What are decentralized applications as such?
The concept of “decentralized applications” is formulated in opposition to the currently widespread centralized web applications. Back in the early days of personal computers, stand-alone applications were omnipresent. As you might gather from its name, these are applications that were distributed on CDs or downloaded from the web and installed on a computer. Now such applications also exist – the Internet browser itself is an example. Nowadays, websites have become much more complex and ingrained in them is a new type of application – web applications. They differ from stand-alone applications in that they do not need to be downloaded, they are permanently stored on their servers. The servers still store pages for display, and at the same time, user data (the data entered by yourself) and the program code that processes and protects our data from unauthorized access. And this is a very important point to which the principles of decentralization constantly refer. With this approach, the user must fully trust the owner of the application. If the server stops working, the application is no longer available, and the users can lose their data. Worse, the owner of the application, having full access to the servers (no matter how many there are – units or thousands), can process and sell this data without our knowledge, it can get into the hands of scammers and hackers. This is where the idea comes from to eliminate the management of the application by a certain owner and share ownership between all users – the essence of what decentralized app development is for.
How is decentralization achieved in app development?
The code in decentralized app development should be open and available to anyone. Users also need to be sure that this is the exact code that works in their application. Decentralized app development is based on cryptocurrency, and the app must have its own cryptocurrency. Since the code is open, it can no longer in itself be of value for its owner. For the same reason, any coder can simply remove the lines associated with making payments, which makes regular monetization pointless. Therefore, decentralized app development must allow for constructive restrictions on some resources and generate a set of tokens – digital coins that can be used to pay for resources. Tokens can be tied to fiat money in the same third-party decentralized services, which specialize in issuing virtual currency. An example is the limited number of bulletin board spaces. The more people who want to place ads on the board, the more their price will be in a scarcity condition. Decentralized app development must ensure trust between users and smooth operations with resources, as well as make tokens visible and understandable to all users. The possibility of forgery and manipulation should be eliminated to the furthest possible extent. This is where the blockchain comes into play – it allows for decentralized transactions that help store the data of transactions without intermediaries. This type of storage guarantees the authenticity of the participants in the operation and is strongly protected from hacking. In decentralized app development, there is no central point or “location” where the critical failure may occur. In case of someone, even the lead developer, having an emergency the application should continue to work, and users’ data should remain available. The application works on the principle of a peer-to-peer network so that the seller is technically connected with the buyer directly, it does not have a central server part, which means that the network cannot be blocked or disabled. To become a member of the network, you need to download and install the application. Decentralized app development in electronic commerce
The environment in which decentralized applications work is a complex interconnected web of data and agents (actors). Part of this environment is data, value (money), identification, computing, networks. Every part of the equation must be virtual and decentralized. In this type of information economy, each user of the application is its shareholder. The more popular the application is and the more people download it, the more its value increases. Sooner or later, users will want to buy and sell digital assets for their own sake. On such exchanges, in the case of issuing many different cryptocurrencies, a special mechanism is required to convert one currency or value into another without involving a third party. In decentralized ecommerce app development, the data is to be stored directly on the merchant’s computer. To complete the transaction, Ricardian contracts or smart contracts are used: such contracts simply confirm the legitimacy of transactions and cannot be forged once signed. It is interesting to add the role of an arbitrator in the system. Any participant can be an arbitrator, the duties of this role are to resolve disputes during transactions. Obviously, at some stage, this role can be replaced by AI or a well-thought-out algorithm, but now this role must be filled by people. Arbitrators may charge a fee for participating in a transaction. Arbitrators are also ranked by rating, depending on the quality of their work. One could also implement the idea of objective ratings during decentralized app development. The application should be implemented on the Bitcoin protocol and use a micropayment to identify a participant, followed by a refund. The developers also create a web of trust algorithm, where members can lend to each other with micropayments as a token of trust. When a participant’s attitude changes, their credit of trust can be revoked. There is also a blacklist in the system, which is stored on all network nodes simultaneously, so all participants are informed about someone getting into that list. To sum up, decentralized app development is a great tool to ensure safety of transactions and its swiftness. The app, itself literally “distributed” among the users, is structurally more stable than its usual centralized counterpart. Overall, it seems like the ideas of decentralization, oddly enough, are more applicable in sensitive areas, where data security and secrecy are emphasized, and people are willing to endure some inconveniences of transitioning to it. The introduction into broad consumer segments will inevitably lead into conflict with the old routine and control mechanisms since such systems are difficult to monitor and regulate, but it is manageable if this new type of app is presented and marketed correctly.