Simple guide to Ethereum decentralised apps for beginners

Blockchain technology has revolutionised finance through Bitcoin (BTC) and altcoins designed to be a mode of payment as well as a store of value replacing modern banking. Its next development was heralded by Ethereum (ETH) introducing smart contracts. It is the blockchain technology for building a network of decentralised applications (dApps). 

This new creation proposes the concept of web3.0 to replace the current status of the internet (dubbed web2.0) with a more decentralised network. With it, you can use applications the same way you are already used to but on an ‘internet’ that is not owned or controlled by any entity. Data travels around the world through nodes supported by common folks providing the network’s processing power through mining or stakeholding.

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What are dApps?

Regular apps you are familiar with such as Facebook and YouTube are built on the internet. The data collected and sewn together to make these apps work are stored in servers owned and managed by an entity. It can be a company, a corporation, or a government institution. In the aforementioned examples’ cases, Facebook is owned by Meta while YouTube is under Google. 

Decentralised apps or dApps are built on peer-to-peer (P2P) networks like a blockchain. The creator can own and manage any dapp but it won’t be kept in a single server owned by a bigger entity. Instead, the data is spread across all nodes or everyone working as a miner or stakeholder owns a copy of all the data. Every action made in a dApp, either by the owner or the users, is verified by all nodes. 

How does a dApp work?

The best way to answer the question ‘how do dapps work?’, it’s better to explore the basics of cryptocurrency in general. A blockchain is a P2P platform composed of interconnected nodes, each of which contains data that make up the contents of the whole network. No single entity can overwrite or terminate data. If a node is removed from the network, then any dApp can still operate because there are copies of its data held by others that are still online. 

One of the most commonly used examples of dApps today is BitTorrent, a file sharing app with a download client. All of the files are archived on the network as torrent data. If you download it, then the BitTorrent client on your computer is getting pieces of data from random sources called ‘seeds’. Once it’s done downloading, your BitTorrent on the client is marked as ‘seeding’, which means your computer is now a source for files when someone else is trying to download their own copy. As long as there is a seed, then the file exists online and you can still download it.

The answer may vary when asking ‘how to use dApps?’ because each one is different. Their accessibility is based on what kind of people the app is designed to help. In BitTorrent’s example, you can use it by installing the client and looking for seeded files from almost anywhere on the web2.0 or web3.0. Other dApps are meant to help crypto transactions and they are only intractable using web3.0 wallets like MetaMask or Coinbase Wallet. If you were to ask ‘what can you use to interact with dApps?’ then you can find a wide selection to choose from.

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Key advantages of dApps over traditional apps

The advantages and disadvantages of dApps are easy to explore because they share the same potential as cryptocurrencies. Firstly, the most important is user privacy because you don’t need to verify your identity to be part of the blockchain. Unlike most social media services, dApps’ cryptography protects its users from getting their identities revealed unless you want to share it. This prevents identity theft, cyberbullying, or stalkers from attacking you.

An advantage dApps blockchain has over the internet is speed. The data isn’t held by just one server that is possibly ageing or neglected by its keeper. It has a copy across multiple nodes and the network’s algorithm prioritises the most efficient route the data can take. Ethereum dApps also have multiple levels of security features keeping hackers out of your devices and personal space.

Many developers are making dApps for beginners, making user-friendliness among the most important features. Thus, these alternatives to traditional applications are becoming accessible enough to be full replacements but with better security and efficiency. 

Top platforms for developing dApps

Platforms for dApps mean networks meant to serve as the foundation for dApp development. That includes powerhouses like Ethereum. It’s the first of its kind and is credited as the most progressive because of its continuous updates that just improve the network for all users every time. 

Ethereum is not alone in the effort to build web3.0 that everyone is anticipating. You can see other networks following its trail like the EOSIO (EOS). The only difference is Ethereum’s focus is more universal. Its network has tools designed to make dApp tokens with any kind of functionality whether it’s for business or entertainment. EOS, on the other hand, revolves around business and finance.

TRON is another top-rated network for software development. It’s focused more on entertainment like gambling or traditional gaming using various kinds of assets. TRX is its native token used to power everything but every app made on it can develop its own dApp crypto for gaming purposes.

How many dApps are on Ethereum?

As the first of its kind, Ethereum takes the lead in the creation of web3.0 with 2,855 dApps active as of 2022. Within the same year, EOS and TRON each had 686 and 564 active dApps respectively. Some of these can interact with each other through various services that allow cross-chain exchanges. Thus, users can benefit from the expansion of all platforms. 

The best dApps on Ethereum right now 

All of the dApps Ethereum has are either built to provide solutions for ETH users or become independent applications for entertainment. All of them are helpful but a lot of them have niche uses that beginners won’t understand. Here are some of the best decentralised apps on Ethereum based on their popularity, accessibility, and universality of uses:

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• PancakeSwap and UniSwap - Crypto swap

One of the most important Ethereum decentralised apps is the swap pool, an autonomous exchange for converting cryptocurrencies. PancakeSwap and UniSwap are different dApps with the same functions and they are the best at giving this kind of service. You can exchange any Ethereum-based crypto (also called ERC-20 tokens) on the pool and you get an equivalent exchange based on the current market rate. 

• Axie Infinity - Video game

There are plenty of play-to-earn (P2E) games built on the Ethereum network and the most successful of which is Axle Infinity. It features creatures known as Axies that are non-fungible tokens (NFT) that you can sell, buy, and breed to make more of them. This app generates smooth love potion (SLP) as cryptocurrency which can also be sold at exchanges. 

• MakerDAO - Financial system

MakerDAO is a decentralised organisation where you can be part of a group deciding on which project to fund or how the Ethereum network should develop moving forward. You can use its services to ask for loans or lend money for financing projects. It uses its own cryptocurrency called DAI as the mode of payment on the platform. It’s a stablecoin pegged to the United States dollar (USD).

• Yearn Finance - Lending and trading

Unlike MakerDAO, Yearn Finance lets you be an independent lender or trader rather than someone being part of an organisation. This gives you full control over your money and transactions using a user-friendly platform designed to manage your portfolio. 

• OpenSea - Marketplace

OpenSea is a marketplace and is the most straightforward answer to the question ‘how do decentralised dapps make money?’. The products primarily sell NFTs like art works, video clips, music, and video game assets for Ethereum-based P2E games. You can mint your own NFTs and sell them here as an artist, a gamer, or a collector. 

A short overview on how to make dApps 

Another important factor to address in answering the question ‘what are dApps?’ is how different it is from regular applications. You can build any kind of software on the Ethereum network but you have to determine if it needs to be decentralised or if being centralised would be more manageable. 

Key takeaways about dApps

The simplest answer to ‘what are dApps?’ is describing it as similar to a regular application but with the benefits of blockchain technology. It is more cost-efficient to build or maintain, has more services it can interact with, and it’s more secure for protecting privacy as well as money. The slow growth of web3.0 is bound to make dApps a lot more popular than apps as the world knows them today. You can be one of the pioneers for the new generation of the internet.

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Words by: Clarence Clarke