Wondering what is a decentralized application? We’ve got you covered!

A decentralized application, or “DApp,” is an application that runs on a P2P network of computers, with no single computer being in charge. In other words, decentralization grants the end-users control over their data and how it’s used. They don’t need to trust any one entity to be reliable or fair. The way this works varies, but most commonly each end-user installs and runs their own software. Thus the network is made of a large number of users all running the same software.

Decentralization makes it possible to create incentivized networks that don’t rely on any single entity. In a DApp, every participant can be directly compensated for his or her contributions, which makes market coordination possible without anybody in charge.

Dapps differ from traditional web apps, such as Facebook and Google, because instead of serving one central server for all users, DApps have a peer-to-peer network of users running their own nodes. This means that there’s no single point of failure. Because each user is responsible for his or her own data, no one entity can be trusted to keep data secure. It also means that incentives change at every level of the system.

How do DApps work?

DApps work differently from traditional web apps in how the code is stored and how it controls data storage. They don’t have a server that holds all the data, they are distributed and decentralized.

In reality, each end-user has his or her own copy of the application running on their own computer, so there is no centralized server for which to store sensitive information. The blockchain is simply a public ledger where transactions are recorded. Every participant can see every transaction that’s been made in the network.

Furthermore, the value in these networks is not the data the user contributes, but the information that they’re able to share. Most people don’t give credit to their favorite authors and bloggers, but we all benefit from the information we can get from carefully curated, quality sources.

Every DApp must be transparent and trustworthy. The system must be designed in such a way that malicious behavior isn’t possible without being caught by the community. Transparency and honesty are two aspects of the DApp that are often overlooked, but which are integral to the success of a network.

Some DApps offer payment methods in app and others on the blockchain. As a result, there will be a range of different applications that aren’t adapters, such as Ethereum games, that were built on top of the Ethereum blockchain. Blockchain games have also been created using Ethereum’s smart contract language Solidity.