Decentralized apps (dapps) are one of the biggest use cases for blockchain technology. Dapps completely invert how users currently interact with software applications. Through decentralization, the app’s users retain their own data – not the developers.

Dapps vs apps

Dapps are constructed on a peer-to-peer network, otherwise known as a blockchain. This network is made up of various ‘nodes’ which are each user’s computer or mobile device. 

This is in stark contrast to web2 apps, which operate on centralized databases, controlled by the app’s developers or a corporation which owns the proprietary software. 

For years, web2 apps have had to make users aware of how the app’s developers may use their data. Users have to agree to countless terms and conditions before being allowed to use the app.  

With Dapps, privacy and security are enforced in a “trustless” system; that is, the software operates on a peer-to-peer network, removing the need for a ‘trusted third party.’ 

In other words, a web3 Dapp operates on each user’s own device as part of a trustless network while web2 apps operate on a company’s central database.

One other difference, in terms of utility, is that apps require users to sign up for native accounts with the app’s company and remember countless different passwords to login. With Dapps, users are not required to setup an account or remember passwords; their private keys are the account.

The value Dapps

There are several advantages to using Dapps. They have brought incredible value to the market at the ground-level and their potential is only just beginning. 

Because the blockchain allows a Dapp to operate on a peer-to-peer network, the real value of a Dapp is in its decentralization. By circumventing big tech’s focal point of centralized servers, the internet is inverted and redesigned to make users the focal point. 

With this colossal shift come three innovative elements that almost every Dapp uses:

1. Smart contracts – Software programs connected to their specific network (i.e. Ethereum) that are built to execute certain functions at certain times. For example, funds for a loan will be deposited into a borrower’s crypto wallet automatically as soon as the borrower submits a certain amount of collateral.

2. DAOs (Decentralized autonomous organizations) – A DAO is essentially the Dapp’s community and is where users can vote on changes to anything related to Dapp: from the icon image to changes in the smart contract’s code script.

3. True privacy and security – Since users’ data are not being stored on a central server, the concern over that single server being hacked by bad actors is removed. While it is still possible to hack a Dapp and steal users’ data, it is much more difficult to do so.

Top Dapps

There is a Dapp for just about everything and a great place to start exploring them is DappRadar. There are Dapps for gaming, music, social networks, art, cryptocurrency exchanges and even gambling. Examples of Dapps include:

1. Pancakeswap – A popular web3 trading exchange. Users can trade any token they own on the decentralized Binance Smart Chain. 

2. Axis Infinity – The most popular blockchain gaming platform. Players can buy avatars, as well as land in the game’s marketplace. 

3. KlimaDAO – An environmentally-based DAO that tokenizes carbon credits intending to incentivize companies to reduce their carbon emissions.

4. Magic Eden – A major NFT exchange platform that is built on the Solana blockchain.

5. Serious Dice – A gambling Dapp built on the Thundercore blockchain. Serious Dice is a classic dice game with a web3 community where players can play, chat, and win jackpots.

The future of Dapps

With trustless systems providing true privacy and security, the execution of smart contracts and the democracy of user-centered DAOs, Dapps are just beginning to show their value. 

Admittedly Dapps have their weaknesses as well. Just today, Axie Infinity had their Ethereum bridge hacked at a loss of $622 million. Last year Badger DAO lost $120 million after hackers duped members about transactions that were fraudulent.

Despite these weaknesses, Dapp adoption by the market should not be underestimated because Dapps are one of the primary driving forces away from web2 and into web3.