Decentralised applications run on the blockchain network. Although their interface is identical with a normal application, their backend function really differs.
Decentralised applications eschew a centralised server which is utilised to initiate transactions in a peer to peer (P2P) model.
How are dApps possible
On the onset of blockchain technology there were various protocols developed by programmers which focused on building various protocols which focus on solving various real life problems or open new functionalities. These protocols are called decentralised applications which focus on applications built on blockchain focusing on a range of sectors from technology to finance.
A decentralised application function on blockchain networks however a majority of such applications are built on the Ethereum blockchain. The data processing is done with the help of blockchain which uses distributed networks. The execution of each transaction is done with the help of smart contracts.
A “smart contract” is a very key element in a decentralised application. The smart contract is an automatic,self executing programme. These contracts help in doing transactions with a seamless and a quick approach.
Four pre requisite features of a decentralised application
Although decentralised applications are formed with a range of various iterations there are four pre requisite criteria which is supposed to be followed
- The whole Decentralised application is open source in nature. Therefore in order to initiate changes on the network there should be consensus from a majority of the members.
- The data of a decentralised application is supposed to be stored in a Decentralised network
- The Decentralised application should produce digital assets which can be claimed as proof of value.
- The Decentralised application assets should be distributed on the network as rewards.
If we strictly follow this definition we can easily classify various cryptocurrencies as rudimentary forms of Decentralised application. Although they don’t possess various functionalities related to smart contracts etc. however they can still be considered as a basic form of Decentralised application.
What is the future of Decentralised application
Ethereum has turned out to be a major catalyst acting as a major driver of growth of Decentralised applications. The primary reason for this can be attributed to smart contracts, network effect and user base functionality provided on the network.
The DeFi market which is growing leaps and bounds can turn out to be a major catalyst to deploy Decentralised applications. Users will experience conventional web experience based apps which have blockchain based capabilities. This is a primary method through which Decentralised applications are expanding the functionality of the internet.