Technology is evolving rapidly over the years. This evolution has recently given us blockchain and cryptocurrency breakthroughs. And now, another step forward in the evolution of technology is happening through DApp/decentralized application. Even though DApp is not part of the mainstream vocabulary right now, in the coming days, it is expected to revolutionize the way the world conceives apps. The DApps market cap is about to cross $350 billion by 2027. In the near future, it will be important to understand what DApp is and how your business can leverage the technology.
DApp (decentralized application) is open-source decentralized software that works on a blockchain network. DApp is built on blockchain platforms like Ethereum that execute the application code securely. Though there are many other platforms like Avalanche, Solana, and Ronin, Ethereum is the most widely used DApp development platform .
Two important aspects of DApps are secure transactions and high fault tolerance. If the blockchain network is up and running, any other failure in the system will not impact the DApp functionality. To understand DApp, you first need to know the fundamental technologies behind DApp like blockchain, smart contract, and Solidity. To operate DApps, a human interface is not required. It uses tokens to represent the ownership of assets and collectibles.
A blockchain is a shared database on a decentralized network. Data is stored in digital format and it allows decentralized and secure transactions. Cryptocurrencies benefit from blockchain in terms of security and decentralized transactions.
Blockchain does not require a third party for authentication. It uses a publicly distributed shared ledger where all nodes follow the protocol and communicate with each other to validate a new block. This distributed digital ledger can hold data of any form. Blockchain not just tracks cryptocurrency but also tracks ownership of NFTs and smart contracts.
The decentralized nature, where blockchain databases are stored over multiple nodes over a network, makes blockchain’s unique. A centralized database is prone to security issues and may not provide complete fault tolerance. Blockchain on the other hand uses multiple computers over the network and numerous copies of the database are stored in them.
Blockchain technology is safe by design and this distributed system offers high fault tolerance. In the event of some malfunction or node failure, the system continues to work. DApp development is connected to digital applications on a blockchain for social media, gaming, and banking.
So, DApp (decentralized application) in the blockchain is an application or game that exists on a peer-to-peer network. Application development is not controlled by a single entity. There are many Ethereum-based DApp sectors but not limited to social media, gaming, retail, and banking. DApps have gained popularity and it can be observed from the number of applications created so far.
A novice may not understand the difference between a generic app and a decentralized app. This is primarily because the difference is found in the blockchain protocol. Let’s learn more about the specifics and key features of DApps:
Operational transactions need to be kept on the decentralized blockchain network. Instead of downloading the app, a user must pay a certain amount of digital currency to get the source code. Users must use private and public keys to connect and work. In a nutshell, being on a Blockchain that is maintained and administered by many users, it is not subject to being under the control of an individual.
A DApp is not managed or governed by a single entity. The underlying code should be readily available for review by others. This transparency brings trust since blockchain records are easily available for audit.
As proof of value, DApp must create tokens that can be distributed over the network as rewards. And this is one of the motivations behind DApp development.
Underlying protocol to provide proof of value via cryptographic algorithm must be agreed upon by the stakeholders. At present Proof of work is used as a consensus protocol by both Bitcoin and Ethereum.
DApp certainly has some benefits, and these include:
The best thing about DApp is that no one can be blocked from using the app. No government entity or individual has control over the network. In short, you can compare it with the existing social media. You can post anything legit, and no one can stop you from it.
One of the best things about DApp is that it will not go down if your blockchain platform is up and running. If some part of the system fails or a node goes down, your application will continue to work normally. This high fault tolerance is due to the blockchain technology that ensures zero downtime.
Most of the DApps require only a digital wallet, and public and private token (Ethereum login) to connect to the application. You don’t have to fill the lengthy forms. In a nutshell, you don’t have to reveal your identity. Anonymity not just reduces the work overhead but also secures your transactions.
One of the critical challenges that we face in the internet world is data safety. You might have seen many fraudulent activities where end-user data was compromised. Blockchain platform uses cryptography to secure the data and hackers cannot penetrate it. Moreover, you can verify the transactions on the public blockchain as well. This entrusts reliability and information & data exchange smoothly.
This is yet another key feature that makes DApp desirable. To purchase NFTs directly from the DApp developer or marketplace, DApp has an inbuilt payments system. FUSD is network-wide and supported by payment providers and wallets. Moreover, FUSD providers handle the compliance and regulatory requirements as well.
Decentralized applications have some shortcomings too. So, let’s quickly investigate what are the disadvantages associated with DApps:
If there is a bug in the system and a patch update must be rolled out, it becomes a difficult task. Since data published on the blockchain cannot be altered, it’s difficult to maintain DApps if issues are found after the deployment. Also, if any bugs are fixed, then all the copies need to be updated in the network.
Validation of the users is done in most centralized applications and this is possible because of the central nature and control from a single authority. But in the case of DApps, there is no central authority responsible for KYC validation.
Because of the complex protocols, the entire DApp must be planned from the beginning considering the scale. DApp cannot be scaled like centralized applications where a system can be balanced according to the load.
A Blockchain network can be overloaded if one of the DApp is using excessive computational resources. This results in network lag and the payment processing becomes slow.
To fetch third-party data, the centralized application system has a third-party application programming interface. This is not the case in DApp, since it does not have such a large ecosystem of third-party APIs.
The process of developing DApp begins with a whitepaper and prototype. The token sale is followed by an initial coin offering before implementation and launch. Now let’s take a sneak peek into higher-level details.
A DApp needs to follow a precise theoretical basis and the only way to know that is to learn Ethereum. It must operate autonomously without any central control and must be open source. This means no single entity can own most of the crypto tokens. Any changes to a DApp should be approved by all in the community. The underlying code must contain smart contracts and run on the blockchain. DApp must use a cryptographic algorithm to generate crypto tokens and data should be stored in the blockchain. So, the very first and non-negotiable step for a developer is to learn the Ethereum blockchain.
The next step for a developer is to choose a blockchain tool. For beginners, “testprc” is one of the best clients. It is extremely easy to use and offers a command-line interface that can be used to specify the block interval.
The next step is to get a tool to communicate with the blockchain. One of the most used and easy to use tools is web3.js. It is easy to install and has some specific instructions to configure and communicate with the blockchain.
You need to gear up to learn Solidity which is the exclusive Ethereum language to code smart contracts. Inspired by Java, C++, Python, and JavaScript, this feature-loaded language was designed exclusively for coding smart contracts. This learning is a must for a DApp developer since the backend must contain smart contracts. The front end can be designed using any other language. Vyper, Yul, and DAML are a few more languages to code smart contracts.
While coding smart contracts, a developer must follow certain instructions for an effective backend program. Keep storage and computing power to a minimum. Why? – Because smart contract execution requires “Gas” that is chargeable. Gas measures computing power and you must pay a certain number of crypto tokens. So, on Ethereum, you must pay Ether to execute smart contracts. Simple the computing logic, the less the gas required. Smart contract code should not be complex. There is a higher probability of errors if your code is complex. Moreover, the result of a smart contract is unalterable. Hence, it is imperative to write simple and error-free code.
Next, you need to deploy your smart contract. Truffle is a recommended tool that offers the following benefits:
Smart contracts must be called in hexadecimal strings. ABI (Application Binary Interface) libraries help in invoking smart contracts. Now to run smart contracts, the developer must pay in Ether and for this, they need to create an Ethereum account. It is easy to pair and manage public and private keys using the “eth-light wallet”. The configuration file must be updated with the key details. The private key must not be shared with anyone or on a public forum.
The last step in DApp development is to buy some Ether; store in the “eth-light wallet” and transaction. There are 2 choices:
Now when you know how to build DApp, what about the development cost? Regrettably, the development cost is not straightforward and multiple factors could impact the overall cost. Below are four major factors:
A project’s complexity drives its cost. It is one of the biggest factors that could affect the overall development process. Blockchain, APIs, and technology stack determine the cost of your project. A low complexity distributed application created around existing cryptocurrency will cost less compared to development from scratch. That will be more expensive and intricate.
The cost of the development is dependent on the type of industry for which DApp is created. Each zone is unique and has its challenges and sophistication. Compliance requirements and a large user set are some of the things that vary from industry to industry and impact the overall cost of DApp. A banking DApp may have high compliance requirements and may require multiple users to connect at the same time, eventually leading to a higher cost.
There are three types of DApp, and their cost of development varies based on the blockchain.
Last but not the least, labor cost makes a massive difference in DApp development costs. Hiring a DApp developer is challenging. Based on the location, team size, and expertise, fees will be charged. Other costs related to recruitment, HR, insurance, operations, and holidays must be counted. So, before you begin your DApp development, you need to consider labor costs.
Just like centralized applications, DApp has its own set of limitations. But there are ways and processes to handle them:
Once data is published on the blockchain, it is not easy to alter the data. Hence, maintaining such applications becomes a nightmare for some organizations. If at all there are security concerns or bugs in the initial release, a developer will find it difficult to roll out the bug fixes. Fortunately, DApp development platforms do have a team of experts who investigate such issues.
Many applications offer best in class ergonomic experience and numerous benefits. But are they reasonable to comply with user demands? Complex features are difficult to navigate, and this leads to unhappy customers. However, the new Gen DApp development is addressing these issues and developing a friendly user interface.
An overloaded blockchain network may slow down due to excessive computation since resource utilization is high. This slows down payment processing. However, DApp development solutions provide you with guidance on how to handle such issues.
Before you plan to make your own DApp, isn’t it natural that you might be curious to find out what already exists in the decentralized platform? With a wide range of decentralized applications, there are numerous use cases. Here are some of the popular use cases you must know:
Play-to-earn model games has stirred a new wave of rage. Players can earn money while they play. Most of the games provide a limited period of free trial. You can use earned money to buy in-game assets or port them to other platforms.
DApps are going to see a surge soon. Applications especially gaming and art will see users purchase collectibles and port them across the platforms. Crypto kitties are one popular collectible DApp and many new organizations are looking forward to creating collectibles.
Crypto investment is yet another use case that is striving to normalize global economic issues. Real-world information is getting linked with smart contracts and applications identical to ‘Chain link’ are working hard to materialize this.
Decentralized applications are expected to remove brokers from real business and will provide a direct seamless real estate experience to the users.
Augur, Ether Tweet, Golem, and Melon Port are some of the decentralized applications with millions of dollars of market cap. As the cryptocurrency evolves, DApps will continue to grow and will play an important part not just within the community but amongst a larger audience.
The evolution of decentralized applications and blockchain, in the coming years, is inevitable. Many sectors are already looking forward to adopting blockchain to operate in a self-sustaining decentralized network. They will definitely seize the coming DApp revolution. If you like to read such articles on evolving technologies and the gaming field, browse through the blog section of Juego Studios.
If you have an idea to create a decentralized gaming application, consider Juego Studios. Juego Studios is an innovative company that specializes in dApps development apart from game development services, blockchain, VR, NFT game development services and more. To build secure, scalable, and stable blockchain based applications, consider Juego Studios. Get an overview of Juego Studios’ dApps development here.
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