How are they different from the vast majority of WebApps (Websites) that are widely in use today?
In this post, I’ll try my best to answer these questions straightforwardly.
WebApps (e.g., Google, Facebook, Twitter, etc.,) that are widely in use today run on computer(s) controlled by a single entity.
To be clear: in this article, “Centralized Apps” refers to WebApps.
Whereas, DApps or Decentralized applications (e.g., CryptoKitties) are applications that run on a distributed global network of computers that are not controlled by any single entity.
Advantages of DApps over Centralized Apps
Since DApps run on a distributed global public network,
- Censorship is virtually impossible
- Malicious actors (computers) in the network cannot secretly tamper with the application
- Available all across the globe
Disadvantage of DApps over Centralized Apps
As there is no central authority, conflicts may arise in establishing consensus (the process of achieving general agreement among the network computers as to the correct state of the data on the network). For example, Double-Spending, a problem unique to digital currencies because digital information can be reproduced relatively easily. Today, Blockchain networks rely on a mathematical solution (called “consensus algorithm”) to resolve such conflicts.
Operational Cost – Centralized Apps vs. DApps
Operating applications come at a price. Though many of the Centralized Apps (e.g., BBC, CNN, Fox News) are free to end user, they adopt different monetization strategies for revenue generation
- Free Websites
- Selling user behavioral data
- Advertisements (e.g., Facebook, Youtube)
- Paid Membership Websites (e.g., video streaming services like Netflix, Amazon Prime Video)
Whereas, most of the DApps today require payment (in cryptocurrencies) by end users to the miners (computers participating in the Blockchain network) as they contribute their computing power for the operation of the network.
But, the monetization strategies of free websites adopted by Centralized Apps cannot work in DApps to offer the service free for end users because,
- All user behavioral data stored on the network is public
- Advertisements require a centralized authority