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What are Decentralized Applications?

What are Decentralized Applications?

At this moment in time, internet users throughout the world do not have full control over the data that they share across all websites. Instead, all of the data shared goes through a middleman that processes it and then sends it to the next interested party.

Decentralized Apps (dapps), built with the help of the Ethereum network are bound to change this in the future. Their sole purpose is to connect providers and the afferent users directly. Another main characteristic associated with dapps is the fact that they often have an open-source API, provide immutability thanks to the blockchain and most do not have a point of failure.

Currently, dapps are divided into three main categories, these being: apps which manage your money, apps that require the involvement of money and apps which provide either governance or voting systems.

To further put things into perspective, we will note out the main features of each type.

Apps that manage your money

Most of the times, these apps work by having a user exchange a certain amount of ether with another use in order to settle a contract, with the help of the computer nodes that the network is using.

Apps that involve money

This second type generally refers to apps that mix both money and information coming from outside the blockchain network. A relevant example in this case would be buying property, where you’d pay with money, yet the network would extract all relevant information from the outside and digitize it under the form of a smart contract.

Decentralized Autonomous Organizations (DAOs)

The last type, also referred to as DAOs, has one main goal: forming an app-based democracy, where members can issue votes verifiable via the blockchain network for various purposes. One relevant example would be a DAPP provided by a company for its shareholders, where they could vote on what the best moves for the company would be. There have been numerous analyses of utopian world, where the main democratic instrument of the people would be a DAOs app, which could then be used to issue votes for choosing government representatives, parliament members, certain laws and more, depending on the needs of the society.

Currently, developers throughout the world are working on various types of dapps via the use of Ethereum and smart contracts. In the future, chances are that many of these apps would be used by people on a daily basis, as the idea of a middleman is removed from society, and people start relying on decentralized apps where they own all control.

Based on these aspects, what’s your opinion on Dapps? Do you see them being used in the future? Let us know your thoughts.

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