dApp: what they are and how they work

dApps are decentralized applications. Facebook, Google, Twitter and YouTube are all centralized applications. This is because at the end of the day, they check the entire platform. They can remove content, change policies, and influence the direction of the platform on their own. There is a time and a place for centralized applications, just as there is a time and a place for dApps.

dApps are able to inherit one or more of the blockchain’s capabilities.

Censorship resistance, close to 100% uptime, and easy monetization are all things that can be easily implemented in dApp. The range of use cases for dApps is quite wide, let’s break down the “essential features” of a dApp and then give some examples of interesting things dApps are doing right now.

  1. Decentralized global network: no downtime, anywhere access, zero censorship.
    Open network: Most dApps work on networks like Ethereum. Anyone can join and contribute to the network, increasing its overall strength and profitability.
  2. Easy transactions
    Secure information sharing: Share anything, with anyone. This allows users to monetize their data to marketing companies or control who has access to their preferences.
    Transfer of assets: dApps are naturally linked to blockchains that have their own integrated currency. This makes it extremely easy to create and transfer units of value.
  3. Autonomy
    dApps work almost entirely on their own. This makes building a dApp relatively cheap to build and scale from a business perspective. The infrastructure is provided by the underlying blockchain network. This allows companies to focus more on user engagement and less on the technical details of deploying an application.
  4. Interoperability
    DApps built on the same platform are able to communicate with each other seamlessly. This is a great feature, because suddenly, the actions I take on one dApp can have an effect on another. Companies spend millions of dollars to create this feature from scratch. DApps built on the same blockchain are able to communicate with each other by default.

What is the purpose of dApps?

On the surface dApps right now are pretty simple, you can do normal things like playing cards, raising virtual cats (cryptokitties), gambling, or even hiring freelancers (ethlance). But the point of dApps is really to do what normal applications can’t do with centralized control and imperfect communication. The industry has protruded but scratched the surface of what’s possible with dApps. The use cases are still being explored, however we certainly have examples of very interesting concepts.

Some examples of dApps


Decentraland is a 3D virtual realm that runs on the Ethereum blockchain. Users can create avatars by linking an Ethereum wallet. They then enter a realm where they can buy and own virtual plots of land and purchase goods and services using MANA, the currency of Decentraland. Decentraland is its own virtual world, complete with its own decentralized virtual economy.


Augur is a peer to peer betting platform that allows users to bet on anything. Yes, literally anything. Will it rain tomorrow in New York? Will Trump be re-elected? Will this recession be greater than that of 1987? Users can buy the outcome they most likely, with a price between 0 and 100 (which represents the percentage probability). Enter early enough on the right side and you will walk it up to 100. This model is great for gamblers, but even greater for measuring public opinion. By creating an incentive for people to vote for what they believe is the most likely outcome, Augur can essentially collect reliable market data on anything.


One of the most popular and well-known dApps, IDEX is a completely decentralized exchange. This means that buyers and sellers interact directly with each other using their wallets. The main advantage of decentralized exchanges is that you can hold your keys while trading cryptocurrency. Typically, you will deposit your funds on a centralized exchange, giving up your access.

Aragon is a platform for the creation of decentralized autonomous organizations (DAOs). This is probably the most impactful and ambitious possibility of dApps. DAOs allow organizations to be governed entirely by users. Through collective voting, users can submit decisions or changes they would like to see in the organization. Everyone who has the DAO token can vote on the decision. This allows organizations to operate without any central part and be governed as a cooperative, except with the efficiency, security, and diversity of blockchain technology.

dApps FAQ

No, but Ethereum was the first blockchain of its kind to be built specifically for developers to easily build and run dApps on its platform. Second-generation “world-computers” such as Ethereum, Tron and EOS are all capable of running dApps. Ethereum is multifunctional, as it can support many different types of dApps. Technically, bitcoin is a dApp that has two characteristics; Money transfer and messaging. So while Ethereum didn’t invent dApps, it did bring a lot of attention and development into the space.

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