How Decentralized Apps Stand to Alter Business Practices
Business is not a static environment. Neither is the world that surrounds it. Everything is constantly changing, mutating, and progressing forward.
Today, this notion is apparent in the realm of software and app development.
Nearly every media publication today is talking about cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and others. What has even more people talking, however, is the technology that lies beneath these digital currencies: the blockchain.
Blockchain technology has brought with it the unrelenting potential to decentralize anything and everything in its wake. The unbridled power that blockchain technology touts, however, is beginning to get funneled into a specific avenue of development: decentralized applications, or DApps.
DApps are a form of application framework that seek to remodel the backend structure of various digital products, services, and platforms. The groundwork on which these decentralized services are built comes from the cryptocurrency, Ethereum. Currently, there are over 1,100 DApps existing through Ethereum’s blockchain network.
While the tenants and structure of blockchain technology can sometimes be challenging to explain to the uninitiated, the same is not true for DApps as these technological models still possess the standard front-end experience that consumers have come to expect. What separates DApps from conventional applications is the backend framework that has been developed.
Instead of existing within a centralized server, DApp are housed on a decentralized blockchain, hosted by Ethereum; this arrangement opens whole new worlds of potential and possibilities for app developers.
This is represented by a statement made by Tiana Laurence, Co-Founder of Factom and the author of Blockchain for Dummies, in which she proclaimed that DApps are, “. . . the most revolutionary and controversial manifestation of Ethereum.”
To understand this sentiment further requires a deeper understanding of the core structure and business implications of DApps.
A Functional Definition of DApps
It is not by happenstance that Ethereum became the foundational resource for DApp development. In fact, this is written directly into Ethereum’s mission and vision statement:
“The Ethereum Foundation’s mission is to promote and support Ethereum platform and base layer research, development and education to bring decentralized protocols and tools to the world that empower developers to produce next generation decentralized applications (dapps), and together build a more globally accessible, more free and more trustworthy Internet.”
This clearly indicates that Ethereum has a higher purpose that merely existing as a cryptocurrency; it is attempting to revolutionize the technological landscape.
Assisting in this radical push forward is David Johnston, CEO of the DApps Fund. In a white paper produced by Johnston and others entitled, “The General Theory of Decentralized Applications, Dapps,” the authors define DApps as needing to possess several core elements in order to fall into the aforementioned category. That criteria demands that DApps must:
- Be open source and operate autonomously
- Cryptographically store the app’s data in a decentralized public blockchain
- Leverage a cryptographic token
- Generate tokens according to a standard cryptographic algorithm
Through the lens of these benchmarks, the business-oriented implications of DApps start to become apparent.
Business in the Era of DApps
Johnston articulates the potential growth of this technology structure and format when he stated:
“DApps have the potential to become self-sustaining because they empower their stakeholders to invest in the development of the dApp. . . Because of that, it is conceivable that dApps for payments, data storage, bandwidth and cloud computing may one day surpass the valuation of multinational corporations like Visa, Dropbox, Comcast, and Amazon that are currently active in the space.”
This time is not yet upon us, but there is great promise that it will be soon considering that the explosive growth of DApp investment and development continues to expand at exponential rates. This enhanced dissemination is, in part, attributable to the implementation of smart contracts.
Using smart contracts, businesses are empowered to decentralize many services the company offers in relation to voting platforms, marketing, retail, and innumerable other areas.
The allure of doing this comes through the capabilities possessed by smart contracts. These digital documents clearly define the parameters, penalties, and rules of engagement for the parties involved; standard contents for a contractual agreement.
Where the deviation occurs, however, is the way in which a contract is fulfilled. In certain scenarios, one party simply cannot determine the effectiveness or efficiency in which a goal is met. Through smart contracts, enforcement of contractual obligations is handled via software that only brings about the completion of the transaction once the terms have been sufficiently met; and it does so automatically.
This framework presents businesses with a model to reform various operational procedures related to online sales, digital identity verification, supply chain management, and other challenging or resource-intensive areas of operation.
Because of the incredible benefits touted by such a structure, futurist Garry Golden has predicted that by 2025, Ethereum will gain mainstream accessibility as, “. . . dApps emerge from individuals, businesses, civic institutions, and governments eager to develop products and services based on a radical mix of trust, transparency, and automation.”
Make no mistake; the future of DApps is by no means set in stone as a success. There are many potential unforeseen changes, challenges, and ramifications that could emerge as implementation spreads; this is the nature of every innovative technology or program.
That said, the potentials that DApps and the blockchain posses could bring about world-changing alterations that in many ways free up organizations, developers, and average individuals to interact with the digital ecosystem in entirely new and prosperous ways.
Heidi Yu is a serial entrepreneur, influencer marketing evangelist and AI enthusiast. An MBA graduate from Seattle University, she successfully founded Boostinsider at the end of 2014. As one of the few women leaders in blockchain adaptation, Heidi founded BOOSTO, an influencer driven decentralized app store that returns power to creators and makers. Heidi speaks to audiences around the world about the adaptation and the benefits of the blockchain.