Module 9: Decentralised Applications (dApps)
This module dives into how decentralised applications function on blockchain networks, their wide-ranging applications, and their pivotal role in shaping the future of digital interactions and transactions.
What are decentralised applications (dApps)?
Layer 0s, Layer 1s, and Layer 2s (see Module 5) are the base layers that protocols (applications) are built on top of. The application layer is what we actually use in crypto. Think of the internet as an L1 and Instagram as one of the apps built on the internet. A decentralised application or DApp is like a traditional application. However, instead of using a processor, dApps use blockchain infrastructure to compute data.There’s a wide range of DApps with various use cases. These include gaming, crypto wallets, DeFi apps, social media and more. Popular examples are:
- PancakeSwap (decentralised exchange)
- OpenSea (NFT marketplace)
dApps vs Apps
Open-source: dApps are usually open-source. This means their code is publicly available, and any user can verify it. In contrast, the software of traditional web apps is stored on servers controlled by the company/creator.Decentralised: As they run on blockchain networks, dApps are decentralised and controlled by validators or nodes. They are secured by cryptographic technology. Traditional apps are generally run by a centralised server.
Technical issues and attacks: dApps are much less vulnerable to technical issues and attacks when compared to traditional, centralised applications. If a single, centralised server is compromised, the whole network could be taken down. (However, dApps are not immune to hacks/exploits).
Censorship: dApps are also more resistant to censorship compared to centralised apps. It’s extremely hard for governments or other powerful parties to stop the network or block users from interacting with a dApp.
Mainnet v Testnet
Mainnet refers to a blockchain or protocol that has passed the testing phase. The full version has been deployed. (Note there will almost always still be iterations, updates, and improvements in the future).‘Testnet, as the word suggests, refers to a blockchain or protocol currently not fully developed or requires trailing before going live. This typically means large amounts of user funds at risk. A testnet is a working prototype. It’s used by programmers and developers to test and troubleshoot the blockchain before it’s ready for the mainnet launch.
We've seen how dApps offer a more secure, transparent, and user-empowered alternative to traditional applications. From finance to gaming, the potential for dApps is vast and ever-evolving.
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