What Is a Decentralized Application (dApp)?


Blockchain is opening up a major technological revolution, and accordingly, many dApp projects are born, attracting many investors and application developers. So, what is a dApp? Why does it interest so many people? Let’s find out with CoinMinutes right away through the article below.

What Is a dApp?

A dApp (Decentralized Application) is a decentralized application built on a decentralized network with support for Smart Contracts and a Frontend interface for users. These applications focus on addressing issues within a specific domain.

Because decentralized applications are built directly on blockchain platforms, the characteristics of these decentralized applications depend on the specific blockchain platform. For example, transaction speed, TPS (transactions per second), scalability, stability, and other features will be influenced by the attributes of the underlying blockchain platform.

dApps can be understood as similar to applications on your smartphone, the difference is that instead of being processed on a central server, dApps will be processed on the Blockchain. dApp provides games, entertainment, social networks, borrowing and lending platforms, and financial services… dApp was born to help users access decentralized financial services (DeFi) in an easy way.

How Does dApp Work?

dApps are open source, so the consensus of a large number of users decides any changes. This helps everyone to check, modify the source code, and participate in developing dApps if approved by the community.

dApp operates using Blockchain technology, typically Ethereum to store data in a decentralized manner, distributed across many network nodes, using a unified mechanism such as PoW (proof of work). From there, many computer nodes cooperate to achieve a common result, instead of depending on a single central server. dApp data, records, and activity logs are stored decentralized on Blockchain, ensuring transparency and security.

dApps provide the same user interface and experience as traditional web and mobile applications, but the latter operate in a decentralized manner, sharing control and authority across the network.

Why Use a dApp?

One of the outstanding features of dApp compared to conventional applications is its decentralization. Because of this feature, each stakeholder can participate in decisions and there is no need for a third party because there is a smart contract.

dApps are also not susceptible to cyber threats and attacks because they do not use physical devices to operate. Therefore, these networks are more secure and free from downtime, you can access decentralized applications at any time, and it will not interrupt your experience.

Another reason dApps are worth using is that they are applicable to many industries, such as gaming, entertainment, governance, finance, medicine, and even file storage. And when using dApps, you will simplify various processes without having to go through many steps.

Pros and Cons of dApp


  • Censorship resistance: dApps exist in a decentralized manner, so it is difficult for organizations, governments, or individuals to intervene in network control and change the application at will.
  • Transparency: All activities are performed through the open-source code of the dApp and public data on the blockchain. This encourages the widespread development of the dApps ecosystem, with developers building better dApps in the future.
  • Continuous operation and reduced risk: The Peer-to-peer system ensures that dApps continue to operate even when individual computers or departments experience network problems.
  • Promote user privacy: With decentralized applications, users do not need to submit their personal information to use the functionality the application provides. 


Besides the pros, dApp still has some cons as follows:

  • Scaling problem: Because it is newly launched, if an application requires high computation, the dApp is susceptible to some problems such as slow speed, latency, and high gas costs and may have difficulty opening. wide scale.
  • Complex user experience: The challenges of using a cryptocurrency wallet, managing private keys, and onboarding can be difficult for new users.
  • Security and bugs: Vulnerabilities can lead to attacks, so checking the source code is important. Therefore, once deployed, a dApp will likely need ongoing changes to improve or fix bugs or security risks.

Examples and Use Cases of dApps

Financial application

dApps provide finance-related applications and they are often called DeFi applications. Its mechanism is to use Blockchains to improve more complex financial applications. Such as borrowing and lending, wills, and insurance,…

For example, the Compound application: A DeFi financial platform that allows users to deposit and borrow cryptocurrencies at interest rates that change according to the market, or the MakerDAO application, which is a borrowing system secured by digital assets to create coins. DAI stablecoin.

Semi-financial application

They are decentralized applications that both involve money, but also involve other parts, such as data from outside the blockchain: Play-to-earn Games, Bounty Programs, Airdrops,…

For example, Axie Infinity: The NFT game makes money through collecting, cultivating, and fighting the Ax character.

Other applications

Application developers are looking to create other decentralized applications such as online voting and storage applications: NFTs, decentralized autonomous organizations (DAOs),…

Democracy Earth is an example of a decentralized online voting platform.

dApp Scams

The development of dApp technology brings great potential but also has many potential risks of fraud. Fraudulent schemes such as Ponzi schemes have taken advantage of dApps to steal investors’ money. Many initial projects are just shells, with no intention of actually developing products.

In addition, fake websites and emails are also used to track sensitive information. Some dApps also contain malicious code to compromise devices and steal user data.

According to dAppRadar statistics, in 2022 alone, 312 hacks and vulnerabilities affected dApps, causing losses of up to 48 billion USD. It is important that users need to be vigilant and meticulously checked before using dApps.

Comparing Centralized vs. Decentralized Apps

Application software for centralized applications resides on one or more servers controlled by a single owner. In contrast, dApp decentralized applications operate on Blockchain or P2P networks. Users participate in transactions directly with each other instead of relying on a central authority.

With centralized applications, users interact with the application by downloading a copy of the application and then sending and receiving data back and forth from the company’s servers. With dApps, users participate in transactions directly with each other instead of relying on a central authority. This communication includes financial transactions performed without intermediaries and cross-chain bridge communication.


dApp is a big step forward in the development trend of Blockchain. Thanks to dApp, transactions become safe, and transparent and reduce intermediary costs. Above is a detailed article about dApp that Coinminutes compiled, hopefully, the article will bring useful information to you.

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Chi Do
Chi Do
Chi Do is a content writer at CoinMinutes, responsible for creating most of the content on the website, including news related to Bitcoin (BTC), Ethereum (ETH), Blockchain, Decentralized Finance (DeFi), and more. With a keen interest in cryptocurrencies since the 2020s, Chi has acquired extensive experience and knowledge in this field. Chi holds a Bachelor's degree in communication from Academy of Journalism and Communication in Vietnam.

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