Over a decade ago, when Bitcoin was created, people were amazed by blockchain-based virtual money that allowed you greater control over your own finances. When Ethereum came along, a yet more wonderful concept came into play- that of a decentralized application.
So what are decentralized applications? DApps are software programs that exist and run on blockchain networks. They provide a range of financial and other products and services without any central authorities watching over them.
If you are new to the blockchain space, ‘what are decentralized applications?’ is a question you still may have. Let’s find what are DApps in blockchain, types of DApps, and yet more in this post, shall we?
What are DApps in Blockchain?
‘DApp’ stands for decentralized application, as we know. It’s a type of software that runs on a blockchain network instead of a single computer server. This means that a DApp has its own code, data, and storage that’s not controlled by any central authority.
Following the rule of blockchains, DApps run on many different computers worldwide, making a DApp harder to hack or shut down than traditional apps. The main difference between DApps and traditional applications is that they can run without any third parties involved! This means very low fees, no censorship, no central point of failure, and more flexibility than you can imagine.
How Does a DApp Work?
Now that we know ‘what are decentralized applications?’, let’s find out how the many types of DApps work. DApps work by using blockchain technology, and therefore they follow a blockchain’s way of functioning. For the uninitiated, a blockchain is an encrypted database that stores information about transactions. Each transaction is stored in blocks linked together chronologically in a chain (hence the name). This creates an immutable ledger of all transactions on the platform, meaning that no one can tamper with any part of it without leaving evidence behind.
Whatever services a DApp provides, it does so by facilitating P2P (peer-to-peer) communications between service providers and users through blockchains.