Apr 28, 2024 1:13:57 AM

Applications built on the structure of a blockchain are called dApps, short for decentralized applications. A dApp usually consists of a smart contract and a user interface.

Such applications are decentralized because blockchains are decentralized platforms. However, care must be taken with such a term, as decentralization is almost always partial. For example, many decentralized applications have their user interface hosted on a centralized server, such as Amazon or Google, so the application is only partially decentralized.

Let’s study the advantages and disadvantages of decentralized applications relative to centralized applications. One of the most significant advantages is that such applications are immutable and transparent, as they are built on top of smart contracts, which are immutable and transparent. Another significant advantage is that it does not have a single point of failure. For example, there is no possibility that a server fails and the application goes down.

The most significant drawbacks have to do with cost and scalability. Since part of decentralized applications must execute and be saved on the blockchain, it must be performed by all network nodes. Centralized applications are faster and more scalable precisely because they depend on a single point of authority. They are executed by a single entity and do not need to wait for the network to reach a consensus.

Cost and scalability issues, however, tend to be resolved with the evolution of blockchains. While Ethereum can only perform 20 transactions per second, new-generation blockchains such as Solana and Neo can perform tens of thousands of transactions per second. The cost of transactions can also be lowered by using layer 2 blockchains or by choosing blockchains with consensus mechanisms that are most scalable.

The blockchain is used as a computer and a decentralized database. Ideally, the user interface for decentralized applications and file storage should also be placed on decentralized platforms. Blockchains do not support storing anything besides small files, so a solution must be sought in another service.

A decentralized data storage protocol is needed to store large files, and some proposals have been presented. One of them is called IPFS, short for InterPlanetary File System. Unlike cloud storage from companies like Amazon and Google, IFPS stores file in a distributed way on a peer-to-peer network, where anyone can participate. Another example is Arweave, whose idea is to be a network like Bitcoin, but for data. In this context, one of the advantages of the Neo network is that it has its own data storage platform, NeoFS. Thus, looking for a solution outside the blockchain itself is unnecessary since Neo has this service natively.

Decentralized messaging, decentralized identity generation, and decentralized domain name platforms are also at different stages of development. They all embody the central philosophy of blockchain, which is decentralization. And decentralized applications are not just the future but the present. Let’s see some examples of decentralized applications that are already widely used.