Decentralized Application Definition

| Publish date: 01/19/2018 (Last updated: May 29, 2018 10:59 AM)

What is dApp?

A decentralized app (dApp) is a software program that uses the power of blockchain technology,
and oftentimes smart contracts, to achieve decentralization. They store most often on cloud
computing platforms and can operate on multiple systems simultaneously.

Decentralized Application definitionEach system runs on the same blockchain network, and every system in the network communicates with the other systems in order to complete a task or command.

Blockchain based companies use dApps to streamline processes and increase operational efficiency.


The underlying blockchain technology fosters transparency and auditability.

Key Characteristics

Decentralized apps have four intrinsic characteristics:
1. Open source – The applications infrastructure and code must be publicly available,
allowing for transparency, auditability, and scrutiny.
2. Internally monetized – The application’s features are accessed by digital tokens / coins to
reward network users.
3. Decentralized – The application runs on a public blockchain and is free from the control
of a central authority.
4. Protocol consensus – Platform tokens are generated using a cryptographic consensus
protocol, such as Proof-of- Work or Proof-of- Stake.

Differences from Traditional Apps

dApps vs Apps
Open Source: because all parties have access to the code, it can’t be easily manipulated. Updates are based on consensus and are transparent.Closed Source:only the developers have access to the code, meaning it can be changed whenever the developer wants. Transparency is nonexistent.
Internally Monetized:digital token monetization means each participant can
receive tokens. App use can be global because there aren’t currency barriers.
Fiat Monetized:network supporters are not rewarded for participation; fiat money is used to purchase the apps.
Decentralized:not controlled by any one party. Changes must be agreed upon by the community.Centralized:controlled by centralized parties like app stores, corporations, and developers. Individuals must go along with the directions of the entity in charge.
Protocol Consensus:tokens are created in a decentralized manner, meaning money creation and supply isn’t arbitrary or easily tampered with.Singular consensus:the fiat money behind traditional apps is controlled by central banks. The corporations that control the apps can also redirect money supply and charge fees.

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