Decentralized Applications or better known as dApps while still in its infancy have staged a rapid growth and have continually been touted as the future of technology and the application landscape. And with organizations investing millions of dollars and hours of manpower in the development of a number of dApps, the future promises a world that has rapidly embraced the blockchain technology running on such promising projects.
But coming to the current scenario of dApps and its development, the technology is relatively new and the idea of mainstream adoption is yet to be born. However with a trend that points north towards rapid growth, the dApp ecosystem is evolving swiftly and with potential real-life use-cases emerging, the dApp ecosystem has thrived.
A number of dApps have made hits or misses in the blockchain industry that may or may not necessarily be mobile-based or laptop-based applications like the perception of many. Decentralized applications have a broader sense and should not be misguided with traditional applications that have a centralized architecture.
dApps are scalable running on decentralized architecture and are applicable to any phenomenon. From a decentralized cryptocurrency exchange to say a food delivery app running on a decentralized model can both be broadly covered under the dApp environment. However, both are separately related and that’s where the primary difference lies. So let’s first understand the different types of dApps:
DApps can broadly be classified into three separate categories:
Type I – Financial Blockchain Applications:
Such applications are solely financial in nature and operate using their own cryptocurrency such as Bitcoin, Ethereum, Waves etc. These dApps operate strictly within the blockchain landscape and have a distributed consensus within a decentralized architecture. Examples of such categories are world-famous tokens and coins or cryptocurrencies in general as we know them.
Type II – Semi-Financial Blockchain Applications:
While these applications find their use-cases beyond the bounds of the blockchain space, such solutions are aimed primarily for financial purposes. For instance, a blockchain-based loyalty program that offers loyalty discounts or an Initial Coin Offering that explores fundraising aspects using a native cryptocurrency token built on a blockchain platform.
Type III – Fully Functioning Decentralized Applications:
This category of dApps is where the notion lies that besides the financial industry and money, in particular, using blockchain one can tokenize everything – literally. At present, a number of dApps are being developed using this ideology and implementing ideas into potential use-case solutions. Undoubtedly, blockchain opens up astonishing capabilities for establishing a strong customer-business relationship, since the technology offers complete transparency and is extremely hard to undermine or entirely tamper-proof. Operations are easily traceable and verifiable on a blockchain and with the information distributed securely between different nodes, it eliminates the risk of a single point of failure.
Type III dApps is where the future of dApps lies and undoubtedly the technology is destined to change the course of the world as we know it. With customers and businesses relying on dApps, the sphere of our lives can be expected to become much more comfortable and secure opening up new avenues of generating alternative sources of income.
For instance, imagine your car doing trips while you’re at your office working or your spare system capacity being utilized by businesses or organizations that are in requirement, making you the beneficiary of the rewards. That’s the potential of dApps where it bridges the gap of demand and supply making sure that the platform distributes the services to those who are in need and incentivizing the suppliers of such services in the form of a digitized token. Such efficient systems have to potential to reduce operational costs drastically while adapting to the needs of the market and systematically attracting customers and generating a revenue source.
The Future of dApps:
With the current scenario of dApps and sectors where the technology has touched upon, we can expect significant changes in the following industries that include but not limited to:
DApps – The Future for these Sectors
|Finance and banking||Taxi and car rental services||Real estate|
|Healthcare||Food delivery||Online marketplace|
|Energy distribution||Insurance||Music services|
|Betting and gambling||Gaming||Human resources|
|Loyalty rewards||Labour rewards||Cloud storage|
While this definitely isn’t an exhaustive list, integrating dApps into the spheres that seem untokenizable at present is very likely to be made possible by exploring further into the blockchain space. However, if we were to discuss the most obvious developments in the near future of dApps, these are the spheres where we might be witness to landscape changes and where dApp development is underway:
Identity authentication is the single biggest challenge in today’s traditional landscape where the conventional methods are extremely time-consuming and vulnerable to external attacks compromising the personal data of millions. In the present scenario of conventional data storage methods, your data is stored at multiple but centralized systems and every time where you’re required by an entity for such information say your address, email ID or phone no., you’re required to transfer such information.
While it might seem practical, if we put it in perspective, the entire ID authentication process is flawed with duplication of efforts as you’re required to follow the authentication process each time you open up a bank account or get yourself registered for some kind of services. Moreover, while you are separately distributing your private information at multiple centralized authorities, if anyone of them were to be hacked, your data is eventually compromised.
Now coming to blockchain technology the authentication systems are far more sophisticated, universal, low-cost and secure. The benefits include but not limited to:
- Multi-level authorization
- Private keys
- Significant reduction in KYC authentication and eventually the related costs
- Universal access to information across separate business entities.
A blockchain-based authentication is universal and in the near future, there will be no need to scramble on information each time you’re required to sign up. Just your biometric data, a set of private keys and digital signature and that’s it the verification is simple and swift.
Smart contracts are the next big thing after identity authentication that significantly influences the evolution of dApps. Such reliable mechanisms ensure the transfer of digitized information after certain conditions are met in a fair, secure and transparent manner. With smart contracts evolving with blockchain, the dApp platform will have the ability to implement the most effective smart contract mechanisms that are able to meet any parameters or level of complexities or combinations and variations possible, eventually making our lives easier.
Voting and Governance:
While the financial sector and identity authentication is making waves in the dApp sphere, the blockchain has also made its way into the voting and governance sphere, with various governments increasingly showing interest in embracing the technological advancement. While there are numerous examples of failures, there is significant progress in its adoption globally and to put this in perspective, countries such as Dubai and Singapore are on its way to fully embrace the blockchain technology and become the world’s first blockchain run government.
DApps and Everything Else:
When such spheres are underpinning the importance of dApps into our lives, they don’t completely fit in the development that’s been happening in the blockchain industry. Numerous sectors where you might find the applications of dApps as a novelty are being explored and possibly being tokenized in the near future. With some time and a strong blockchain-based solution that will have made it big, it’s just a matter of time before the media catches the wind of a new success story and the blockchain world sets itself with a new record of revolutionary examples.