Let’s look back about two decades ago when the concept of blockchain and cryptocurrency was unknown, or it was considered nothing more than rocket science. But thanks to continuous technological innovations, it has become a reality today.
But since the inception of blockchain, this technology has come too far in terms of benefits. As a result, this innovation is growing in popularity among individuals and businesses. Thus, it is not a surprise that we have more than 2500 cryptocurrencies.
We live in a digital-driven world that is flourishing like a wildfire, so it becomes crucial for businesses to stay up-to-date with the trends.
Without a second thought, the advent of the internet has made our lives convenient. It has also increased the risk of online malware. Given the number of frauds taking place, most people believe that blockchain has the potential to overcome all these challenges. It is because this technology offers top-notch security, transparency, and privacy.
Currently, blockchain has several use cases. It includes healthcare, finance, and banking, agriculture, gaming, etc. One such application that has taken the world by storm is decentralized app development.
When it comes to decentralized applications, they seem to be an excellent alternative to traditional apps due to various good reasons. On the other hand, cryptocurrencies offer accessible transactions without banking fees at low transaction fees. In this post, we will look at how cryptocurrencies and DApps are related.
- The differences and similarities between cryptocurrencies and DApps
Cryptocurrencies were the first use case of blockchain. But due to constant updates and improvements in the field, today, we have a world of decentralized applications, which has applications in numerous sectors. DApps might have a similar UX to traditional apps, but their back-end processes are entirely different.
One of the significant similarities between cryptocurrencies and decentralized apps is that both of them are blockchain-powered. For this reason, the transactions through them are highly secured, transparent and scalable.
Usually, cryptocurrencies and DApps work simultaneously in decentralized finance. These are applications that create financial services with the help of cryptocurrencies. As a result, they offer services, such as borrowing, lending, private payments, and interests without personal data. In addition to this, Ethereum is used in building most DApps. Thus, it is clear that cryptocurrencies and decentralized applications are closely related.
The decentralized app is the latest innovation of blockchain. It is essential to understand the potential of decentralized application development in the coming years. Further, we will see how the distributed nature of blockchain benefits cryptocurrencies and DApps.
- High level of security against online theft, fraud, and malware because the data is not stored in a single server.
- The distributed nature can help you overcome potential challenges like system crashes due to the presence of nodes. For example, if a crash happens in one node, the rest of the nodes will still function.
- Smooth and hassle-free closing of agreements with smart contracts because everything works automatically.
- With distributed character, the use of data and content for commercial purposes can be avoided. It is because the information from a decentralized application is non-traceable.
- A brief introduction of the decentralized application
Decentralized applications or DApps are software applications that run on blockchain networks. These applications do not have an intermediary to carry out any processes and transactions. Thus, they allow users to build direct connections while protecting their data and essential information.
- How does decentralized application work?
When it comes to DApps, they depend on blockchain to carry out transactions using smart contracts and process data via distributed networks. Smart contracts are the key components of DApps. They are self-executing agreements that ensure seamless, automatic, and quick transactions between two parties.
Each user of a DApp is considered a node, where all the members work together in a decentralized ecosystem. As mentioned already, everything works automatically in DApp due to reliability on smart contracts. Whenever a new process or transaction performs in a decentralized app, the information gets updated on the nodes. And a copy of each process history is stored on the nodes.
- Advantages of the decentralized application
Generally, decentralized applications run on a peer-to-peer network of computers instead of a single computer. These apps are designed to prevent any failure and crash. Other benefits are:
- Avoid data manipulation
- Reward all value contributions
- Give control to the users
- Resistance to censorship from any authorities
The bottom line
The DApp market is set to increase the use cases and adoption due to numerous benefits. As a result, there will be a remarkable growth of a decentralized ecosystem. These apps run on a blockchain, making them more secure, transparent, and trustworthy. If you are looking for a company that offers decentralized application development services, Steem Expert is your one-stop-solution.