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October 20, 2020

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How Does Decentralized Application Work?

Do you think you have control over the data you usually share on various websites these days?

After Bitcoin, Ethereum, an open source decentralized blockchain, is known as a popular cryptocurrency platform.  It is widely used because of its feature of using the blockchain to limit the digital design (the designs which people want to correct). Ethereum is now a considered more than a platform where one can develop and launch distributed applications successfully in a decentralized manner.

Ethereum offers a decentralized app platform where anyone can launch their apps or dapps anonymously as no one will require user’s information to manage their data and money related apps on the platform.  Users and providers can use the app services/products directly.

For instance, a major social media giant Twitter has some censorship regarding its content. However, one can use this design to create a decentralized twitter which does not have censorship and once you publish something there, neither you will be able to erase nor the microblogging system managing it.

There are numerous definitions of a dapp as it is relatively new and still developing through its initial stages. Here are some examples which proves that it is an open source platform and have not experience failure in its execution:

First type is known as “Decentralizing all the things”. It refers to a new technology where users will be able to process contracts with other users through the networking distribution system. Ethereum usually distributes the dapps into 3 major types i.e. apps for managing money, apps involving money transactions and last type is the “other” category which refers to governance and voting system. Although this might feel electrifying and exciting for the users, yet users may not be able to build bigger apps as the platform’s execution and handling system is somewhat narrow at this moment.

There is another of type which refers to money and its relevant data information coming from outside of the blockchain platform. For instance, there is a agricultural based insurance application which is dependent upon the weather forecast coming from outside courses. It is just like a farmer is farming and predicting whether there will be draught or not based on the weather forecast taken from the outside sources. To process these smart contracts, this platform use “oracles” to pass on information coming from the outside world. However, it is important to note that some developments working in Ethereum are trying hard to be able to execute these processes in a decentralized manner so that It can be done independently and conveniently.

However, the question remains that whether Ethereum will be able to get away with financial authorities just like Bitcoin did and will it be possible for other companies and businesses as well?

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