What is Dapp? | How does it work?

What is Dapp? | How does it work?

(This article has been translated with google translate.)

Many large businesses today avoid using centralized applications. Restrictions, customization problems and vulnerabilities in centralized applications are rapidly pushing businesses to look for new technologies. For this reason, decentralized applications are becoming more and more preferred day by day. Dapp is a special term for decentralized applications. Businesses have to allocate very high budgets to central systems in order to meet and interact with their target audiences. Businesses that want to find a way to do this avoid paying money to intermediary companies by investing in decentralized applications. Thanks to this system, you can reach a wide audience without any intermediaries and carry out the digital activities of your business reliably and completely under your control.

What is Dapp?

Dapp is a business model in which a company collects, stores and manages large amounts of data and then makes it available to external partners and third-party systems. For example, a company may collect data about the purchasing habits of its target audiences over time, then transfer that data to a partner company. So they can use it to determine their business strategy. In this way, the idea of DaaP is a very effective process. Because it positions data as a commodity rather than a piece of software or hardware.

Decentralized applications, also known as dapps, provide services similar to those offered by typical consumer applications. But they use blockchain technology to give users more control over their data, eliminating the need for centralized intermediaries to manage data. Thus, they make the service "decentralized".

Digital applications are ubiquitous in today's world. Consumers use apps to send emails, pay for a purchase, find dates, and network countless transactions. Under traditional control and ownership models, consumers often have to hand over personal data to the service provider. With a decentralized application, users theoretically have more control over their finances and personal data. Because they don't have to rely on others to store and secure information. For this, the Dapp system stands out as a very functional system.

How Does Dapp Work?

Developed on the basis of Ethereum, Dapps uses blockchain technology in the background to directly connect users. Blockchains give a chance to link together a distributed system where each user has a copy of the records. With blockchains in the background, users do not have to give information to a third party. This means they don't have to relinquish control of their data to someone else.

Central systems tend to record and control the data entering and leaving their networks. For example, financial institutions can stop sending transactions and Twitter can delete tweets from its platform. Dapps involve users in the control process and make such actions difficult, if not impossible.

There is no agreed-upon definition of a dapp as it is a relatively new concept. But the key features of a dapp are:

  • Can be improved: The code is publicly available for anyone to view, copy, and audit.
  • Decentralized: Dapps has no one responsible. Therefore, no central authority can prevent users from doing what they want in the app.
  • It uses blockchain technology: Since there is no centralized management, a system is needed to keep the application alive. Dapps use a basic blockchain (like Ethereum) to coordinate instead of a centralized entity.
  • Smart contracts are created: Decentralized applications use smart contracts that automatically enforce certain rules.
  • It is global: The aim is that anyone in the world can publish or use these dapps.

What are the Dapp Advantages?

Dapps has several exciting aspects:

  • It is censorship-proof: It is very difficult for governments or powerful individuals to control the network, as there is no single point of administration.
  • No downtime: Relying decentralized ensures that dapps continue to run even if individual computers or parts of the network go down.
  • It is blockchain-based: Since they are made using smart contracts, they can easily integrate cryptocurrencies into the core functions of the dapp.
  • It is open source: Open source dapps encourage the development of the dapp ecosystem. It also enables developers to create better dapps with more useful functions.

What Are the Disadvantages of Dapps?

While Dapps promises to solve many problems faced by regular apps, they also have some drawbacks.

  • Hackable: Since many dapps run on open source smart contracts, hackers have the opportunity to review the code and scrutinize networks looking for weaknesses. This led to a series of attacks on popular dapps.
  • Poor User Experience: Many dapps have poor UIs that drive the user away. However, this feature disappears over time.
  • User Restricted: As with many Web 2.0 applications, the more users a dapp has, the more effective the network will be at delivering these services. This is often called the network effect. Dapp may have low user counts. This can make them less interactive. Also, since a dapp's security often depends on users, it can make them less secure.

Why is Dapp Important?

For a business or business partners dapp is essential. Because it focuses on collecting as much raw data as possible, not on its analysis. For a Daap model to be successful, the host company must collect and continue to collect large amounts of data. Businesses that pay for access to this data can then use this data to make decisions without having to do the heavy lifting of collecting, storing and managing the database themselves.

Daap focuses on providing a deeper understanding of customer habits and historical trends to multiple businesses in the same market. This lays the foundation for more common data-driven, customer-centric business decisions. However, it has always stood out as a key player in Daap's new customer acquisition trends, despite business concerns regarding competition and privacy best practices.

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