What are decentralized applications (Ðapps)

Decentralized applications (Ðapps) are apps that are peer-to-peer — the users connect to each other directly.

You can think of decentralized applications as applications that exist without a central database like the mainstream applications — Facebook, Google, Yahoo, and etc. Data is stored in the blockchain — a digital ledger in which transactions made in a cryptocurrency are recorded chronologically and publicly.

Here is what Marc Andreessen has to say about blockchain:

“The practical consequence […is…] for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.”

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One very interesting thing about decentralized applications is that you own your data — for example, if Facebook was to be a decentralized application, you’ll earn exclusive for every content you post on Facebook, advertisers will pay you directly.

Here is a practical example — Steemit, Steemit is a decentralized blogging platform, that gives you the opportunity to earn exclusively for all activities on your content — likes, comments, upvotes and you even get paid for engaging with other people’s content as well.

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According to a Dapp white paper by David Johnson, for an application to be considered truly decentralized, it has to:

1. Be completely open-source and operate autonomously with no entity in charge of the majority of its currency;

2. Have any protocol changes that are designed to make some overall improvement approved by all its users;

3.Cryptographically store all of its operation data and records in a public blockchain;

4. Use a bitcoin or a currency that is native to its blockchain system so that it can be accessed for use and any future contributions to its value from miners; and

5. Generate tokens, or currency, which follows a standard cryptographic algorithm.

To provide a further picture of dapps, they have been further classified into three types:

  • Type 1:  Dapps have their own blockchain. These are known as Bitcoin, Litecoin, and all other “alt coins.”
  • Type 2: Dapps use the blockchain of a Type 1 dapp, are their own protocols, and have tokens to provide the necessary functionality. The Omni Protocol is an example of a Type 2 dapp. This type is like a software program.
  • Type 3: Leverage the protocol of a Type 2 dapp to become their own protocols. They also have their own tokens to generate a use. The SAFE Network uses the Omni Protocol for issuing safe coins that are then used to get distributed file storage. This type is a specialized type of software that fulfills a unique need or function.

Advantages of decentralized applications

1. It brings trust to web transactions: Trust has always been a big challenge for business people online. With decentralized application through the proof-of-work principle, all transactions are quite transparent. If you made payment to a certain address it’s visible to the public.

And you can’t alter it to say the payment was not made. You can view such transactions for the Ethereum blockchain here and for bitcoin here.

For example here is a transaction I did with bitcoin a few days ago.


Anyone can check it up and it’ll basically be there forever.

It practically helps you prevent fraud.

2. Payment processing: You wouldn’t need to integrate any payment processor like Paypal, Stripe to receive payments from clients. Your clients can quickly and easily make payments with any of the accepted cryptocurrency.

3. It’s serverless:  Apps built on the blockchain network will have no server downtime. Unlike the apps built on centralized platforms.

4. It serves as a mechanism for token distribution through development, fundraising, and mining.

The best place to build Dapp as of this writing is on the Ethereum blockchain project.

What can you build with Ethereum

Ethereum is a decentralized application platform and smart contract enabled blockchain.

Here are some decentralized apps built on the Ethereum blockchain — apps based on finance, Social media apps, reputation management systems, voting applications, gambling applications, crowdfunding apps and so much more.

You can go ahead and check out some of the apps that have been built on the Ethereum blockchain in Ethercasts.

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Startups and products build around blockchain

Many startups have been built around blockchains and are doing extremely well. Here are a few of them.

There are over 101 companies listed here, you can take a look for inspiration. Most interestingly, you don’t need to learn a completely new language to be able to build a Dapp. You can leverage your current web development skills in HTML, CSS, and JavaScript to build Dapps and there are some frameworks you can also leverage to help you get started. Get started by visiting the Ethereum Project website.

Decentralized application investors

More than 774 individuals and 654 companies ( Angel Investors ) have invested in the blockchain network as of this writing.

And Fortune has reported that Thirty big banks, tech giants, and other organizations—including J.P. Morgan Chase, Microsoft, and Intel—are uniting to build business-ready versions of the software behind Ethereum, a decentralized computing network based on digital currency.”

And there are several investors coming up nowadays.


Blockchain is an emerging technology — it makes it easy to transfer value, carry out a safe and transparent transaction and also helps you build fast serverless applications. It’s a technology you should consider building a business around. What do you think?

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Eze Sunday Eze
Eze Sunday Eze is the founder of The Growthbar. He's a web developer, inbound marketer, and Freelance Content Writer. Let's connect. Hit me up. On Linkedin.

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