The Future of the Internet
As promised in the last article, this time we’ll cover Decentralized Apps, or Dapps for short. We’ll cover what they are, and why we believe they’re going to completely change the consumer product landscape.
To understand what a Dapp is, you can start by thinking of a regular application, like Facebook, eBay, Gmail etc. Currently, these apps are built in a way that where everything is stored on the respective company’s servers, alongside maintaining full ownership and control of both the app itself and the data the users pass in as they interact with it. All companies empowering these apps have one thing in common, they are all some kind of a middle-man. Let’s see what that means by looking at the examples I mentioned above.
- Facebook — A middle-man that takes the data of its users (posts, likes, etc.) and sells it to advertisers. These advertisers pay directly to Facebook while they are really just based on the users’ content. In fact, we can say that Facebook is a middle-man selling the data of its users and takes 100% fee from the revenues. Facebook is just an example of a middleman that belongs to the category of social networks, this method is what empowers companies like Twitter, Instagram, YouTube and so forth.
- eBay — A middle-man who matches buyers to sellers and profits from transaction fees. Here, the role eBay is playing is slightly different, as it is also serving as a trusted authority which is in charge of the money involved in the deal, as well as supervising the platform. In many ways it acts like an escrow service.
- Gmail — Acts in a way which is similar to Facebook, Gmail is a product offered for free and collects the data of its users, then sells it to advertisers and keeps the revenues.
The biggest innovation of the Blockchain technology is it eliminates the need for a middle-man. In Bitcoin, it enables direct payments and eliminating the need for trusted entities like banks. When adding smart contracts like in Ethereum, it enables us to implement these concepts in every aspect of our life by creating dapps.
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Dapps are much like regular apps in their end-user utility but instead of giving our data to Facebook or trusting eBay (and paying it fees) we can communicate directly with each other and get rewarded for our work.
For example, we can take the Facebook platform and implement it on the blockchain. This will give the users full ownership over their data and the content they create and will allow them to sell it directly to advertisers and get paid directly for that, or at the very least see who accesses our data. With recent events such as the Facebook & Cambridge Analytica Data Fiasco, the benefits of decentralized applications is becoming much more inherent.
Leveraging smart contracts, here is how the foundational technology of decentralized applications can make this new economy possible:
- An independent entity which can interact directly with money, therefore it eliminates the need to trust a middle-man (like eBay) to handle that.
- Autonomous, meaning it can run without any official “owner”. There is no one in control of the code neither on the data.
- Runs on a decentralized environment — instead of running on a single server of one entity it runs over a decentralized network. This keeps it more immune to DoS attacks as well as lots of other security vulnerabilities.
All these make smart contracts the perfect infrastructure for developing dapps. It can be thought of like server (back-end) in a regular app but here it is trust-less and decentralized.
Dapps can create a completely new economy where apps are running and being completely maintained by their users. This presents us a whole new economy where 0% fees and 100% user revenue is achievable. Think about Facebook financially rewards users activity or eBay taking 0% fees.
The current problem Dapps are facing today is scalability. Currently, blockchains are slow compared to their centralized alternatives. But this seems like a minor barrier which many people are working on to solve and improve, from Lightning Network to Sidechains, there are lots of proposed solutions to solve this. The two I find the most fascinating are Plasma (a proposed solution by Vitalik Buterin and Joseph Poon) which is the most interesting solution I saw, and Loom Network (loomx.io) which allows Dappchains to scale dapps. The reason I find Loom so interesting is because unlike lots of solutions out there, this one is actually live on the Ethereum network and can be used right away.
As final thoughts, I see Dapps as the new reformed Internet built on the ideologies of decentralization and bringing the power back to the people. I’ve attached a list with a few Dapps which are already ready to use (and what regular Dapps are they aiming to replace). On the next article, we will dive more to how Dapps work and how you can start using them.
- Cent — Quara like app:
2. Lerroy — Twitter-like app:
3. Hong Bao — Kickstarter like app:
4. Ethlance — Fiverr like app:
5. DelegateCall — StackOverflow like app, the first Dapp on Loom Network
6. Rare Bits — Digital assets and collectibles marketplace
7. CryptoKitties — Collectible virtual cats on the blockchain
8. Crypto Fighters — Digital fantasy fighters on the blockchain
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This guest article was written by Ben Kaufman, founder of BitCampus.io
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