and rapid development, their greater adoption in DeFi and banking is hugely beneficial for users.
Why is it important to monitor decentralized applications?
The Dapp ecosystem is still in its infancy and DappRadar acts as the data and analytics provider for dApps. DappRadar currently tracks dApps using three main metrics: volume, users and balance.
Volume provides users with accurate data on token volume within the dApp and acts as a measure of activity. In September 2019, DappRadar started tracking non-native ERC-20 tokens in smart contracts of both EOS and ETH to bring greater clarity and accuracy to this data.
User figures provide data on the number of active DAUs (daily active wallets) in a given dApp ecosystem. This metric allows users to measure the effectiveness of a dApp and allows them to decide if they want to participate. From the very beginning, DappRadar has been fighting against fake and manipulated data and actively filtering it out.
The balance within a particular dApp allows potential users to identify some usage and popularity information. Shows the total token flow within a dApp. It can also act as a measure of fraudulent activity. For example, if a dApp displays very few DAUs and points to large volumes in smart contracts, it could be fraudulent.
The dapp space is pretty exciting. It is rapidly evolving to meet demands and regulations.
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