In the world of cryptocurrency, there are a wide variety of terms and processes that can be quite a confusing jumble. Learning each step of the process, especially the unique verbiage and definitions, can go a long way in understanding just what the crypto world is all about, inside and out.


You know the online world. We love an abbreviation. We don’t laugh out loud anymore. Who has time to type all of that? Instead, the Internet world has accepted LOL to save all those pesky extra letters when texting and typing online.

In that same vein, the decentralized application is a mouthful. And decentralized apps weren’t short enough for the net. Thus was born four simple letters: dApp.

When you are doing research and deciding how crypto fits into your world, remember, the Internet is full of shortened terms. Don’t be afraid of the terms.

Why Decentralize?

Decentralizing is a term you are likely familiar with outside of the cryptocurrency world. It means just what it sounds like: to spread things out, to not allow them all to be housed in one space, to create a broader network.

Decentralizing in Crypto

When it comes to crypto, the definition stands. Decentralized apps, or dApps, are digital programs (applications) that exist on a peer-to-peer (P2P, see another fun abbreviation) network. What does this mean?

Decentralizing means that a process is not stored on one central computer or database, but instead, the blockchain network is stored on a network of computers. It is spread out.

Ain’t No Stopping Us Now

The main purpose of decentralizing is to be sure there is not just one set of eyes on things. The core value of the crypto universe is that no one single banking institution or government entity is overseeing the system.

Instead, a wide series of individuals (on individual computers) is performing the work, scattered across the globe. Decentralized servers mean that no one institution has the power. In other words: the man isn’t keeping us down.

While there are clearly security and technical reasons behind decentralization, one of the values is rooted in the freedom it provides. The Internet loves a level of privacy, of self-governing, of the freedom to move about as you wish.

No one likes to be told what to do, and this style of operation allows for that freedom. No one is overseeing this network. No one individual has the power. There is a liberation in that. It is the power of the people.

Safety, Security, and an Upside

Another feature of decentralized apps is the security feature. dApps allow users to be safer, in addition to allowing for privacy. That level of safety is crucial for many of the users of decentralized applications.

Freedom of Speech

Many who favor the dApp style of operations also enjoy the freedom of speech the system allows for across the board. Without that single organization, government, or company owning the network, there is no final say in what can or cannot be allowed.

Consider an application such as Twitter. Twitter has owners. It has shareholders to answer to, and bottom lines to meet. It follows laws, both of its country’s government and of its own creation. It decides what stays and what goes.

However, if an application is created on the blockchain network that is operated on a peer-to-peer (P2P) system, no one is “the boss.” dApp networks mean, in short, there are no rules.

While that may sound like a chaotic, wild west to some, others find a great value in being allowed to speak their minds in any way they may choose. Supporters of dApps wave a Freedom of Speech flag. They don’t want what they have to say censored. They don’t want there to be an ability to block users, flag them, or have them removed for stating what they want, how they want.

Freedom to Develop

In addition, to be able to speak their minds, the users and creators of dApps also appreciate the ability to create as they see fit. Ethereum is one such platform that provides a space for creators to work.

Ethereum provides the infrastructure for the work to be done. It brings together users and makers, giving them an environment to connect. It is a space to experiment and explore, not to mention get your apps into the hands of the public.

The open access to networks can also add to who can develop. This user interfaces process is accessible. dApp development is open to more developers because of it.

The Speed of the Net

An added benefit of the decentralized application system is its speed. In the fast-paced Internet world, everyone wants everything yesterday. Things must be done at the speed of light, or faster.

Blockchain networks offer quick and easy access. This means apps can be deployed in a rapid space. These apps can be utilized across different industries, from financial institutions’ uses such as crypto to entertainment uses, such as gaming and social media.

Providing access to the masses, to create quick and efficient dApp drops? What’s not to love.

The Downside of dApp

No world is perfect. What goes up, must go down. And dApp networks are no exception. While there are many benefits, there are, of course, downsides.

Inability to Scale

One downfall of decentralized blockchain work is the dreaded inability to scale a good program. While the creation is made easier by an open, peer-to-peer network, making the dApp available to the masses is not so easy.

Scaling is tough, which is a large downside to the system. If only limited users get to enjoy it, is the dApp truly successful? Can it be made profitable?

Difficult to Make Changes

In an effort to make no one power in control of the decentralized network, and to avoid security risks, the other challenge the decentralized app world faces is the inability to make changes. For example, if someone creates a social media dApp, fans of the decentralized will rave that no one individual controls that app.

However, this means no one person, namely the creator deploying dApps, can go in and make an edit. Everything from basic description typos, to a glitch in the entire backend code running, having no centralized authority can be a pro and a con.

But one thing that definitely falls into the “con category” is an inability to make a change.

Is It User-Friendly?

While the system may be accessible it isn’t always easy. Someone trying to launch one dApp game-based application could face a number of challenges along the way. Some major stumbling blocks could be having no central authority to seek assistance from, ask questions to, or rely on along the way. It is another double-edged sword.

No centralized servers may be great for security, but certainly also takes away the safety net of a major corporate lawyer backing you. You better believe the centralized banking systems have some major lawyers having a developer’s back. If you make a misstep creating your decentralized credit service, you may have more on your plate than intended.

Smart Contracts

Like most things on the web, people want it efficient, they want it easy, and they want it now. One major tool in the processes of the dApp is that of the smart contract. Before your eyes glaze over with legal jargon nightmares, you’ll be happy to know, there is a reason they are called “smart.”

What Is a Smart Contract?

Users on all sides of a blockchain do not want to be strung up with red tape and complications. Who does? Instead, where automation is possible, it is beneficial to all parties involved to have an easy-to-use and fluid system. A smart contract helps to make this possible.

Smart contracts are programs stored on the blockchain. They are a set of predetermined conditions. If those conditions are met, the program is scheduled to automatically run. It can help take the feared steps, such as legal coverage or responsibilities off the table.

What Makes It “Smart” in the dApp World?

These contracts make it possible for all parties to cut out the guesswork. All parties involved understand the terms, and preset so that all are aware of the outcomes. If X occurs, Y will take place. If we all agree on what X and Y are, there is no need for any extra drama.

No intermediary is involved, and no time is wasted. Smart contracts allow for automation of processes, meaning fewer delays on the blockchain.

The Blockchain Network

What is the blockchain network and how does it relate to the smart contract or dApps? The blockchain network is an overall infrastructure. This system will provide a ledger, tracking the movements on said network. It also houses smart contracts.

Smart contracts use the blockchain network to distribute and generate transactions. Those transactions are then distributed to every user on the network. That transaction, thusly, is transcribed onto every user’s copy of the ledger.

Whether they are average end-users or administrators, all will get a predetermined outcome, preset by a smart contract.

A Group Effort

It is seldom that a user will go it alone completely on a blockchain network. Even a single entity is rare. Instead many groups or organizations may come together as a consortium to make a network. That group will then make a set of policies, to which every member of the consortium must agree ahead of time when creating the network itself.

Should a change be required to the set policies, again the consortium members must agree. This is typically called a modification policy.

The Bottom Line

Love them or hate them, the use of decentralized apps isn’t likely going away anytime soon. Web applications will continue to be developed. Whether traditional models prevail with centralized web servers, or the distributed network continues to add to its “pros column” remains to be seen.

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