What Are Dapps? The New Decentralized Future

7 months ago
What Are Dapps

What are Dapps you might ask? Imagine having your car working away, transporting passengers while you’re at work. Imagine having your computer utilizing its spare capacity to serve businesses and people across the globe. Imagine being paid for browsing the web and taking ownership of your, arguably invaluable, attention. Imagine a world like that. That world is not far away.

A paradigm shift in the way we view software models is approaching. When Bitcoin, the first cryptocurrency, made us reassess our definition of Store of Value (SoV), it also revealed a sneak peek of the future: a world running on decentralized applications (Dapps). These distributed, resilient, transparent and incentivized applications will prove themselves to the world by remapping the technological landscape.

Want to learn about Dapps in greater detail? Check out our dedicated blockchain courses on Dapps and Ethereum.

Understanding Blockchain

Before we can even fathom what Dapps do, we need to be familiar with its underlying technology—the blockchain. Put simply, a blockchain is a ledger of records organized in ‘blocks’ that are linked together by cryptographic validation. It is a digital storage of consensus truth. The key is to understand that this ledger is neither stored in a centralized location nor managed by any single entity, hence its distributed-ness. The block validation system results in new transactions being added irreversibly and old transactions preserved forever for all to see, hence its transparency and resilience. Open-source software that leverage on the blockchain technology are called Dapps.

what are dapps

 

The Birth of Decentralized Applications

 

As the concept is still in its infancy, there might not be one definition of what a Dapp is. However, there are noticeable common features of Dapps:

  • Open Source. Ideally, it should be governed by autonomy and all changes must be decided by the consensus, or a majority, of its users. Its code base should be available for scrutiny.
  • Decentralized. All records of the application’s operation must be stored on a public and decentralized blockchain to avoid pitfalls of centralization.
  • Incentivized. Validators of the blockchain should be incentivized by rewarding them accordingly with cryptographic tokens.

If we adhere to the above definition, the first Dapp was in fact Bitcoin itself. Bitcoin is an implemented blockchain solution that arose from problems revolving around centralization and censorship. One can say Bitcoin is a self-sustaining public ledger that allows efficient transactions without intermediaries and centralized authorities.

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The Ethereum Network

While Bitcoin paved the way for cryptocurrencies and the blockchain technology, Ethereum was the one that first showed everyone the true potential of blockchain technology. Ethereum allowed developers from all over the world to run their Dapps on top of their platform. Ethereum developers can code smart contracts on Ethereum, which serves as the blueprint for the Dapp.

In Ethereum’s white paper, it was stated that the intention of Ethereum is to create an alternative protocol for building decentralized applications with emphasis on development time, security, and scaling. You may think of Ethereum as, for the lack of a better analogy, the Mother of Dapps. Armed with its very own language, Solidity, Ethereum enables developers to form smart contacts using the Turing-complete Ethereum Virtual Machine (EVM). With these tools available, developers made Dapps that have real-life use cases, ranging from asset management to resource planning.

Examples of successful Ethereum-based Dapps that have achieved millions of dollars in market cap include Golem, Augur, BAT, etc.

What are dapps

Other Smart Contract Platforms

Ethereum paved the way for a host of smart contract platforms. We are going to focus on EOS and Tron because along with Ethereum, these two platforms are the ones which have the most developer activity.

Helmed by STEEM creator Dan Larimer, EOS is one of the most exciting projects out there. Their main aim is to provide developers with a highly scalable platform, which Ethereum has failed to do thus far.

Tron has also leveraged scalability to garner a huge audience for themselves. However, what sets them apart in the cryptospace is the aggressive marketing and promotion by their founder Justin Sun.

Before we go any further, let’s look into Ethereum, EOS, Tron, and see the Dapp activity going inside each of those platforms.

Ethereum vs EOS vs Tron

We are going to explore the DApps made on these three platforms and classify them according to the following:

  • Users in the last 24 hours.
  • Transaction volume in the last 24 hours.
  • Number of transactions in the last 24 hours.

All the data and numbers have been collected from DappRadar.

What are dapps

Up first we are going to explore the Dapps being hosted on Ethereum. Let’s categorize them accordingly.

Users in the last 24 hours

What are dapps

 

Ranking these Dapps according to the number of users in the last 24 hours:

What are dapps

As per our stats, there are only three DApps on Ethereum which managed to get more than 1000 users in the last 24 hours. Of the top five DApps, two are in the gaming category and two are in the exchange category.

Transaction volume in the last 24 hours

What are dapps

Ranking these Dapps according to the transaction volume in the last 24 hours:

what is cryptocurrency

Only two DApps managed to pass $1 million and both of them, predictably, are gambling DApps. Among the top five, two, as we said, are gambling DApps while two are exchanges.

 

Ranking these Dapps according to the number of transactions in the last 24 hours:

What are dapps

Of the top five DApps, two are gambling and two are gaming. The DApp with the most number of transactions in the last 24 hours in IDEX, which is an exchange.

EOS

Up next, we have DApps working on top of EOS.

Users in the last 24 hours:

what are dapps

Ranking these Dapps according to the number of users in the last 24 hours:

As you can see, EOS DApps have far more users than the Ethereum-based ones. In fact, the number five ranked EOS DApp has more users than the number one ranked DApp.

Transaction volume in the last 24 hours

what are dapps

Ranking these Dapps according to the transaction volume in the last 24 hours:

what are dapps

Four out of the top five DApps managed to cross $1 million in transaction volume over the last 24 hours.

Numbers of transactions in the last 24 hours

what are dapps

Ranking these Dapps according to the number of transactions in the last 24 hours:

what are dapps

The top four DApps in the list above are all gambling DApps. The top two DApps have both managed at least 300,000 transactions in the last 24 hours.

Tron

what are dapps

Now we will be looking into the DApps running on top of Tron.

what are dapps

Ranking these Dapps according to the number of users in the last 24 hours:

what are dapps

Tron DApps has pretty as many users as EOS DApps. As you can see, four out of the top five DApps belong to the gambling category. You will notice that the popular Tron DApps are mostly gambling ones.

what are dapps

Ranking these Dapps according to the transaction volume in the last 24 hours:

what are dapps

Transaction volume in the last 24 hours

While the EOS DApps managed to have four DApps which crossed $1 million, Tron’s top two DApps managed to do more $3.5 million transaction volume, which was more than what the number one EOS DApp aka Poker EOS managed. Out of the top five, three are gambling while two are exchanges.

Numbers of transactions in the last 24 hours

what are dapps

Ranking these Dapps according to the number of transactions in the last 24 hours:

what are dapps

Four out of the top five DApps are in the gambling category. The top two DApps, Tron WoW and TRONbet have far outstripped their competition. EOS DApps once again were able to offer more consistency in this department.

Overall DApps from all platforms

Now, let’s bring Ethereum, EOS, and Tron together and see what are the best performing DApps across all of them.

Users in the last 24 hours

what are dapps

Ranking these Dapps according to the number of users in the last 24 hours:

what are dapps

EOS-based DApps have attracted a large number of users. PRA Candybox edged out OCADAPP by 100 users. Three out of the top five DApps are based on EOS.

Transaction volume in the last 24 hours

what are dapps

Ranking these Dapps according to the transaction volume in the last 24 hours:

what are dapps

Ranking these Dapps according to the number of transactions in the last 24 hours:

What are dapps

To Kickstart a Dapp Project:

  • Create a whitepaper. Your whitepaper should address a problem you wish to solve. It should clearly state the intentions and goals of the Dapp. Describe the plans for your Dapp’s token distribution, and how you intend to go about doing it. Decide on a mechanism for establishing consensus, and recruit your management and development team. Be honest with any technical difficulties you foresee and state your technical requirements clearly.
  • Gain a following. Discuss your plan and form a community. Value feedback and revise your plans accordingly.
  • Start a crowd-sale. Once the Dapp has gained enough momentum, decide on a date to receive token funding. The Dapp’s crowd sale website should have all the information that an investor may need.
  • Bring your ideas to fruition. Begin development and welcome new developers and interest groups.

Initial Coin Offerings (ICOs)

The birth of a new member or Dapp in the blockchain community is called an ICO. It is a fundraising event based on token sales that could potentially huge gains for the well-informed and daring investors.

In an ICO, the token value is arbitrarily determined by the start-up team. When the token gets listed on the exchange, the value is then corrected via price dynamics. The eventual value will be settled on by the participants of the network, other than accredited agencies.

No matter the accuracy of an ICO valuation, the fact remains that ICO itself is a driving factor of interest and innovation in the blockchain scene. ICO is the much-needed catalyst in opening a well of possibilities and extending the value that blockchain offers.

What are Dapps

How to Participate in ICOs

To engage in an ICO, follow the steps below:

  • Stay up to date. Find out their Slack group, Twitter handles and official website. Keep up with their ICO announcements and plans.
  • Prepare a wallet. Do not use an exchange wallet as the address of an exchange wallet may change without you noticing. Some hardware wallets are not capability-wise ready for ICO tokens. This leaves making a wallet on myetherwallet.com as the best option. Ensure that the wallet has the necessary amount to transfer, including the gas price. For example, if you wish to transfer 10 ETH for the ICO tokens, make sure you have more than 10 ETH inside your wallet to pay the gas fee. Oversights like these are common and will result in failure of purchase.
  • Be on time. Some popular ICOs are over in an hour. To increase your chances of securing ICO tokens, do prepare and make the transfers as early as possible.
  • Safekeep your tokens. Keep your wallet safe. Once the token is listed and available on exchanges, you may transfer your tokens from the wallet to an exchange to start trading.

In choosing the right ICO to invest in, ask yourself the following questions:

  • Are my investments safe? Preservation of capital should be the priority of the investor. Can you trust the dev team with your money? Are you leaving your money with founders who were involved in scams?
  • Is there a long-term plan? Do they have the abilities and the team makeup that the project demands?
  • Is this just a well-marketed project? Sometimes all it takes is a professional looking website for inexperienced investors to be sold. Will the team be able to deliver its promises?
  • What is my exit plan? As a high-risk investment, ICOs may require you to define an investment horizon or timeline. At which price point do you intend to exit?
  • Does it hold a unique advantage? As the Dapp scene matures, newcomers with similar value propositions will join the market. What is the edge that this Dapp would have over future competitors?

As it stands, the current ICO scene is massively hyped. To protect yourself from capital losses, perform the necessary research and pick your ICO with care.

A Decentralized Dapps Future Awaits

The inevitable onslaught of blockchain adoption will render numerous practices obsolete. It may be a bold and distant conjecture, but services such as banking will be made redundant as the world learns to operate and finance itself by self-sustaining, trust-less and decentralized networks. Large corporations hurrying to secure their place in the blockchain movement is only a testament to that.

Perhaps another topic worth giving some thought over: by outsourcing information and value transfer to the blockchain, we increase efficiency by reducing middlemen services, but at what cost? As the services, a human can provide decreases and the value of a human erodes, can we say confidently that our lives will improve? No matter the answer to that question, we can only take the leap of faith, with blockchain as the next step forward and towards a world unified by shared data.

 

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newest oldest most voted
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Geek
57
Geekay Poh

this is a great guide for understanding Dapps

M
Geek
143
Muhammad Imran

you make this topic interesting and easy to understand.

franciscogomezz865@gmail.com
21
Francisco Gomez

Hello everyone, Bitcoin is currently my most favorite thing and i completely love the technology behind it out of which has spewed several other coins. I know its quite unclear for many how lucrative bitcoin is currently. i have earned thousands by following a less talked about approach which is trading. Trading is less affected by the speculative and unpredictable nature of cryptocurrency and with the right techniques and expertise, you can easily earn so much when others are actually making loses in an unstable market. There are several ways to make consistent profit but the safest and easiest from… Read more »

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7
Nimit Lahare

Thanks for such in details information very useful. you also can explore blockchain business on Aeries Technology.
https://www.aeriestechnology.com/blockchain-technology-services.html

Craig Moss
ProGeek
6,218
Craig Moss

A great intro to Dapps, it will be interesting to see all the different projects, use cases and variations that will emerge in the years to come, especially as the cryptosphere truly develops

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