The overall business environment and the financial sector is built up in a centralized structure that provides proper order and standardization to the processes and transactions. With a reliable system in place which has been working for decades and even centuries, why is there a need to change it, especially when it comes to adding decentralized applications known as DApps?
Yet, that’s what’s happening now as the list of the advantages linked to the decentralized model continues to increase and the applications appear which includes Ethereum.
A whitepaper regarding the subject of decentralized applications, known as DApps, has provided several reasons why it certainly makes a lot of sense to create them, given their ability to be transparent, flexible, and resilient.
What are DApps?
Just imagine your car working away, taking passengers from one place to another while you are at work. Imagine your computer using its space capacity to serve people and businesses all over the world. Just think of that exciting opportunity where you are getting paid for browsing the web while taking ownership of your invaluable attention. A world like that is definitely not far away.
Taking a paradigm shift in the way in which we look at software models is fast approaching. When Bitcoin, the first ever cryptocurrency, pushed us to reassess the definition of SoV or Store of Value, it has also revealed to us a look at the future. It’s the kind of world that runs on decentralized applications, or DApps. DApps are distributed, transparent, incentivized, and resilient applications that have proven themselves to the world by recreating the technological landscape.
The Birth of Decentralized Applications
Since the concept of the decentralized applications is still in its early stage, there might soon be a clear definition of what exactly DApp is.
However, there are some noticeable common features that you’ll encounter with DApps:
- Open Source – Ideally, DApp must be governed by autonomy and any change done should be decided upon by the consensus or most of the users. The code base must be available for inspection.
- Decentralized – The entire records of the application’s operations should be kept in a public and decentralized blockchain to avoid centralization pitfalls.
- Incentivized – Validators of the blockchain technology should be incentivized and rewarded accordingly with cryptographic tokens.
- Protocol – The community of applications must agree on a particular cryptographic algorithm to show proof of value. For instance, Bitcoin utilizes PoW or Proof of Work while Ethereum is also using PoW but with plans of using a hybrid of Proof of Stake (PoS) and PoW in the future.
If we’re going to base it by definition stated above, the first DApp was, in fact, the Bitcoin itself. Bitcoin, as you know, is an implemented blockchain solution that was developed as a result of the problems that revolve around censorship and centralization. One would say that Bitcoin is a kind of self-sustaining public ledger, which allows for the efficient processing of transactions without the involvement of centralized authorities and intermediaries.
How Does a DApp Work?
DApps work by implementing the entire four criteria discussed in the first section. What this means is that DApp is a type of open-source software that’s implemented on decentralized Blockchain fueled by tokens generated by the use of a particular protocol or algorithm.
As an open-source application, DApp is a truly decentralized system since everyone would be able to see it and contribute codes. The system also quickens the process for the scalability of product development when it comes to the quantity and the quality.
Decentralizing the app with the use of a blockchain would be the next step. The blockchain functions as a permanent ledger of transactions that everyone can access at any time.
Finally, tokens are used to add transactions or records in these ledgers. The tokens are pre-mined or mined with the use of different protocols or algorithms.
Currently, some of the popular protocols used are PoW, which is what Bitcoin uses, and PoS or proof of stake, which is what DASH uses. These protocols are used to reach an agreement or consensus between the users of a certain DApp.
- POW or Proof-of-Work requires miners to mine blocks and get rewards. Since mining blocks and adding them into the chain is an energy-consuming process, this will also help to keep the blockchain stay secure.
- POS or Proof-of-Stake entails the holding and staking of tokens to be eligible for master node. This also helps to keep the blockchain and transactions secure.
How to Build a DApp
The process of creating decentralized apps is not as straightforward as creating a centralized software or application.
It comes with its own sequential steps and timeframes.
- Publish a whitepaper with a roadmap.
Publishing a whitepaper that explains the features, concepts, and technicalities of DApp is necessary and is in fact, the first step. The process will allow for feedback to come in coming from the community, making it a real DApp.
If you’re going to add the roadmap or the plan of DApp, this will serve as a positive selling point. DApps that have solid roadmaps are often ahead of its peers. This is why if you want your DApp to be successful, you should be able to come up with a solid roadmap for the open market.
Also, you should also highlight the history and capabilities of the top developers of your project to earn the trust of the community.
- Launch an ICO
ICO refers to Initial Coin Offerings, and these are often the starting points of today’s startups, including DApps. When doing a coin offering, you will sell your crypto coins to fuel your DApp. These crypto coins will also serve as a means to gather enough crowdfunding for the project.
To start with, you must announce and explain all the aspects involved in how your DApp’s ICO works. Furthermore, you must also share with the interested community members if your DApp is going to have pre-mined tokens or if there’s a mining mechanism in place.
When it comes to building trust, you must be able to highlight how much percentage will be allocated to the marketing, development, and other important allocations. It’s necessary that you’re transparent with the allocations of tokens since a lot of the previous projects have their credibility ruined for lack of transparency.
- Launch the Product
Now it’s time to launch the product along with its detailed release including notes and maintenance plans on how you can keep the community involved.
You should continue to maintain and modify the product as needed for it to be suitable to your roadmap, vision, and the community.
Successful DApps Based on the Ethereum Platform
The goal of the Golem project is to build the first international market for idle computer power. With an incredible market cap of $220 million, Golem is scheduled to release its first version, the Brass Golem, in May. The Brass Golem will undergo a test to determine its ability to deal with CGI rendering, which is its first case. If it’s going to turn out successful, CGI artists could rent computing resources from some users allowing them to render images faster. Furthermore, an idle machine is also capable of accepting tasks from other users. Frictionless pooling and sharing of resources will now become a reality.
Augur wants to converge the concept of prediction markets to the power of a decentralized network in creating a forecasting tool that can be used for potential trading gains. With a market cap of more than $200 million, Augur is still on Beta test as of the moment. Eventually, it will start to feed real-world truths to other applications, and it will soon become the blockchain of facts.
The protocol of Melonport is a type of blockchain protocol used in digital asset management. It allows participants to be able to set up and invest in digital asset management strategies in a competitive and open way. With the help of the blockchain technology, costs and time will be drastically reduced. By creating a visible and auditable track record, Melonport was able to create a never before seen competitive environment in the world of asset management.
Status aims to transform your mobile device into a light client node within the Ethereum network, allowing you to access the entire ecosystem of the Ethereum from anywhere easily. In their messenger system, users will be able to send smart contracts and make payment to each other. Server downtime will no longer be a problem since the app runs on a peer-to-peer protocol.
In a world where a lot of consumers tend to struggle with the control of privacy and attention, Brave’s value proposition is somewhat unique. A whopping 60% of the web page loading time is often caused by the underlying ad technology. Having a brave browser can help to make web browsing faster and safer by keeping you protected against third-party tracking. Also, if you decide to support content creators and enable ads, you will be rewarded monetarily with tokens. This allows an unprecedented level of control among its end users.
This is another ambitious project, which aims to disintermediate the human trade, allowing you to manage an organization by using the blockchain. By removing the paperwork and borders, Aragon Network aims to function as a digital jurisdiction that’s extremely convenient for everybody to operate on. DApp aims to use the blockchain technology in its niche and to take over in their respective industries, whether it’s in technology, governance or investment.
Now that you’re aware of the steps on how to launch a DApp, you may want to give it a shot. But what if you aren’t a creative genius and can’t think of a brilliant idea? Would you still be able to participate? The answer is yes, you can, and that’s through DApps ICOs.
DApps’ ICOs and Tokens
As mentioned above, ICO refers to “Initial Coin Offering,” and it’s the process where DApp’s tokens are sold for the first time in exchange for other currencies. These tokens are crypto coins that are made for the main purpose of selling within an ICO and will be used in funding the development of the product and for fueling DApp’s operations.
For instance, ETH represents the crypto fuel needed to run smart contracts in the Ethereum platform.
How to Participate in ICOs
If you want to participate in the DApps token and get into an ICO, here are the steps you should follow:
- Stay Updated – You should follow the latest news about crypto and DApps. You can join Telegram or Slack channels of a particular ICO and follow them on their social media sites.
- Prepare a Wallet – Read through the ICO details thoroughly and understand the technical requirements such as which wallet must be used for the ICO, etc. You must also check which currency to use when buying your tokens, whether it’s ETH, BTC, USD, etc.
- Time Factor – Different ICOs often list different timings depending on the time zones. You must check your time zone and make sure that you’re on time. There have been some ICOs in the past that finished in only less than a few minutes, so you have to be punctual and quick.
One important thing to note is that not all the ICOs are really worth it. Some might just be a scam that looks really good on paper, so you have to be careful.
So, how are you going to judge if a particular DApp ICO is a scam?
Here are some suggestions:
- Check if the DApp intends to solve real-life problems.
- Check the history and portfolio of the development team involved in the project.
- Read the whitepaper and check its technical feasibility.
- Join forums and ask technical experts for their opinion about a particular DApp.
- Take the time to check their development roadmap.
- Find out if they have a working prototype demo for the DApp.
So far, these are the only preconditions, but we strongly recommend doing your own research and exercise due diligence.
The Future of DApps
What we’re experiencing now is already a preview of a decentralized world that’s expected to come in full swing very soon. In fact, even David Johnston, the CEO of DApp Fund, has predicted this in the whitepaper. According to him, the decentralized applications will soon surpass the world’s biggest software corporations regarding user base, utility, and network valuation, thanks to their excellent structure for incentivization, transparency, resiliency, flexibility, and distributed nature.