Crypto 101: Dapps

The name for apps which run on the blockchain might not be very surprising, as it is “Decentralized Applications”, or Dapps. These applications represent a shift away from traditional centralized systems, offering more transparency, security, and accessibility.. In this blog post, we’ll give you a short introduction into Dapps and what their characteristics are.

What Are Crypto Dapps?

Decentralized Applications, or DApps, are software applications built on blockchain networks, typically utilizing smart contracts to facilitate their operations. Most Dapps run on Ethereum.
You can view them as an app in the Playstore, which you can install on your phone. Only instead of running on IOS (Apple) or Android, it runs on the blockchain. You don’t always have to install any software, but rather you login with your wallet. Of course some application might require the installation of software.

Key Characteristics of Crypto Dapps:

  1. Open Source: Most Dapps are open-source, allowing anyone to view, audit, and contribute to their codebase.
  2. Decentralized: Dapps are hosted on blockchain networks, distributing data and control across a network of nodes rather than relying on a single central server.
  3. Trustless: Dapps rely on blockchain’s trustless nature, meaning that users don’t need to trust a central authority or intermediaries. In reality this is not always the case, since there is still a company behind it.
  4. Cryptocurrency Integration: Dapps often use cryptocurrencies as a native token for transactions within the application, or even to earn with. You will use the native token of the network to approve actions and in some cases you earn for interaction with the Dapp, such as playing or or completing tasks.

Examples of Dapps:
There are a broad variety of usecases for dapps. Like apps can have different usecases as well. Earlier we arlready stated that almost all applications are dapps. So let’s take a look at some different areas for which dapps can be made.

  1. Decentralized Finance (De-Fi) Applications: De-Fi dapps offer financial services like lending, borrowing, and trading without the need for traditional banks or intermediaries. Examples include Aave, Compound, and Uniswap.
  2. Non-Fungible Token (NFT) Marketplaces: NFT dapps allow users to buy, sell, and trade unique digital assets like digital art and collectibles. Popular examples include OpenSea, Blur and Rarible.
  3. Blockchain Games: Dapps like Axie Infinity and CryptoKitties enable players to own and trade in-game assets as NFTs, creating true ownership in virtual worlds. This allows for buying and selling of assets for example. Read more about this on our NFT and gaming section.
  4. Social Media: Some dapps aim to decentralize social media platforms, giving users control over their data and content. Meaning you can monitize your social media account. For example
  5. Supply Chain Management: Dapps are also used in supply chain management to increase transparency and traceability of products. VeChain is a prominent example.

Challenges and Downsides
Dapps do have some issues which they can run into.

  1. Scalability: Blockchain networks need to address scalability issues to handle a high volume of transactions.
  2. User Experience: Some Dapps have complex user interfaces, making them less user-friendly for newcomers.
  3. Regulatory Concerns: DApps must navigate regulatory landscapes, especially in regions with strict crypto regulations.