What is a DApp?

Have you dabbled in the widespread and enlightening world of blockchain technology? Then you no doubt have run across Ethereum. It’s quite possible that you may have also come across the term, DApp” and wondered what it was. That’s what we’ll explain in detail today.

As is with most innovations of this current era of cryptocurrency, DApps are a by-product of blockchain technology. This tech has recently been making tremendous headway in its development and popularity in the crypto community.

DApps – the basics

Right off the bat, you may be wondering what exactly a DApp is and why it has a reputation for being a cutting-edge system in relation to blockchain technology.

Formally known as a ‘decentralized application’, DApp is a relatively new concept control of our online data. The key component in DApp’s explosive growth is the objective to create a system that is leaderless. This kind of decentralized system requires no middleman and instead connects the users and providers directly. The usage of a DApp allows an individual to publish something to the blockchain that cannot be erased or edited by anyone; not even the company that created the system.

3 Types of DApps

The Ethereum white paper categorizes DApps into three types. The first is money management. Here the application acts as a way to settle contracts between users. The second type includes the involvement of money and mixes monetary information with data from outside the blockchain. A basic example of this is insurance that pays out when an incident affects the insured individual. The third and final type is related to all the other functions outside of monetary-related trades and services. An example might online voting and decentralized governing.

DApp vs Smart Contracts

One would be quick to assume that a DApp is similar to smart contracts, which are systems that digitally run the negotiations and ongoing performance of a contract. While on the surface that is an understandable observation, there are actually key differences in the two operations. Though that is not to say they are not entirely affiliated with each other.

DApps are websites that have blockchain technology enabled, whereas smart contracts are what allow it to connect to the blockchain. DApps use traditional web technology to render a page (ex. HTML and Javascript). However, they utilize smart contracts to connect to the blockchain. This is different from today’s standard, using an API (application program interface), which links you to a database.

Decentralized applications make up the ‘front-end’ (what is seen) and the ‘back-end’ (the information in the background). Smart contracts make up only the back-end and play a small part in the function of the DAPP. Smart contracts go from front-end to API to database, and in contrast, DAPPs go from front-end to smart contract to blockchain.

To put simply, making a DApp on a smart contract system would require multiple smart contracts. Additionally, constructing the front-end can only be achieved with a third party system.

DApp requirements

As is with most complex technological systems, in order for an application to be recognized as a DApp in the context of the blockchain, it must meet certain criteria. In this case, the application…

  1. They must be open source, meaning it must operate independently and with no entity controlling the tokens. The general consensus of the users are the ones who decide on and act out all changes based on feedback.
  2. Its data and operation records must be cryptographically stored to avoid any encounters with central points of failure.
  3. They must use a cryptographic token, be it Bitcoin or any other token that is native to its system. These are necessary for access to the application and to provide any contributions.
  4. They have to be able to generate tokens in accordance with a standard algorithm.

The development process for a decentralized app begins the same way most budding systems do: with an outline. For DApp, the development commences with outlining the application idea with white paper and encompassing a working prototype. Following this stage, a token sale is often set up. This is achieved with the use of ICO (Initial Coin Offerings), which is a fundraising system that is based on token sales; it is basically another, more innovative form of crowdfunding.

The final step in DApp development is the investment of the funds that go towards building the application and then the inevitable launch of the now completed DApp.

Bringing DApps to the Public

Participating in an ICO is simple in the same way that smart contracts are simple; that being that there are no involvements of middlemen who act as brokers or exchanges.

The participant will need cryptocurrency to participate and register with this exchange. Once the money from your bank account arrives into your cryptocurrency exchange account, you then exchange it for the cryptocurrency you would like to purchase. Following this, you transfer your coins to a blockchain wallet that you control.

Most token sales happen on the Ethereum network. That means you will need an Ethereum wallet to continue in the token sale. After you back up your wallet and you are able to send Ethereum to the exchange, you can now buy your ICO tokens. Once you receive them, make sure you transfer them into a secure wallet where you are the sole holder of the wallet’s private key.


The diversity of DApps

Along with the aforementioned three categories of DApp (financial, semi-financial, and governance), the application can be applied to numerous – not to mention diverse – operations.

These include token systems, identification systems, financial derivatives, and data storage. They are also chiefly tied to Ethereum and its continuing aspiration to build decentralized applications and to implement blockchain technology into the global economy.

With that said, there is a handful of DApps that Ethereum has developed that are already in operation. Not just in concept, but also in execution. We’ll give you a sampling:

Ethereum DApps that are currently thriving

  • ‘Golem’ – a project that aspires to create a wide-scale, decentralized computing system that anyone can access. Its ‘battery’ is the continuous power from all the users’ devices, from computers to phones. CGI rendering is among its most prominent tasks and the system’s power source is cheap and reliable.
  • ‘Augur’ – a forecasting system that aims to combine collective predictions (whether it be about politics, companies, or even the weather) with a decentralized network. Benefits of this application will include trading fees that go directly to reporters and market creators. They in turn receive payment as soon as the winning outcome is announced, and anyone anywhere in the world can use it.
  • ‘Status’ – an application that allows users access to Ethereum’s ecosystem through their mobile device. It offers an open source community in which users can browse, chat, and securely transact, all in your pocket and at your fingertips.
  • ‘Aragon’ – a project in progress that is being helmed by a Swiss company. This application will allow users to organize and collaborate without the hassle of boundaries. It manages organizations with the use of blockchain technology. Its primary selling point and goal is to provide freedom through the means of decentralization and creative tools.

Outside of the Ethereum blockchain, other decentralized apps include the following:

Non-Ethereum DApps

  • ‘Counterparty’ – a financial platform belonging to Bitcoin’s blockchain that allows users to create and trade any kind of digital coin. In addition, it allows anyone to create a smart contract on the bitcoin blockchain.
  • ‘Siacoin’ – an open source cloud storage that services private blockchains. It connects its users who need storage space to hosts worldwide who are offering hard drive capacity and uses blockchain technology to secure the data.


As it has been stated multiple times, a DApp is a concept that is still in its infancy. It has indeed made great progress over the years. Yet it has not grasped the necessary leverage it needs to be as respectable as Bitcoin or even smart contracts. The very idea of a leaderless system may sound unorthodox. However, decentralized applications are making strides in proving that it is not only an efficient system but one that is also beneficial.

In this new wave of intrigue and interest in blockchain technology and everything surrounding the expansion of cryptocurrency, it is definitely not outside the realm of impossibility that this will lead to more advancements in DApp development.