The term “digital wallet” is more popular than ever before thanks to the introduction of blockchain technology. These handy protocols largely eliminate the need to carry your traditional wallet. Instead, digital wallets store all of your valuable information via an App. Digital wallets also go by the name “e-wallets.”
Today’s Digital wallets can serve a multitude of purposes. These mobile applications allow you to upload items such as your driver’s license, gift cards, credit cards, tickets for entertainment events, and transportation passes. In this manner, digital wallets simplify your daily activities. You gain added security knowing you don’t have to carry your original documents. Additionally, you can recover lost data via backups. Try doing that with a lost wallet.
How Does a Digital Wallet Work?
Thankfully, digital wallets aren’t complex in nature. In most instances, you just need to download a digital wallet mobile app to get started. These mobile wallets are ideal for a couple of reasons. For one, they can function on nearly any smart device. These devices include smartphones, tablets, and smartwatches.
For those concerned about keeping all this data on their mobile device, there are also CPU-based versions of digital wallets available. These platforms are not as popular as their mobile counterparts. However, they are a bit more secure, especially from loss or theft. Cryptocurrencies such as Bitcoin, offer CPU digital wallet options to users as a more secure alternative to mobile apps.
Where Can I Get a Digital Wallet?
Nowadays, digital wallets are more available than ever before. You can find these applications in a multitude of places. One of the first places to locate a reliable digital wallet is from your bank. All major banks offer some form of a digital wallet to supplement their banking services.
Additionally, there’s also no shortage of mobile wallet options available from third-parties. Simply go to Google Play or the Apple Store and you are met with a variety of popular options to choose from. Importantly, always do research on e-wallet app providers prior to downloading their product. Remember, this app will host tons of private and important data for you. You need to be sure you only go with the trusted alternatives.
In the case of cryptocurrencies, there are additional options to consider. Usually, the wallet provided by the crypto’s developers is the best option. It will be the most secure. However, it may not provide you with all the flexibility you may require. Luckily, third-party developers have also introduced a number of reputable multi-crypto options for you to consider.
Using a Digital Wallet for Everyday Purchases
To use your digital wallet to make everyday purchases is simple. The first step is to find a merchant that accepts digital wallet payments. This step is easy enough. Simply look for a digital wallet symbol on the merchant’s POS. Importantly, there are usually two types of digital wallet POS systems in use today – contactless and magnetic.
Contactless terminals will allow you to conduct transactions via NFC, Bluetooth, WI-FI, or some other form of wireless transmission. Near Field Communications, or NFC technology is one of the fastest-growing types of mobile wallet tech currently in the market. This technology allows you to effortlessly send funds simply by being in the vicinity of the POS. Comparingly, most other forms of mobile wallet transactions require you to hold the phone up to the POS directly to complete the transactions.
After locating a participating retailer, you’re ready to put your mobile wallet to use. Simply hold your Smartphone to the POS and await an approval prompt. Once the prompt ques, approve the transaction and your transaction is complete. It’s as easy as that.
Digital Wallet at ATMs
Digital Wallets also make ATM visits more pleasant and efficient. Similarly to a POS, you don’t need to physically handle any items other than your phone to conduct your transaction. Simply, hold your smartphone near the ATM and wait for the prompt to appear. From here you can manage your account and receive cash from the ATM, all from the security of your smartphone. Importantly, this feature continues to gain popularity during the Coronavirus pandemic. Now, more than ever, touchless consumer options are ideal.
Advantages of a Digital Wallet
Digital wallets bring some major advantages to the market. For one, e-wallets provide users with more security. Have you ever lost your wallet? Can you remember that feeling you got realizing that all of your personal and sensitive information was now floating around free in the world? You can eliminate that scare with a digital wallet.
Digital wallets incorporate various security protocols to ensure that only the rightful owner gains access to the information within. Depending on your wallet provider, this security could entail passwords, fingerprint or face scan technology, 2-factor authorization techniques, and encryption.
You gain a lot of organization with a digital wallet. All of your information can be accessed in a convenient manner. No more digging through your wallet or purse to locate that one membership card you barely ever use, but now you need so badly. No more lost or forgotten ATM or credit cards.
Perhaps one of the most important reasons to consider a digital wallet is the fact that these apps are just so much easier to use than traditional wallets. Aside from not having to carry a bulky wallet with you, you also gain the ability to effortlessly make payments via your phone. Once you have your wallet set up with all of your payment info and membership cards, you can realize some real savings. Now, you always have your discount information on hand.
Digital Wallet Types
Today, there are all types of digital wallet providers at your service. However, due to the sensitive nature of the information in your wallet, including the ability to access your bank account, It’s important to stick with only reputable brands. Here are the top digital wallet choices:
Non-Crypto Digital Wallet Options
When you hear the word “digital wallet” you may assume that this term is exclusive to the blockchain space. In reality, digital wallets evolved separate from blockchain technology, although during the same time frame. Major financial providers have always been interested in ways to simplify user transactions. Consequently, digital wallets were always a topic of interest for financial service developers.
Today, consumers have access to more digital wallets than ever. New providers continue to enter the space, all with their unique features and settings. As the space gets more crowded, it’s important to recognize the pioneers in the sector:
PayPal One Touch
The PayPal OneTouch platform comes from one of the oldest major digital payment companies in the world – PayPal. As such, this platform leverages the network of this established provider to give you the ability to use your e-wallet nearly anywhere. Additionally, the platform streamlines PayPal’s most popular services. You can send, receive, and request funds directly from the wallet’s interface.
Venmo is one of the most popular digital wallet apps in the world. As of 2019, the payment app registered over 40 million active users. One of the best parts about Venmo is the fact that many businesses have embraced the app. This support from the public and business sectors pushes mobile wallet adoption to new heights.
Venmo became so popular thanks to a variety of reasons. Importantly, Venmo provides free bank transfers for users. The average bank transfer time can take 3 days with the app, but you can expedite the funds for an extra 1%. Notably, PayPal purchased Venmo in 2016 as part of the $800 million Braintree acquisition.
Samsung was one of the first firms to recognize the need for more digital wallet options in the space. As such, Samsung Pay entered the market way back in 2011. Today, the platform is stronger than ever. You can pay in person, on the app, or online using the interface. The only downside to the platform is you must own a Samsung Smartphone to utilize it.
Apply Pay came about as a response to Samsung Pay. This e-wallet includes all the features you would expect from one of the most recognized names in the tech industry. Per company policy, Apply Pay is exclusively for iPhone or Apple Watch users. The platform allows iPhone users to make in-store and online transactions directly from their devices.
Apple Pay has led the way in terms of security in the sector. The platform incorporates a built-in ID verification system. The system requires you to provide a Face-ID or Pin code to confirm transactions.
The eWallet app is an extremely versatile app that is available on Apple, Android, Mac, or Windows desktops. This unique platform doesn’t fit the normal functionality of a digital wallet because you can’t send or receive payments. However, the platform can store all of your sensitive financial information in a secure online location that you can access from any device globally.
Along with the ability to hold your credit and debit card information, eWallets can store your Passports, Insurance cards, Loyalty program cards, Library cards, and even your Airline frequent flyer cards. All of this functionality will cost you around $9.99.
Crypto Digital Wallet Options
Digital wallets are a core component of the blockchain infrastructure. They are the main interface for cryptocurrency interactions. Consequently, these digital safes are meant to keep your private keys stored securely. Additionally, they interact with different components within the blockchain ecosystem to facilitate transactions
Most large scale cryptocurrency projects such as Bitcoin, Ethereum, and Monero provide a native wallet. In most instances, the developer wallet option is the most secure. You can send, receive, monitor markets, and even stake your coins to earn more depending on the type of cryptocurrency you hold.
Third-party digital wallets designed to support cryptocurrencies are the most popular option. These wallets provide users more interoperability in the market. For example, wallets such as Jaxx, allow you to store multiple cryptocurrencies in the same wallet. You can also access valuable market data including volume, news, and block explorers.
Digital Wallet Concerns
One of the main issues surrounding digital wallet adoption stems from technological restrictions, not from the protocols, but of the devices they run on. Basically, even the best digital wallet in the world is useless if your phone battery dies. You may have dealt with a declined or lost credit card in the past, but imagine one that needs to charge before you can use it. In extreme situations, users could be left without access to their funds.
The Traditional System Still Works
Another major roadblock facing digital wallet adoption is the fact that most people still prefer to use plastic and cash. Studies have shown that consumers feel no real need to upgrade their payment systems at the moment. In fact, 3 out of 4 consumers don’t see the point in the upgrade currently.
According to research fielded by YouGov, 43% of consumers don’t think mobile wallets are secure. Additionally, around 38% are concerned about losing their device. Your mobile wallet won’t be much help to you if you can’t locate your phone.
Digital Wallets – The Future of Finance
Despite these concerns, the digital economy requires digital wallets to function. You can expect to see these protocols continue to be a critical component of the financial sector moving forward. For now, the blockchain revolution appears to be pushing digital wallets into the spotlight yet again.
What is Distributed Ledger Technology (DLT)?
Distributed Ledger Technology (DLT) is one of the fastest-growing tech sectors in the world. While most people consider the terms blockchain and DLT as interchangeable, this is not the case. In fact, blockchains are just one small portion of the DLT sector. Importantly, a distributed ledger is a database that exists in duplicate across multiple points of a network.
As the name suggests, the main characteristic of these networks is their decentralization. Consequently, all DLTs contain the technological infrastructure and associated protocols required to run a distributed network. These processes include the ability to collect, validate, and access immutable data across several nodes of the same network.
How Distributed Ledger Technology Works
DLTs can function in many different ways. However, all DLTs rely on some form of consensus to confirm the state of the network. A consensus mechanism is a protocol that allows network participants to validate the network’s state. In terms of blockchain distributed ledger technology, the most common forms of consensus mechanisms are the Proof-of-Work (PoW) and the Proof-of-Stake (POS) systems.
Both of thee mechanisms accomplish the same task, albeit through different means. In a PoW system, network nodes compete to solve a complex mathematical equation. The first node to complete the equation gets to add the next block to the blockchain. This process is very secure but it does require intensive electrical usage. These high energy demands led developers to seek viable alternatives.
In a PoS system computers still compete to add the next block, but in a different manner. Users validate blocks utilizing a staking mechanism. Staking is the act of placing your coins in a synchronized network wallet. The nodes with the most coins and the longest staking times are more likely to get to add the next block of transactions and receive the reward.
Benefits of Distributed Ledger Technology
The benefits of DLT are too immense to ignore. DLT networks provide a transparent and secure method for businesses and individuals to conduct true peer-to-peer commerce. These systems provide effective management of dynamic data at levels that were unimaginable just a few years prior.
DLTs are a huge upgrade over centralized systems for many reasons. For one, these networks supply an immutability and transparency record of all transactions. In a public DLT, anyone can go into the network and verify what transactions transpired. This openness affords users more confidence.
Decentralization underpins the whole concept of a DLT. These networks are more secure because they remove any centralized attack vector. In a DLT network, the risk shift from one centralized target over to thousands of smaller vectors. Since these smaller nodes don’t possess vast amounts of valuable assets such as a central governing authority, they are less likely to experience a major attack.
Additionally, DLTs utilize high tech security to ensure their network remains pure. Nodes that enter malicious or false data get expelled from the network immediately. This strategy helps to streamline the entire consensus process.
The trustless nature of DLTs makes them an attractive alternative for firms seeking a secure network solution. DLTs such as Blockchain networks eliminate the need for third-party verification systems. Since each of these systems add more costs and time to each transaction, eliminating them increases efficiency significantly. Companies understand the peer-to-peer nature of these networks makes them more affordable to run than a centralized system.
Differences between Blockchain and DLTs
As of recently, the terms blockchain and DLT seem to have been muddied. Understanding the differences between these terms is an important step in becoming a more informed investor. Think of blockchain as only a tiny section of the distributed ledger sector. Importantly, not all DLTs are blockchains. In fact, DLTs have been around for centuries, long before the first computer ever existed.
Additionally, not all blockchains are decentralized but they are DLTs. Centralized blockchains utilize a network of nodes but they rely on a central authority for the final transaction verification. These systems are more popular within traditional financial systems because they enable the centralized party the ability to alter and correct transactions when necessary. It’s worth your time to study up on the exact differences. In this way, entrepreneurs and business leaders can determine which solution best fits their strategy.
History of DLTs
DLTs have a long and remarkable history. While the most common form of DLT spoken about today is blockchain, these systems have been in use for centuries. It’s vital to understand that blockchain tech improved upon DLTs because it was the first system to solve the double-spending problem.
Basically, electronic currencies that rely on DLTs were already around before Bitcoin. However, no one had configured how to remove the ability for nefarious actors to double-spend digital currency. It wasn’t until Satoshi Nakamoto introduced Bitcoin’s whitepaper that these issues finally came to an end and digital currencies took flight.
Some of the earliest forms of DLTs began in ancient times. Historians reported that in ancient Rome, there was a distributed ledger that allowed its citizens to make purchases in any region of the empire. This ledger helped to spur economic activity across the empire and helped Rome achieve its historic status.
Digital versions of DLTs began to pop up as early as 1991. At this time, the first concept of a DLT as its known today appeared. The first DLT was merely a concept written about in a paper by the two researchers named Stuart Haber and W. Scott Stornetta. In their paper named “How to Time-Stamp a Digital Document the two discussed procedures for certifying the creation and modification of digital documents” the basics of a digital DLT began to take shape.
In 2002 David Mazières and Dennis Shasha built on this concept with their work. These two innovative developers introduced the concept of “Building secure file systems out of Byzantine storage multi-user network file system called SUNDR (Secure Untrusted Data Repository)”. This document was the first to discuss the possibility of using blocks to organize transactions.
In 2005 Nick Szabo famously proposed one of the earliest forms of digital cash – Bit gold. His proposal was revolutionary at the time. It introduced never before seen concepts such as client puzzle functions and the Proof-of-Work function. Many of these concepts made their way into Bitcoin’s core coding.
Interestingly, many people believed Nick Szabo to be the real Satoshi Nakamoto because of these similarities. Sadly, Szabo denied that he had anything to do with Bitcoin’s creation publicly. Despite his denial, there is still a large part of the crypto community that still insists that he played a direct role in the creation of the world’s first cryptocurrency.
Bitcoin changed everything. The introduction of blockchain networks to the DLT sector was a huge advancement. It meant for the first time in history, a reliable and verifiable digital currency could function.
Notably, the birth of Bitcoin marks an uptick in DLT development globally. It provided a catapult for advancements in this sector. Today, these developments continue to usher in new and exciting DLT innovations.
Distributed Ledger Technology – Today
In 2015, the blockchain platform Iota Introduced a DLT that could leverage the Internet of Things (IoT) for validation purposes. The IoT consists of every smart device in the world. In this new type of DLT, a protocol known as Tangle would allow the billions of smart devices around the world to verify network conditions. In essence, this development created the largest DLT in existence.
Another major DLT development occurred with the introduction of R3’s Corda DLT. Importantly, Corda is not a blockchain. R3’s new system utilizes pluggable notaries to accomplish consensus. Interestingly, a single Corda network may contain multiple notaries that provide their guarantees using a variety of different algorithms. In this way, Corda is not beholden to any particular consensus algorithm.
Risks of Distributed Ledger Technology
As DLT becomes more common in the market, its important to understand that like all technology, there are some risks to keep in mind. DLTs are great at conveying and verifying data. However, there is no guarantee that this data entered the system correctly. One of the biggest issues facing these immutable ledgers is data input discrepancies.
Basically, DLTs rely on exact data to accomplish their tasks. If an employee enters in some part of this data incorrectly, it creates a ripple effect that can cascade down the network. These concerns mean that any DLT enabled firm must exercise caution to ensure all data entry occurs without errors. To accomplish this task, firms should exercise due diligence whenever they enter content into a DLT.
DLT – A Better Alternative
It’s easy to see why so many businesses continue to look towards DLTs as a way to streamline business functionalities. As such, you can expect to see DLTs become a core part of many business systems moving forward. For now, these unique networks have endless potential to alter the way the world conducts business.
What is DeFi (Decentralized Finance)?
Decentralized Finance (DeFi) is the merger of traditional bank services with decentralized technologies such as blockchain. DeFi can also go under the name Open Finance due to its inclusive format. Importantly, the DeFi community seeks to create alternatives to every financial service currently available. These services include items such as savings and checking accounts, loans, asset trading, insurance, and much more.
Importance of DeFi
DeFi continues to play an important role in the evolution of the financial sector for many reasons. For one, DeFi expands the functionality and reach of money. Since all you need to participate in the DeFi sector is a Smartphone, there is huge potential to expand the global economy. Consequently, analysts see this sector as one of the most important currently under development in the crypto space.
This commitment to the development of a DeFi ecosystem is easy to recognize. Importantly, DeFi is the fastest growing sector in blockchain. According to recent reports, DEFI tokens continually outperform their counterparts. Additionally, since this time period represents the beginning of this integration stage, the market now possesses the unique opportunity to see an entirely new industry blossom.
What are Dapps (Decentralized Applications)?
DeFi depends heavily on Dapps. To understand DeFi’s capabilities, you need to grasp the concept behind Dapps. Dapps are programs designed to function within decentralized networks. These networks can be blockchains, Tor networks, or Distributed Ledgers Technologies (DLT). The key component of these protocols is their decentralized nature. There is no central authority, corporations, or agency that monitors and approves the business functions of these applications.
In fact, Dapps require very little human intervention. Instead, these platforms integrate advanced smart contracts to streamline their business systems. Smart contracts are preprogrammed protocols that initiate upon receiving crypto to their address. Importantly smart contracts can handle a huge variety of tasks from customer approval to making payments.
Key Components of DeFi
Today, there are more DeFi apps than ever. These applications are already saving businesses and customer’s time and money. In fact, DeFi platforms have begun to emerge across nearly every financial sector. As the DeFi sector expands, it’s important to understand what characteristics all DeFi Dapps have in common. Here are the most common.
DeFi application should be open source. Open source coding refers to the fact that the coding is made public. In this way, anyone can audit it and validate its functionality, security, and capabilities. Open-source codes are far more stable and secure than private codes because of this community interaction. Additionally, it provides more confidence in the platform because users can rest assured that no hidden malicious coding is operating in the background.
DeFi provides the world with new levels of transparency. Since most DeFi apps function on public blockchains such as Ethereum, all transactions are publicly available. In fact, all activity on the blockchain is public. The main difference in this approach versus a traditional bank account is that the accounts are not tied to anyone directly. Instead, accounts are pseudo-anonymous and only list a numerical address.
While the accounts are not directly linked to anyone’s name, in particular, there are ways for researchers to figure out who owns them if required. Programs such as block explorers can help people track and trace decentralized transactions of non-privacy focused coins.
Dapps represent an expansion in the way developers envision financial platforms. Anyone from around the world can participate in DeFi platforms. You just need a Smartphone with internet access and you can enter the DeFi community in minutes.
Consequently, DeFi Dapps have the ability to provide the unbanked of the world with access to financial services for the first time in recorded history. This openness is a huge upgrade from the current banking system that leaves around 40% of the global population without any form of banking.
Importantly, when you think of unbanked populations it’s easy to picture a village somewhere in the tropics or desert but the reality is much different. For example, a recent study found that 25% of US households remain unbanked. It’s in these locations that DeFi has an immediate effect.
The DeFi sector functions without gatekeepers. As such, anyone can develop a DeFi application and offer it to the world. Additionally, anyone can participate in DeFi Dapps without concern for approval. This strategy is far cry from today’s financial system that requires potential users to traverse a myriad of regulatory verification systems before they can participate in the global economy.
Another pillar of the DeFi community is interoperability. Interoperability is critical because it ensures that as more developers enter the space, all the previous work is not lost. Instead, users can stack their DeFi products to expand their exposure to this new age economy. For example, it’s common for a single user to utilize stablecoins, decentralized exchanges, and wallets together. This strategy is possible due to the seamless integration DeFi applications possess.
Due to the open nature of the DeFi environment, developers are able to exercise more flexibility in their platforms. Users gain considerable options through the integration of third-party application integrations as well. In fact, users can even choose to build their own interfaces if they find the current options insufficient.
DeFi in Lending
One of the sectors most affected by the introduction of DeFi is the lending sector. If you have ever applied for a loan, you know the process is time-consuming. Worst of all, you are forced to work with lending companies specially designed to maximize their returns. Luckily, the DeFi community has come up with some interesting ways to improve this market.
The Compound Dapp showcases the true power of DeFi and how it has the ability to transform how the world envisions the financial market’s role. Compound allows users to lend their crypto out to other users. In exchange for providing the loan, users receive interest in the form of cryptocurrency. Importantly, the platform utilizes smart contracts to match lenders and borrowers. Additionally, these smart contracts automatically make interest adjustments based on the market’s current state.
Many consider decentralized exchanges as the logical next step in the evolution of the crypto sector. These peer-to-peer trading platforms provide users with a more streamlined UX , tighter security, and more flexibility. Traditional exchanges function via a centralized organization that facilitates, monitors, and approves all trades within the platform.
The problem with this approach is that it leaves too many attack vectors open. Hackers can target the exchange and make off with millions. A quick Google search demonstrates numerous examples of exchange hacks in which the central organization suffered huge losses. In many instances, these firms were forced to discontinue operations due to the losses.
Decentralized exchanges eliminate many of these concerns. When a user exchanges an asset via a decentralized exchange, the platform never holds the assets directly. Instead, smart contracts are used to enable a simultaneous wallet-to-wallet swap. In this way, there is no main point of weakness within the platform for a hacker to exploit.
The Uniswap platform introduced an innovative mechanism known as Automated Market Making. This protocol enables near-instant settlement between parties. Importantly, the protocol is set to close trades as close to the current market value as possible. You can even lend out your crypto and earn some interest via the platform’s Pooling feature.
New Age Savings with DeFi
DeFi enables some of the most basic financial actions to regain a new life. For example, the PoolTogether Dapp is a platform that savers can meet up at and participate in a no-loss game. In the game, everyone deposits crypto into an interest gaining wallet. At the end of the month, one lucky winner walks away with all of the interest earned. Amazingly, everyone else leaves with their initial investment in place.
DeFi Prediction Platforms
Another interesting development in the sector is the birth of prediction platforms. A prediction platform is used to analyze the current public opinion of a certain event. Tapping into the wisdom of the masses can be a valuable tool for businesses seeking more market insight.
The platform Guesser allows you to make predictions and examine the results of others in the pool. Critically, you even earn crypto for your participation. Simply put an amount with your prediction, if you are right, you earn extra crypto for your wisdom.
How DeFi is Here to Stay
As the main systems of our society undergo a transformation towards decentralization, there will be more demand for DeFi Dapps in the future. These new-age applications continue to disrupt the current business systems in remarkable ways.
Soon, decentralized applications will set the new standard for the economy moving forward. Consequently, the global economy could receive a huge boost in participation in the coming years. For now, DeFi provides the world with a glimpse into a more democratic existence.
What are Dapps (Decentralized Applications)?
Decentralized applications (Dapps) continue to change the world around us in remarkable ways. These new-age programs provide users with more functionality and security than ever. Additionally, these applications feature a robust design that is meant to leverage the decentralized nature of blockchain technology. As such, these programs run on a blockchain or P2P network of computers instead of a single computer.
Dapps are Decentralized
When you think of a traditional software program like MSWord, it’s important to understand that the protocol resides on a single computer system. Even if you are using the online version, the actual software is operated by a central organization, in this case, Microsoft. Consequently, Microsoft has full control over the application and its use.
This control provides the group with full authority over the app. Importantly, centralized apps, such as Facebook, require this style of structuring to function correctly. The organization plays a pivotal role in these software systems. If it was attacked, damaged, or removed for any reason, the system would fail to operate.
This is why Dapps are decentralized.
While Dapps can come in all shapes and sizes, they all share some common factors. Firstly, all Dapps are decentralized. Decentralization implies that all the application’s operations must be stored on a public blockchain. Next, Dapps incentivize users to participate in their network. In most instances, these incentives include payment via some form of cryptocurrency. It’s very common for the application to create a native utility token to facilitate this process.
Paramountly, Dapps utilize some form of a consensus mechanism to ensure the validity of the network. In a consensus mechanism, the network’s participants act as validators. They are also known as nodes or miners because they receive a reward for their efforts, like mining for gold. Nodes are who validates new transactions. Additionally, one of the nodes eventually is who gets to add the next “block” to the “chain” of transactions. Ideally, a Dapp will also feature an open-source protocol.
Dapps and P2P Networks
All Dapps run on either a P2P network or a blockchain network. A P2P network is a network that allows users to exchange data and services directly. In the case of websites, you can think of streaming websites such as Popcorn Time. When users enter the Popcorn Time P2P Tor network they receive access to a variety of other users who are offering downloads. The user then chooses which user to download the data from and a direct connection is established between the two parties.
In a blockchain network, there is no central point of control. There is no company that ensures the blockchain is running correctly. Instead, every computer on the network works together to secure the network. In most instances, the software is open source. Open-source software is generally more secure because it allows the community o test its capabilities. In this way, blockchain technology creates a truly decentralized experience for participants.
Dapps vs. Regular Apps
To put the power of Dapps in perspective, let’s imagine that you just placed a post for your new political book on Facebook. However, when you go back to check on the stats for your post just a few hours later, you realize the post was removed because your book’s content violated Facebook’s new terms of service.
In its centralized network, Facebook is the entity in control of the network. In other words, they are the king of the content provided. If they deem that what you have to say doesn’t fit into their narrative, they have every right to kick you out of the platform. The same way you could ask someone to leave your home if you disapproved of their conduct.
Dapps function much differently. If Facebook is like your home, think of Dapps as a public park. There is no central governing authority to tell you that your post must go. In fact, due to the immutable nature of blockchain technology, your post about your book will never come down.
Dapps Current Applications
The first Dapp to enter the market with success was Bitcoin. As such, Bitcoin is a self-sustaining public ledger. It is immutable and decentralized. Even more important, is the fact that Bitcoin entered the market as a direct response to the centralization experienced within the traditional financial sector.
Ethereum Changed the Game
If Bitcoin lit the Dapp candle, Ethereum poured gas on it. Ethereum’s whitepaper states that this cryptocurrency is a “protocol for building decentralized applications.” Every aspect of Ethereum’s network focuses on reducing development time, improving security, and ensuring scalability.
Ethereum changed the Dapp game forever. This unique platform introduced a new programming language specifically to simplify Dapp programming. Additionally, Ethereum developers can utilize the Turing-complete Ethereum Virtual Machine (EVM) to create smart contracts in minutes.
Brave New Browser
Today Ethereum Dapps dominate the market. Applications such as the Brave New Browser utilize ERC-20 compliant tokens to accomplish some amazing things. In the case of the next-generation browser Brave, users receive BAT tokens for their participation. Brave users actually receive payment for their data. Additionally, they gain far more control over their information. Users can decide who, when, and what to share. In this way, the Dapp Brave is revolutionizing what it means to surf the net.
In another perfect example of the added capabilities that Dapps bring to the market, the platform STORJ allows users to rent out their unused computer space. The application helps users and those seeking more storage meet up and exchange services. In the end, one party receives computer storage capabilities at a fraction of the normal market costs, while the other party earns cryptocurrency for providing the space.
Summary – Dapps Potential
The future potential for Dapps is undeniable. Every week, new and exciting projects emerge in the market. As such, you should expect to continue to see these protocols integrated into every business sector over the coming years.