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A dapp, or decentralized application, is a computer application that runs on a distributed network. Dapps are most commonly associated with the blockchain networks that support them, such as Ethereum.
Because dapps are decentralized, they do not exist under the purview of a centralized custodian or authority.
The original Ethereum white paper effectively splits dapps into three types. This includes apps that manage money, apps where money is involved (but also requires another piece), and apps designated as the “other” category, which includes voting and governance systems.
The type of app represents one in which a user may need to exchange ether as a way to settle a contract with another user.
This uses the network’s distributed computer nodes as a way to facilitate the distribution of this data.
Meanwhile, the second type of app melds money with information located outside the blockchain.
Finally, in order to execute, ‘smart contracts’ are utilized that rely on so-called “oracles” to relay up-to-date information about the outside world.
Understanding Dapps in Real World Applications
For example, a standard application such as Twitter is run by a centralized authority.
While these kinds of apps have thousands of users located around the globe, the backend of the app is controlled by a single entity.
If there is a problem with the Tweets on Twitter, the company that runs the app can delete them.
However, if Twitter was a dapp, all of the tweets that have been posted could not be deleted by the dapp’s creators.
Instead, the poster may have the option to edit their posts, but each of the various versions of a post would remain there forever.