What are dApps?

Along with smart contracts, decentralized applications (Dapps) are one of the many exciting uses of blockchain technology. But just what are Dapps?

In this article:

What are dApps?

dApps are applications that run on blockchain networks, such as Ethereum. dApps combine smart contracts with nice user interfaces to create a decentralized application. All the rules of the application are written in the smart contract and then combined with other technologies to make interacting with them nice, easy, and fun!

The applications are called “decentralized” because blockchain platforms like Ethereum are decentralized and run on various servers or computers around the world, instead of on one server or controlled by a single person or organization.

Examples of dApps

dApps, like their centralized counterparts, can have a variety of use cases. Here are some famous dApps:

  • Augur - Prediction marketplace on the Ethereum blockchain
  • Golem - Marketplace for renting computing power on the Ethereum blockchain.
  • Siacoin - Marketplace for cloud storage that runs on its own blockchain
  • Bancor - Exchange on the Ethereum blockchain that allows users to trade blockchain tokens like ERC20 tokens
  • Compound Finance - A decentralized lending and borrowing platform that allows users to earn interest on their lending, or borrow what they need.

Why do we need dApps?

dApps have a number of benefits over centralized applications.

No single point of failure

Centralized applications are the basis of today’s Internet, with a majority of the world’s population using them everyday. While these applications have added a lot of value to lives of many, they do have issues, a big one being the fact that they are single points of failure.

When immensely popular centralized applications like Facebook, Instagram, Whatsapp, Gmail, and Google Drive go down for long periods of time, not only do users lose access to social networking, email, and storage services, but businesses who rely on these platforms do, too. This of course impacts business operations and profitability. dApps on the other hand, can’t go down as easily unless all nodes (servers or computers) in a blockchain go offline at once (highly unlikely scenario).


Centralized applications like Facebook and Twitter have become popular to the point where billions of people post content to these platforms daily.

Since the companies behind these applications, and not the users themselves, control these platforms, they have the power to allow and disallow certain users and types of content. In other words, the companies controlling the applications control a large part of online public discourse and can ban people with certain viewpoints.

Of course, this is very dangerous in a democratic and open society. dApps provide an alternative to potential censorship on centralized applications since users can post what they want without fear of being censored. In fact, many dApps, such as Dtube, Steemit, Minds, etc. have been created for this purpose.

Wider distribution of value

While many centralized applications have added tons of benefit to our lives, the value created by them has largely gone to the application’s creators and investors and not the users themselves. This is unfortunate considering that the users are the ones who generate much of the applications’ activity. For example, Facebook does not create content but its users do millions of times a day.

YouTube is notorious for demonetizing videos, and frequently adjusting the rules to appease advertisers. Content creators have expressed concern and frustration about this as YouTube seems to be prioritizing the whims of advertisers over the feedback of content creators who bring users to the platform.

Decentralized applications, on the other hand, can level the playing field and reward all parties involved. By giving users the power to reward content they enjoy, creators are able to produce content that is suitable for their audiences, and not have to worry about being advertiser friendly. For example, on Steemit, instead of one individual or organization benefiting, such as through advertiser money (Facebook, Instagram, etc.) from user-posted content, users are paid from a daily rewards pool for valuable contributions, upvoting popular content early, and more.

Future of dApps

dApps are very much in their infancy, but some believe that they could lead to a new type of Internet, where much of the Internet-based applications we use run on decentralized networks.

Though this vision is still far off, dApps are being created left and right in industries as varied as dentistry, music, photography, reputation management, pensions, employment, and much more!