What is a decentralised application (dapp)

Ethereum

What is a decentralised application?

On websites today, users do not possess sole control over the data they share on the internet.

The peculiarity of Ethereum is that it tries to use the blockchain to correct what the designers believe is a flaw of the internet’s design. It functions like an app store that isn’t controlled by one entity where any individual can publish their applications (dapps) without requiring a middleman for the functioning or management of user’s information. The users and providers are connected directly in the dapps.

A typical example could be to use this design for a decentralized Twitter that doesn’t allow for censorship. Once a message is published to the blockchain, it cannot be erased or edited by even the company that created the blogging network. One of the dapp’s main characteristic is that they are open source and don’t possess a central point of failure.

The three types of Dapp’s

In the advent of this new technology, those in support of Ethereum would be thrilled by the thought of decentralizing “all the things.” However, the application types possible to build with the Ethereum platform could be somewhat narrow. The white paper for Ethereum splits dapps into three types: the applications that manage money, the applications where money is required but also needs another piece, and applications in the ‘other’ category that includes governance systems and voting.

In the first, a user may require to exchange ether as a means of settling a contract with a second user and by using the network’s distributed computer nodes, the distribution of the data can be enhanced.

The second means combines money with sets of information’s obtained from outside the blockchain network. A Typical example is the crop insurance application that largely depends on an external feed of the atmospheric condition. (Say a farmer purchases a derivative that automatically matures when a drought impedes his harvest).

The smart contracts depend on “oracles” that transfer updated information on the external world. (However, it is worthy to point out that a few developers are questioning the ability of this to be used in a decentralized way.)

Given that the bitcoin can avoid financial authorities, one would wonder if the same can be done for companies and other similar organizations. Decentralized autonomous organizations is an interesting specie of the dapp whose goal is to create a leaderless company, set out rules at the start on how users can vote, create steps in releasing the companies funds, and then……let it function on its own.