Peculiarities of the Decentralized Applications

1. Peculiarities of the Decentralized Applications

2. Lately, there has been a buzz going around the DApp - an acronym for “Decentralized Application”- a P2P type of network that is governed by members all around the world.

3. Although the concept of DApps is still quite nascent, it has already obtained some core characteristics unique to its nature: • Open source: the worldwide availability of the main source code; • Decentralization: the utilization of the blockchain/cryptographic technology; • Incentivization: the provision of the cryptographic tokens/digital asset to the contributors; • Protocol: the tokens’ generation combined with the consensus mechanism.

4. The DApps development process includes the following stages • The publishment of the white paper describing DApps’ features • The establishment of the initial token sale • The distribution of the ownership stake • The funds' investment and the actual launch

5. At the moment there are two ways in which DApps reward network participants: Work proof The proof of work gives awards on the piecework basis. For example, miner’s reward is given in the form of tokens depending on the number of processed transactions. Stake proof The proof of stake ensures that the participants have the block voting rights based on their stake in the network.

6. DApps have the following pros and cons: PROS • Zero control authority • A high level of database security • Resistant to hacker attacks • No system failures • Ease of payments CONS • Slow transaction processing speed • Less efficiency of the blockchains when growing bigger • High energy costs

7. Examples of the successful DApps projects: • Golem It is essentially a platform that uses the distributed cloud to make computer power accessible to everyone. Users from the Golem network have the ability to give tasks to the computer machines, thus making the DApp a very innovative sharing and pooling resource. • Augur It is a cryptocurrency aimed at making market predictions, which will ultimately lead to the creation of a huge blockchain network of accurate forecasts used across all the industries. • Status It is a mobile operating system available on Android and iOS allowing smartphone users to use DApps. With the help of the built-in messenger, they can stay connected, send payments as well as enter into a smart contract.

8. DApps’ industries: • Blockchain • Internet of Things (IoT) • Banking & Finance • Artificial Intelligence • Virtual Reality • Social Media • Travel • Government • Medicine Even David Johnston, CEO of the DApp Fund, predicts the following in his white paper: “These decentralized applications will someday surpass the world’s largest software corporations in utility, user-base, and network valuation due to their superior incentivization structure, flexibility, transparency, resiliency, and distributed nature.”

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