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What Are dApps And How Do They Work – Decentralized Apps

When we use a computer or cell phone, many of us don’t really know or even think about how the hardware equipment inside of them works.

In order to benefit from from, an operating system such as Windows, Linux, or macOS is needed, which represents the interface used to interact with all necessary components in order to browse the Internet, post photos on social media, or even to like this video and subscribe to this channel in order to keep up with the newest info from the crypto world.

Most users don’t need to really understand how the hardware part works because the operating system is built to be as intuitive as possible.

The same thing can be said for dApps, or decentralized apps, as they make sure that we have access to the blockchain without having to actually learn the technical side of it.


What Are dApps and How Can They Change the World

So, let’s see what are dApps in crypto:

If we think about our previous example, dApps are apps that work just like the classic apps we are used to with the main difference being that they don’t run on a single computer or cell phone, but on a decentralized network or blockchain.

The fact that dapps can “live” on a shared network, alongside other innovations specific to the blockchain, offer some advantages to traditional apps, which we’ll explore together.

The biggest difference between dApps and traditional web apps lies in the fact that dApps have the goal of offering users control over their personal data. On top of this, dApps are:

  • Open source: they are free and offer other programmers the chance of modifying and resharing them in a different form.
  • Decentralized: hosted on blockchain or decentralized peer to peer networks.
  • Shares: they use advanced crypto technology in order to check transactions.
  • Deterministic: which means that the same order executed on multiple nodes on the blockchain will have the same result.
  • Isolated: If there is a bug in the app, this won’t affect the functioning of the blockchain it is running on.


The Advantages of dApps:

  • Once a dApp was launched on the blockchain, it can not be stopped anymore. Anybody can use its features even if the team that created the dApp doesn’t exist anymore.
  • The access to the dApp or its features can’t be restricted to anybody on the network.
  • Users don’t have to share their identity in order to launch or interact with a decentralized app. Most times, users will only need the address of a digital wallet. If you want to find out more about digital wallets, check out our video about Metamask.
  • Since on the blockchain we can find tokens and many other cryptocurrencies, dApps benefit from the advantage of integrated payment systems without having their devs waste time and money on integrating other payment methods.
  • Cryptography offers protection against hackers or other bad actors that would like to tamper with user transactions or of other dApps in their name. Since dApps are open-source, they can be analyzed by anybody which guarantees the execution of the open source code in a ponderable way without needing a centralized authority to verify the source code.
  • Once a decentralized app is launched on a blockchain, it will continue to run until the blockchain is stopped.
  • The data saved on the blockchain is immutabile. This means that bad actors won’t be allowed to modify transactions which were already made public. History can not be rewritten.

The Disadvantages of dApps:

  • Speed: blockchain technologies are still facing problems when it comes to scalability which means that many blockchains existing today have problems in processing large volumes of transactions at once.
  • The cost: also a result of scalability problems, using blockchain networks can bring additional cost. Since processing transactions asks for fees to be paid to miners, when the network is experiencing congestion, the costs will rise for those who want their transaction processed faster.


dApps Types

We can divide dapps into several categories with the most popular ones being:

  • Gaming – Decentralized applications that offer users the video game experience combined with the possibility of interacting with blockchains. 
  • DeFi – DeFi dApps are in direct competition with traditional finances through the introduction of ways of receiving or offering loans and creating innovative financial instruments like liquidity pools. 
  • Collectibles –  This came with the growing popularity of NFTs and decentralized apps that offer the possibility of buying NFTs. 


Top 5 Most Used dApps

Let’s do a countdown of the five most popular dApps by total number of monthly users.

The fifth place goes to Axie Marketplace with 476 thousand monthly users. Axie Marketplace is the official marketplace for the Axie Infinity crypto game. Here you can easily find Axies, Land, and other articles used in the game. Axie Infinity is a unique digital community passionate about collecting, exchanging, and fighting each other through fantastical creatures known as Axies.

The fourth place is occupied by Atomic Assets with 504 thousand monthly users. Atomic Assets is an NFT standard for NFTs on the eosio blockchain. Anybody can use the Atomic Assets standard to tokenize and create digital assets as NFTs. 

Alien Worlds takes the third place with 541 thousand monthly users. This is a crypto game that allows its players to extract TLM, the native token of the game, from various virtual worlds. 

The runner-up position goes to 2 Splinterlands with 579 thousand monthly users. Splinterlands is a collectible card game, similar to Hearthstone, where players create packs with the collectible cards, which have different stats, in order to compete with other players.


First place goes to PancakeSwap with 3.18 million monthly users. PancakeSwap is an automated market maker or DEX which allows the exchange of tokens on the Binance Smart Chain blockchain. 

Other popular dApps are OpenSea and LooksRare, which are marketplaces where users can buy or sell NFTs, or Uniswap and SushiSwap, which are decentralized exchanges which allow the exchange of tokens on the Ethereum blockchain.

We remind you that this is the ranking at the current time, but things may change in the future, so, if you want to check the most recent data, you can use DappRadar, a dApp that analyzes over 3,500 dApps.

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