What is a DAPP?
Decentralized applications, also called DApps, run on peer to peer network which means that it is not governed or deployed by a single entity. DApps started being created and presented on the Ethereum blockchain and now are present on other Blockchains too such as EOS and NEO. DApps have unique characteristics which include:
- Being Open Source so that the code of the application is available to everyone.
- Uses Blockchain technology to ensure decentralization.
- It is fueled monetarily by cryptocurrency tokens .
- Have an inbuilt system of generating tokens.
Do DApps Have A Future?
Most DApps are fundamentally flawed. There isn’t much of a need for dApps presently as many don’t have real-world use cases.
DApps claim to be owned and run by the community, however, in reality, it fails to be an application which is different and unique.
Not Decentralized – Dapps are created by a development team which makes major decisions about the application along with fixing bugs. Thus this development team is the central point of failure. A completely decentralized application should be built, controlled and fixed by the community of the application, however dApps fail to establish this criteria.
Hit and Run – The team behind the dApp raises funds for the application through Initial Coin Offerings (ICO). However what many don’t realize is the founders of these dApps may trick people into investing in the dApp token even though there is no working prototype in place. This may result in the theft or misuse of the funds raised during the ICO.
Expensive – Certain DApps sound interesting such as Augur which is a prediction based platform built on Ethereum. It, however, has only 40-50 daily users due to the expensive structure of paying to create a smart contract you want to place and get it on the blockchain. Centralized applications are usually free and so there is no real incentive for a person to switch to dApps.
Trustworthiness – In reality, centralized applications are already trustworthy enough, hence there is no point in gaining trust through a DApp. Every application is running a business and so to reap the long-term benefits it needs to create trust.
Hard to Change – Since dApps use the underlying technology of Blockchain, the data on it is immutable. Since dApps are applications, constant updates are needed to ensure it stays up to date with technology and improvements are made to increase the usage of it. Thus, in the long run, dApps may face being outdated and lose out on the competitive application market.
Present Situation of DApps
Decentralization sounds exquisite, however, most of the DApps are trying to solve issues that are better equipped in a centralized application.
As Kevin Rooke, a Canadian cryptocurrency analyst/researcher pointed out in a tweet on 27th August 2018 that the Ethereum and EOS blockchains collectively hosted only eight DApps that are used daily by more than 300 users.
dApps with more than 300 daily active users…
Most popular dApp by weekly tx volume…
EOS: EOS Bet ($18.1M)
Ethereum: IDEX ($7.3M)
Grab your popcorn folks, we've got another crypto clash unfolding ? pic.twitter.com/wBSZYjkd0C
— Kevin Rooke (@kerooke) August 27, 2018