What are Decentralized Applications (DApps)?

DApps are a new type of applications which cannot be shut down, are not owned by anyone and don’t have any downtime. DApps stands for Decentralized applications and an application should have a specific set of features to qualify as DApps. These features are:

  1. Decentralized
  2. Open Source
  3. Algorithm
  4. Incentive

DApps should have a source code which is available to the world of blockchain cryptographic technology. It has crypto-tokens and has an inbuilt consensus mechanism.


Functioning of DApps

Open Source code

DApps are open-source so anyone can see the source code and contribute to it. Then they are decentralized using the blockchain technology.


A permanent record of all the transactions is documented in the database using the blockchain technology which anyone can refer too at any time.

Different algorithms

Then, this record of transactions is added to ledgers with the help of tokens which are miners using different kinds of algorithms and protocols.

The popular algorithms which are used by all the community members to reach a common consensus are Proof-of-work and Proof-of-stake.

POW (Proof -of-work): This protocol enables the miners to mine and in return receive rewards. The process of mining and adding the blocks to the blockchain, keep the chain secure and the entire process is energy consumptive.

POS (Proof-of-stake): This protocol requires the users to hold and stake the cryptocurrency token. This enables the user to become an eligible master node in the blockchain. This helps in faster processing of the transactions and keep the blockchain secure.

DApps Classification

Type I

Type 1 DApps use their own blockchain technology.


Type II

Type II DApps make use of the blockchains of the Type I apps. They have protocols and their tokens essential for their functioning.

For example Omni protocol.

Type III

Type III DApps use the algorithms and protocols of Type II DApps.


Future of DApps

Many people believe that DApps will surpass the software corporations in all aspects in the future. They are superior to their peers as they are flexible, transparent, distributed, decentralized, resilient, and have a superior structure.