An introduction to dapps and how they work
Apps are a big part of our lives – we use them to connect with friends, stay organized, and get things done. But what happens when the app is on a decentralized network instead of a centralized one? That’s exactly when Decentralized Applications (Dapps) come in. What are Dapps? How do they work? Why should we even care about decentralization? In this blog post, we’ll take a closer look at this new technology and explore how Dapps are already changing the way we use the web. Stay tuned!
What are Dapps or Decentralized Applications?
A decentralized application is an app that runs on a decentralized network. It is similar to a regular app that you would find on your phone or computer, but it is not centrally controlled by any one person or entity. Why? Because Dapps operate from a peer-to-peer network and not from a single server.
How do Dapps Work?
Dapps are built on top of decentralized networks, such as the Ethereum blockchain. When you use a dapp, you are actually interacting with the decentralized network that it is built on.
This is what allows dapps to be censorship-resistant and trustless. Because there is no central entity controlling the dapp, no one can censor it or shut it down.
They are part of the Web3 movement that is changing the way we connect and interact with the internet.
What is a blockchain?
A blockchain is a digital logbook of transactions, verified and maintained by a network of computers. Each individual set of records is a block, which links to the previous block, and thus becomes a chain of blocks. That’s why it’s called a blockchain.
Every node or computer in the network confirms the correctness of newly added data. As a result, the blockchain knows how many tokens are in a certain wallet at any given time, making tampering impossible.
Nodes or computers that maintain the blockchain, are rewarded through a certain mechanism. The type of mechanism depends on the type of blockchain. This can either by mining rewards, staking rewards or for example rewards based on transaction fees. A blockchain is considered optimal when it’s decentralized and everybody’s free to participate.
What are Smart Contracts?
A blockchain isn’t only used for keeping track of token transactions. Blockchains like Ethereum allow users to launch a computer program onto the blockchain.
Smart contracts are protocols on the blockchain that offer a service and execute that service without the need for third parties.
For example, a smart contract could allow for a token swap between two different tokens. In simple terms the smart contract would state something like: if you give me token A, I will give you token B. This particular action doesn’t need a middleman. Or, to think of it another way, the middleman has been replaced by an algorithm.
However, does the technical mumbo jumbo really matter? Most people won’t care, they just want to know how the technology benefits them. Even though we believe knowledge is an important foundation for adoption, creating a smooth user experience and real utility is far more fundamental for mainstream adoption.
What are the different types of Dapps?
In the same way that mobile devices needed apps to make them a necessary item for everyday life, the blockchain needs the same fuel to get it into the hands of everyone.
Dapps provide that fuel in the shape of applications traversing separate categories, such as games, finance, gambling, and exchanges.
1. Gaming Dapps
Videogames created with blockchain technology are often referred to as Web3 games. These gaming dapps benefit from the properties of the blockchain, such as trustlessness, immutability, and transparency, to provide gamers a better experience.
They are also the most used type of dapp. Players can take part in the game’s decisions, take profit from their in-game performance, and own their in-game items.
- Some of the most used Gaming dapps are Axie Infinity, Alien Worlds, and Upland.
2. Finance Dapps
Finance dapps provide users with decentralized alternatives to traditional financial services – that’s where Decentralized Finance (DeFi) comes in. These dapps are built on a blockchain like Ethereum and use smart contracts to automate financial transactions.
With finance dapps, users can get loans, trade and exchange cryptocurrencies – all without having to go through a bank or other financial institution.
- Some of the most used Finance dapps are PancakeSwap, MetaMask, Uniswap, and Bungee.
3. Gambling Dapps
Gambling dapps are one of the most popular types of dapps, as they offer a decentralized alternative to traditional online casinos. These dapps use the blockchain to create provably fair games, where players can bet on the outcome of an event.
They also allow users to wager on the results of real-world events, such as sports matches.
- Some of the most used gambling dapps are TTPlinko, Serious Dice, and BetSwirl.
4. NFT Marketplace Dapps
NFT Marketplace dapps are platforms where users can buy, sell, or trade non-fungible tokens (NFTs). These dapps use the blockchain to verify the authenticity of the NFTs and provide a secure way to trade them.
They have become increasingly popular since the NFT boom in late 2020, and are now available in various blockchains.
- Some of the most used NFT marketplace dapps are OpenSea, Magic Eden, and Atomic Market.
How Can I Find the Best Dapps?
When it comes to finding and monitoring the best decentralized apps, there is no better place than DappRadar’s Top Dapps Rankings.
Lucky for you, we track data from several different dapps on multiple blockchains and make it available on our platform with an excellent user experience.
We also publish daily news and tutorials on our blog about the hottest Dapps you need to know to stay up to date with future technologies.
Furthermore, in the DappRadar Portfolio Tracker, you can manage your digital assets, cryptocurrency, and NFTs, by connecting your web3 wallet.
- Read also: Top 5 Things You Can Do With DappRadar
What are the Benefits of Dapps?
Dapps allow users to create wealth through decentralized finance, have digital ownership through non-fungible tokens, and participate in virtual economies with real-world impact.
A dapp allows users to utilize their assets on the blockchain without the need to use a centralized party. Users don’t need to put their tokens on an exchange, which means they lose full control over their assets.
In addition, a dapp is not hampered by service outages or censorship. The blockchain never goes down. Governments can block a website URL, but they can’t deny access to a smart contract or dapp.
Why Should I Care About Decentralization?
The internet as we know it is centralized, which means that a small group of entities control it. This can be seen in the way that our data is stored and controlled by big tech companies, such as Facebook and Google.
However, decentralization offers a way to take back control of our data and give users more power over their online activity. With a decentralized internet, there is no single point of failure and no central authority that can control or censor what we do online.
This is why dapps are so important. This is why dapps belong in the future.
After all, why shouldn’t you care about your privacy, freedom, and security?
How to Get Started Using Dapps?
To use a dapp, you will need a wallet. When using your desktop browser, we advise you to install MetaMask. This web3 wallet can be connected to a variety of blockchain services, including Ethereum, Binance Smart Chain, and Polygon.
- Download Metamask here
- Learn how to use Metamask here
- How to connect Binance Smart Chain to Metamask
- How to connect Polygon to Metamask
Once you’ve done that, you’d need to go to DappRadar and find the dapp you’re looking for. Perhaps you want to start earning more interest on your tokens, or you’re looking for a cool game to play.
What are Dapps: Summing Up
Dapps are fundamental for many functions of decentralization on the blockchain. These applications on the blockchain cut out the middleman, and empower users.
DappRadar is the worlds leading dapp analytics and data site. To explore the world of decentralized applications more and understand the benefits they offer we suggest bookmarking DappRadar and signing up for our weekly newsletter below.
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