What is a DApp?
A DApp (decentralized application) is an open source software program that runs on a distributed computing system and utilizes blockchain technology to operate without any single point of failure or control. It works as an automated trustless system, allowing users to interact with each other directly in order to complete transactions without the need for intermediaries.
Unlike traditional applications, DApps do not have centralized servers but rather run on peer-to-peer networks such as Ethereum or Bitcoin’s Lightning Network. This means that all data stored and processed within these networks can be accessed by anyone who has access to the network, providing transparency and ensuring security against malicious actors. Additionally, since data is encrypted using cryptographic algorithms it also provides privacy protection from eavesdroppers.
DApps are usually categorized into three different types: financial services (e.g., digital currency exchange), infrastructure/utility services (e.g., cloud storage solutions), and governance systems (e.g., voting protocols). Each type serves a distinct purpose while still being connected through blockchain technology; this allows them to form complex ecosystems where various functions work together seamlessly even when they are developed by separate entities with no prior relationship between one another..
