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What is a Decentralized Application?

Decentralized applications (DApps) are among the new breed of apps whose growth is attributed to blockchain technology. DApps run on P2P computer networks rather that one computer. Therefore, these applications cannot be controlled by one computer or user. However, the main question that abounds is what is a decentralized application? Well, there isn’t a straightforward answer to this. You can  only define  what DApps are by differentiating them from traditional applications.

DApp Criteria

For an application to be considered decentralized, there are a number of criteria that it should meet. An application can only qualify to be categorized as a DApp if it has an open source. This implies that the source code of that app must be available to all. Similarly, it ought to be decentralized in the sense that it uses blockchain-like cryptographic technologies. A decentralized app should also have crypto tokens for fueling itself. Likewise, it should be able to generate tokens as well as have a built-in consensus mechanism.

Decentralized applications do not necessarily need to run on blockchain networks. BitMessage, Torm Popcorn Time, and Bit Torrent are some of the well-known decentralized apps that run on P2P networks but not on blockchains. What you may not know is the fact that a blockchain is a specific type of P2P network. Since decentralized apps have an open source and are available to all, they also have an unlimited number of participants on each side of the market.

Classification of Decentralized Applications

Everytime there is a discussion about cryptocurrencies, one of the questions that get asked is what is a decentralized application? One of the ways of understanding what DApps are is looking at their classification. Decentralized applications are classified under three main categories. These are Type I, TypeII, and Type III DApps.

Type I DApps are those that have their personalized blockchain such as Bitcoin.Various other crypto-coins also fall under this category. Type II decentralized apps are protocols, which have tokens that are essential for their function.One of the most known Type II DApps is the Omni Protocol. Type III DApps are those that utilize the protocol of Type II DApps. For instance, the SAFE network utilizes the Omni Protocol to issue Safe Coins, which thereafter, are used to create distributed file storage.

How do Decenralized Applications Work?

The functioning of DApps is based on the implementation of the criteria that distinguish them from ordinary apps. Therefore, DApps are open-source software platforms that are implemented on decentralized blockchains. They are also fueled using crypto tokens that are generated using an algorithm/protocol. The open nature of the code means that anyone can see it and make a contribution.This way, product development with regard to quality and quantity is faster.


The decentralized world has grown remarkably in recent years. It has been predicted that in a couple of years, DApps will outdo the world’s biggest centralized apps due to their utility, network valuation, and user base. It is only then that people will have an exact answer to the question, what is a decentralized application?

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