Decentralized Applications (dApps) - Crypto Academy S5 - Homework Post for Task 8
Homework Tasks-08
1). What are dApps? Explain the working system of dApps? What are the differences between dApps and other applications? Explain the advantages and disadvantages of dApps? How can dApps developers promote their apps? What should we pay attention to when using dApps? How do we find the information of a DApp that we want to know? Provide the steps (Screenshot required).
Hello everyone!
It has been an interesting and a wonderful learning experience. I have studied the topic and it has exposed me to the new blockchain technology in our transaction process.
I am very impressed with this innovation. Having done my assignment, I hereby present my home work post.
Introduction
The evolution of blockchain technology in recent times has paved way to elimination of intermediaries or third party in our modern day transaction process.
In 2014, a report titled “The General Theory of Decentralized Applications (Dapps)” written by different experienced authors like David Johnston and Shawn Wilkinson was released.
In the report, the authors stated that for any application to be called dApp that it must entail the following:
That every dApp must have open-source code and work without third-party intervention. That It must be controlled by the user and not by any intermediary.
That all dApp information must be on a blockchain network which must be accessible by anyone.
That every dApps must have cryptographic token for access and that contributors such as miners and stakers should be rewarded with the cryptographic token.
That every dApp must have a consensus method that will generate tokens, eg proof-of-work (PoW) or proof-of-stake (PoW).
With the above information, the definition of dApp becomes very simple and clear.
What are dApps?
DApp is the common acronym for Decentralized Applications. DApps refer to peer-2-peer applications that run on a blockchain network, that no one person or entity has central control.
They are open-source, shareable, and stackable and they operate on their own without intervention by any third-party or intermediaries like government, bank, exchange company etc.
DApps data and records are made public on the blockchain network and can be accessed by anybody, unlike normal traditional centralised system that is controlled by one single authority where all data and records are hidden.
DApps use consensus mechanism like proof-of-work (PoW) or proof-of-stake (PoW) to generate tokens, and they use this cryptographic token to reward contributors and to help keep the network secured.
A very good example of Decentralised Application is PancakeSwap dApp. It runs on a decentralized blockchain network and they use the Ethereum blockchain for data storage and smart contracts for their app logic.
It's contents are created by it's users and they are been rewarded with their cryptocurrency token known as CAKE.
Explain the working system of dApps?
Decentralised Applications operate through backend code known as smart contracts, programs stored on a blockchain which are used to automatically execute an agreement so that all participants can be sure of the transaction outcome without involvement of any third party.
Dapps run on a decentralized blockchain network and they use the Ethereum blockchain for data storage and smart contracts for their app logic.
Once a Dapp is lunched on the Etherium blockchain, the data cannot be altered because their code are written and embedded in the smart contract.
The functionality and operations of dApps are carried out by nodes in the blockchain network. These nodes are users computers that are connected to the decentralised blockchain network of which each user represents a node in the network.
The users transactions pass through the smart contracts which ensure that all users participate according to the set requirements. Smart contracts provide infrastructure where users transactions are validated and updated.
What are the differences between dApps and other applications?
DApps are wonderful decentralized applications that were created to solve the problems of the traditional centralized system of transactions.
There are a lot the differences between them and other applications.
These are some of them:-
Decentralized applications run on a peer-to-peer network system, while other applications pass through third party for their transaction processes.
Decentralized apps are controlled by the user and not by any intermediary, while other applications are controlled by intermediaries or central authority.
Decentralized applications are transparent and open source, while other applications are not open and transparent in their operations.
Decentralized apps operations/transactions are very much faster than centralized apps because they operate on p2p system, while other applications take a longer time to go through a cumbersome process to validate transactions.
Decentralized application which runs under the command of the smart contract is very secured and less vulnerable to hackers, while other centralized applications are more vulnerable to hacking attack.
Advantages and disadvantages of dApps
Everything in this imperfect world must have some advantages and disadvantages.
Decentralization applications have so many advantages as well as some disadvantages too. Below are some advantages and disadvantages of dApps.
Advantages Dapps:
Decentralized applications eliminate third party in their operations/ transaction processes. In Decentralized applications, intermediaries and third parties are not needed. The system operate purely on peer-2-peer.
Decentralized applications is not controlled by any single entity. No individual or government can control or restrict access to the dapps. Users have the freedom to perform transactions any time they want without any restriction from anybody.
DApps are open source and transparent. Data and transaction records can be accessed by anyone, unlike normal centralized system that is controlled by one single authority where all data and records are hidden.
DApps network is very secures. They are not vulnerable to all types of attacks because they have no centralized server or physical device to target.
DApps allow users to make transactions directly using cryptocurrencies.
Transactions in dApps are always faster and cheaper because the cumbersome transaction verification processes provided by third parties are completely eliminated.
Disadvantages of Dapps
Despite the numerous advantages of dApps they have some disadvantages which includes:-
Updating or making changes in a dApp platform requires majority consensus from the acting governance. This could take a lot of time for users to debate and reach agreement on what change to be made to improve the platform.
DApps can not be accessed easily. DApps users are required to download dApp-supported browser and send their crypto to the dApp wallet before they can make use of it. This can make so many new people to be confused on where to start.
For dApps to work properly, they require a very good number of nodes, governance and users. This can make accessing dApps difficult at an early stage, because many people may not get the support they need and they may get discouraged.
Decentralised applications do not allow reversal of wrong transactions because they have no central governance. This can lead an investor to a huge loss and frustration when he makes a mistake in his transaction.
DApps can be prone to hackers because they are open-sourced, where anyone can have access to users data and transaction records.
How can dApps developers promote their apps?
DApps developers can promote their apps is so many ways. Below are some effective way through which dApps developers can promote their apps:-
Bounty Programs
DApps developers can effectively promote their apps through tokens bounty programs. This is a promotional strategy where dApps developers give incentives or reward users with their token for contributing to the development of their app. For example, DApps developers may encourage users to take specific actions like creating promotional publication for their dApp, bringing in new users to join dApp platform, re-posting promotional publication for their dApp, etc and they will be rewarded with the dApp token for their efforts.Community Building
One powerful strategy dApps developers can employ for a successful promotion of their apps is building of communities. The reason is because when a dApp developer succeeds in building communities, these community members will spread the good-news about the dApp project around the world. They will easily attract new members who will join the platform and the dApp project will experience a speed growth.Collaborating with influential People
There are many professionals and influential people that are already with audience you want to attract to your dApps. These people have many people who read posts on the internet and they follow them on social media and they are influenced by them. DApps developers can collaborate with these type of people so that they can also inform their audience about their dapps.Website
DApps developers need to create an online presence by by building an attractive website for their apps. The reason is because people would like to know every thing about the app.Social Media
In recent times, Social media is one of the effective platform to advertise and promote products. DApps developers can use social media for their app promotion.Influencer/Celebrity endorsements
Another powerful way to promote dApp is through celebrity endorsement. Getting an influencer or a celebrity to endorse your dApp can go a long way to promote your Dapp.
For example, the endorsement of Dogecoin by Elon Musk in early 2021 seriously promoted the asset and the value and price of Dogecoin sharply increased from $0.1224 to $0.7630 within 23 days.App Store Optimization (ASO)
App Store optimization, or ASO is another effective way to promote dApp. Dapp developers
can make good use of this promotional strategy to get their dApps promoted in the SEO of the mobile app world.Dapp developers can also promote their dApps by ensuring that their dApps are listed/included on the popular exchanges and listed among Dapps reviewing websites.
What should we pay attention to when using dApps?
Decentralized applications have a lot of interesting benefits, but it is not advisable to jump into using dApp without properly considering certain important issues.
Before using any dApp, the first thing one should pay attention to is confirming the genuity of the dApp. The reason is because not all claimed dApps in the internet are genuine.
There are high-risk dApps that are presented to be genuine, they promise to be good dapps but they are scammers.
Therefore, before using any dapp, you need to pay attention to proper investigations to avoid investing in a wrong and high-risk dApp.
Another important thing you should look out for when using any dApp is the security features of the dApp. The security of your crypto assets is very necessary and should not be compromised.
So you should properly pay attention to the security features provided by the dApp to ensure that your crypto assets will not be exposed to various forms of hacking /cyberattacks.
How do we find the information of a dApp that we want to know? Provide the steps (Screenshot required).
How we can find information about a dApp that we want to know. I will choose one of them and explain it using a step by step method with screenshot for easy comprehension.
To get information about a dApp, follow these steps:
Step 1: Go to www.dappradar.com
Step 2: Click on "Rankings" on menu bar.
You will see all the dApps latest ranking
Step 3: Select the dApp you want and click on it. I want to find information about PancakeSwap, so I clicked on it.
As at the time of writing this post, Pancake is number "1" on the ranking list, and it shows Number of users, volume, and balance, as you can see on the screenshots below.
I was taken to the detail page. On this page, the latest statistics was shown. Market Cap, Token Name, Token Price, and historical activities of PancakeSwap dApp for one month, from November to December 2021. See the screenshot below.
If you want to visit PancakeSwap page, you can click on the "Open Dapp" button.
Conclusion
Decentralized Applications is one of the best thing that has ever happened in our today's financial transaction system.
The development of decentralized transaction applications that run a peer-2-peer system without intervention by any third-party or intermediaries like government, bank, exchange company etc is awesome.
I am so happy and excited to learn about this. I appreciate our lecturer, Prof. @wahyunahrul for the wonderful class.
Thank you for reading my post and God bless you.