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Decentralized Applications (dApps): Examples, Advantages, and Disadvantages

  • Bhumika Dutta
  • Apr 18, 2022
Decentralized Applications (dApps): Examples, Advantages, and Disadvantages title banner

Decentralization is being practiced thoroughly with the help of blockchain technology. If you think of an application that doesn't run on a single server but instead uses the excess processing power of thousands of computers around the world, and that can be controlled by business automation software that ensures that a function can only be performed if a specific parameter is met, that application is known as a decentralized application or distributed application. 


It should be noted, however, that decentralized applications do not have to run on a blockchain network; they can also run on a special type of peer-to-peer (P2P) network which is not a blockchain. Decentralized applications that run on a P2P network include Tor, BitTorrent, Popcorn Time, and BitMessage.


Let us simplify the concept for you and understand the meaning of decentralized applications together.


What are Decentralized applications?


Decentralized applications are software that interacts with the blockchain, which keeps track of the state of all network participants. Decentralized applications have the same user interface as any other website or mobile app today. A decentralized application's core logic is represented by a smart contract. 


Smart contracts are blockchain building blocks that process data from external sensors or events and assist the blockchain in managing the state of all network actors. They're usually used to automate the execution of an agreement so that all parties can be certain of the outcome right away, without the need for any intermediaries or time waste. They can also automate a workflow, starting the next step when certain conditions are met.


A decentralized application's frontend represents what you see, while the backend represents all of the business logic. One or more smart contracts interact with the underlying blockchain to represent this business logic. 


Decentralized storage networks like Swarm or IPFS could host the frontend as well as files like photos, videos, and audio. To render a webpage, traditional Web applications use HTML, CSS, javascript, or something similar. This page communicates with a centralized database that holds all of the information. 


The main difference between centralized and decentralized apps is that a traditional webpage will use an API to process your data and other necessary information stored on their servers to display it on the page. Because personalized data is stored on the service provider's server, user IDs and passwords are used for identification and authentication with low levels of security.

Image showing DApp that uses a blockchain with smart contracts

DApp that uses a blockchain with smart contracts (Source)

Decentralized vs Centralized applications:


A single company owns a centralized app. A centralized app's application software is stored on one or more company-controlled servers. You'll interact with the app as a user by downloading a copy of it and then sending and receiving data from the company's server.


A blockchain or peer-to-peer network of computers is used to run a decentralized app. Instead of relying on a central authority, it allows users to conduct transactions directly with one another. The user of a dApp will pay a cryptocurrency fee to the developer to download and use the program's source code. A smart contract is a type of source code that allows users to complete transactions without revealing personal information.


Top 7 dApps:


The first dApp was Bitcoin, which allowed anyone in the world to download a piece of open-source code, join a blockchain network, and verify transactions using a mining algorithm in exchange for digital currency. 


Small and large businesses use dApps to track and trace goods as they move around the world and to enable cross-border financial transactions without the need for an intermediary such as a central bank or clearinghouse, depending on the blockchain platform.


Here are the top dApps available in the market:


  1. Brave:


The web browser is recently giving huge competition to Chrome browsers in Brave, with almost 9 million active users. By putting consumers in the driver's seat, Brave is attempting to flip the online advertising model on its head. The app creates a new measure of value in the advertising world, where "consumer attention" is valued more than unverifiable views or clicks on a webpage. 


Brave has gotten more attention than most alternative browsers, partly because one of its co-founders was a key figure in the development of Mozilla's Firefox, and partly due to its unusual — some might say parasitical — business model. Brave Software, the browser's creator, is one of the more recent entrants in the browser wars, having previewed the browser in January 2016. Brendan Eich, the creator of JavaScript and a co-founder of Mozilla, co-founded the company after leaving Mozilla.


Brave is based on Chromium, an open-source project maintained by Google and others. Chrome's backend technologies, such as the Blink rendering engine and the V8 JavaScript engine, are also used by Brave.



  1. Golem:


Golem is a decentralized application (DApp) that aims to create a global market for unused computing power. The project's goal is to combine the power of PCs and data centers to create a rentable supercomputer that anyone can use anywhere in the world. Rather than relying on a central server farm, the initiative distributes the computational load among "Providers" who are willing to rent their computers for computing time. 


These suppliers can share their resources in exchange for GNT tokens. The project has a lot of potential because it allows for the decentralization of the rendering process, which is much faster and cheaper than centralized solutions.


  1. TRACEDonate:


The "donation sector" suffers from a lack of transparency and traceability when it comes to charitable giving. That's where TRACEDonate comes in with its identity management platform designed to enable transparent and traceable cross-border remittances and giving. 


The AID: Tech developed dApp connects charitable organizations, donors, and beneficiaries. According to Piekarska-Geater, the organization hopes to give donors peace of mind by ensuring that their funds are used for the intended purposes by those in need, such as purchasing groceries or utilities rather than alcohol.


The identity of the charitable organization and/or the individual to whom a donation is made is verified using blockchain. Because the funds are kept in a digital online wallet, the donor can track how the money is spent. Donors can also specify how the money should be spent, such as for medical assistance, food, or other emergency supplies.


Also Read | What are DAOs and How Do They Work?


  1. Circulor:


Circulor is one of the most popular decentralized supply chain traceability applications for the electric vehicle and electronics industries. It provides traceability to demonstrate that the raw materials used in the latter's production were ethically and sustainably sourced. Circulor is a track-and-trace platform that, among other things, allows users to secure deliveries, manage payments, and verify the origin of raw materials. Circulor is designed to handle real-world complexities.


Dapps have emerged with unique characteristics that allow stakeholders to invest in the development of decentralized applications, giving them the potential to become self-sustaining resources. 


DApps for a variety of purposes, such as payments, storage, cloud computing, and so on, are expected to eventually outnumber currently available traditional apps, based on their popularity. As the use of Blockchain becomes unavoidable, many existing methods will become obsolete. Although it may seem far-fetched now, services like banking will undoubtedly adopt Blockchain shortly and operate on trustless, self-sustaining, and decentralized networks. Large businesses can be seen striving in this direction to secure their place in the Blockchain ecosystem.



  1. Aragon:


Aragon is a major addition to the DApps series. The Ethereum Blockchain-based platform can be used to create and run decentralized organizations. Aragon is an open-source project that is managed by the Aragon Foundation. 


The project's goal is to eliminate the need for human commerce by allowing individuals to run entire businesses and organizations using Ethereum Blockchain. People can use the platform to create and manage decentralized autonomous organizations (DAOs). Aragon also contains ANT, the platform's token, which grants voting rights for future product development decisions. Any organization, business, non-profit, or foundation can use Aragon's DAO model. It is expected to increase the transparency and effectiveness of such organizations' governance.


Aragon also helps to eliminate unnecessary third parties by replacing them with Ethereum Blockchain-based smart contracts. By removing geographical barriers and bureaucracy, the program promises to serve as an incredibly simple digital jurisdiction for everyone.



  1. KYC-Chain:


Businesses use his app to confirm customer identities and streamline the onboarding process in a way that complies with KYC regulations. Through a partner sanctions and watchlists database that spans more than 240 countries, it can verify individuals as well as corporate and institutional business clients for criminal or prohibited activities in real-time.


KYC-Chain lets users store their certified identity details on-chain and control public access to their credentials by offering up public keys when access is needed, thanks to a self-sovereign identity dApp from partner company SelfKey. 


Users can pay for individual services such as accredited investor checks, crypto funds screening, ID verification, and document authentication through the dApp. Users can also check client crypto wallet spending against known-risk indicators and comply with anti-money laundering regulations using the service.


Also Read | What is Proof of Work in Crypto and How does it Work?


  1. Prism:


Prism is a ShapeShift initiative based on the Ethereum Blockchain. It is a decentralized and untrustworthy asset portfolio market. It creates bespoke market portfolio management tools using EDCCs, or executable distributed code contracts. Prism allows anyone to invest in other cryptos and define the holding proportion they want. 


Prism does away with the need for third parties and the time-consuming process of storing and maintaining multiple private keys and wallets. There is no need to keep track of multiple exchange passwords and keys because the project is built on Ethereum smart contracts. It also has an interactive user interface that shows a person's investment portfolio in real-time and tracks everything.


Advantages of decentralized applications:


Here are some of the advantages of decentralized apps:


  1. The ability of dApps to protect user privacy is at the heart of the program. Users of decentralized apps do not have to submit personal information to use the app's features.


  1. Smart contracts are used in DApps to complete transactions between two anonymous parties without relying on a central authority.

  2. dApps can be developed as alternative social media platforms, according to proponents of free speech. Because no single participant on the blockchain can delete or block messages from being posted, a decentralized social media platform would be resistant to censorship.


  1. Ethereum is a versatile platform for developing new dApps, allowing developers to focus their efforts on finding new and innovative uses for digital applications. This could allow dApps to be deployed quickly in a variety of industries, such as banking and finance, gaming, social media, and online shopping.


Also Read | Everything about Distributed Ledger Technology (DLT)


Disadvantages of Decentralized applications:


Here are the disadvantages of decentralized applications:


  • Because the use of decentralized apps is still in its early stages, it is experimental and subject to a variety of issues and unknowns. There are concerns about the applications' ability to scale effectively, particularly if an app requires a lot of computations and overloads a network, causing network congestion.


  • Another concern is the ability to create a user-friendly interface. Most users of traditional centralized institution-developed apps have an expectation of ease of use that encourages them to use and interact with the app. To persuade people to switch to dApps, developers will need to create an end-user experience and level of performance that rivals that of well-known and established programs.


  • Another limitation of dApps is the difficulty of making code changes. A dApp will almost certainly require ongoing changes after it has been deployed, either to improve it or to fix bugs or security risks. Developers may find it difficult to make necessary updates to dApps, according to Ethereum, because the data and code published to the blockchain are difficult to change.

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