As you already know, a smart contract is a decentralized commitment between two or more parties on the blockchain. Smart contracts are closely related to financial transactions and have restrictions on the number of participants at a time. Decentralized applications extend the capabilities of this technology of dapp development services.

One of the benefits of decentralized applications is the ability to participate in an unlimited number of parties from all over the market. In addition, decentralized applications can use the blockchain for a wide variety of purposes. 

The technology for creating decentralized applications is a little simpler than the technology for writing smart contracts. This does not mean that anyone can create a decentralized application, but it will be easier to learn. If you want to do this, then it will be very easy to find guides on this topic on Google.

There are 2 classes of decentralized applications. The first is anonymous applications for everyday use, where all actions are performed instantly and automatically. An example of the application of this technology is the well-known BitTorrent. It’s a popular protocol for transferring data between users.

The other category includes applications that take into account the reputation of the participants. In such an ecosystem, all nodes are monitored and maintain a certain status within the application. Ensuring trust between parties is one of the main functions of such applications. However, there is no way to express this level of trust in monetary terms. And thus transfer it to someone else.

DApps classification

Decentralized applications can be classified according to one obvious criterion. Whether they use their own blockchain. Or are they a superstructure on the blockchain of some other application.

Type 1. The application is built on its own blockchain. The most obvious example is bitcoin. Besides it, some other altcoins use their own blockchains.

Type 2. In this case, the application uses the first type of application for operation. An example is the Omni Layer protocol built on the bitcoin blockchain. But the most obvious example is applications on Ether, the number of which at the moment, according to the, is approaching a thousand.

Type 3. “Application on top of the application”, when the protocol of the second type of decentralized applications is used for the functioning of the DApp. For example, SAFE Network or USDT Tether cryptocurrency using the Omni Layer protocol.

The development of the DApps industry is progressing at an extremely fast pace. A little more than four years have passed since the idea of ​​decentralized applications appeared. Bitcoin, by the way, was originally considered as a payment system. And not as a platform for a new technology of decentralized applications. And type 3 applications are being actively introduced as the most simple and energy efficient.

Stages of formation and development of DApps

Since decentralized applications are distributed and managed by consensus, community approval is required initially. And in order to familiarize the community with a new development, a White Paper is usually published that describes the development protocol and the new ideas behind it. Accordingly, after the publication of the White Paper, developers expect community feedback. It in the form of feedback is necessary to adjust and develop the ideas underlying the application.

At the second stage, the crucial moment of the initial distribution of tokens comes. There can be many options, creativity is encouraged. But they can be reduced to three areas:

  • mining;
  • fundraising (raising funds through the distribution of tokens among investors);
  • payment for certain services necessary for the development of the project.

Depending on the model chosen, the company publishes a mining program. There is a wallet for managing tokens. Or there is a payment system for working on promoting a Dapp.

Even a good idea can be ruined by the wrong promotion strategy. And, on the contrary, from time to time weak projects appear. But with a powerful promotion program, the purpose of which is to take more and immediately. And then at least the grass does not grow. Unfortunately, such cases are inevitable at the current stage.

Well, then comes the main stage in the development of the application – the spread of property rights among an increasingly wide range of participants. This is the stage of real decentralization and the inclusion of market mechanisms for its support and development.

Also Read: The Top Ethereum Projects To Watch In 2021