Blockchain 101: Distributed Applications

The idea of the "Dapp" or Distributed Application, is more of an answer to the question of centralization and censorship. Because of this, one could say that Bitcoin is the first Dapp. It is a decentralized application that allows for the transaction of "blocks" of data without the "middle-man".

Given that Bitcoin by all intensive purposes is indeed a distributed application, Ethereum's smart contracts offer much greater functionality. And the network itself is designed as a platform for applications and contracts with Ether as the currency for data transactions.

In the Ethereum White Paper, it is stated that the intention of Ethereum is to create an alternative protocol for building decentralized applications. Ethereum allows developers to create the aforementioned "smart contracts" using the Turing complete Ethereum Virtual Machine.

Ethereum allows any company to use their open source code to build upon the Ethereum blockchain. This allows people to have an easy-to-use and programmable blockchain that can be customized for their needs. Companies are created with fascinating ideas that utilize the toolbox that Ethereum provides. These applications address many issues and weaknesses that we have in our systems today, but likely most of the revolutionary ideas have not even been created yet.

As our world transitions more and more into the digital world, this technology will be central in many of our industries. Soon, real-world assets — ownership of cars and houses, diamonds and gold, and supply chain shipments — will be digitized. They will have a digital identity and can be traded, sold, tracked, and verified. The blockchain can store these assets while also protecting the information associated with them. With the Internet of Things, every electronic device in your house, from your coffee pot, fridge, and car, will be able to communicate and coordinate with one another. All these developments, combined with smart contracts and blockchain, create enormous potential.