Visit us at Kubecon + CloudNativeCon Get FREE Pass
A blog with an introduction to blockchain, smart contracts, tokens, and decentralized apps or dApps highlighting their advantages over modern apps.
You probably hear the term “Blockchain” frequently if you’re inclined towards technology. Most of us also have a basic understanding of Blockchain, that it’s an immutable ledger shared publicly that acts as an aid for recording transactions and tracking assets in businesses. But how does this technology help create decentralized applications (dApps) by utilizing smart contracts? What are crypto tokens that reside on blockchain networks? If these questions constantly revolve around your mind, this blog will help you clear out numerous aspects related to blockchain execution and dApps. But prior to moving there, let’s try to revisit the basics.
A smart contract is an agreement between two people in the form of computer code. They run on the blockchain, so they are stored on a public database and cannot be changed. As a result, the stakeholders involved can be assured of the predefined agreements specified in the smart contracts through which transactions can be made between parties without trusting each other as they can rely on the blockchain network. Smart contracts are automatically executed once the conditions of the agreement are met. This removes the need for a third party, be it a bank, broker or government.
In simple terms, tokens can be considered to be assets.
Cryptographic tokens are nothing but rules, encrypted in a smart contract. One can access these tokens through a dedicated wallet that basically communicates with the blockchain. Additionally, the wallet also manages the public-private key pair related to the blockchain address.
A blockchain network depicts a technical infrastructure offering an immutable distributed ledger and smart contracts for interacting from the ledger to applications. The framework uses smart contracts to initiate transactions which are then dispersed to every subsequent peer node in the network. The transactions are immutably recorded on their copy of the ledger. If you are wondering who are the users of these applications – it can be end users accessing client applications or miners.
Let’s go ahead and talk about some of the real-word applications of blockchain technology. The examples that we witness across different industries might give us a glimpse of the immense power of blockchain.
Did you know that over one billion people across the world do not have a formal identity proof?
Microsoft is solving this problem through blockchain with the aim of empowering poor people, refugees, and people affected by disasters. Having an ID would mainly help in connecting them with the formal financial sector.
Microsoft aims to accomplish this objective through its Authenticator app. The unique thing about the authenticator app is that it doesn’t just use a password.
The app uses an additional layer of protection that identifies a returning user or a device via a code or a token.
Microsoft has opted for an optimal way for common people to manage their digital identities.
Patients should always have the right to accurate information in the healthcare ecosystem. After all, you must have access to matters that are related to your life. Your privacy and security of health data are of utmost priority.
Modern hospitals have moved forward from paper records, and now leverage blockchain technology to store patient data, which is obviously maintained confidential.
How would the patient access these health records? They would be assigned a unique number key for looking at health records. Additionally, the user (patient) can also manage who can view their private data. Patient diagnoses are also stored, in order to keep a track of the patient’s health history.
A completely flawless voting system was a myth. It won’t be anymore. Now, each vote would be more secure and can make all the difference thanks to the immutability of blockchain. It’ll ensure that voting becomes transparent and all the changes initiated in the network would be overlooked by regulators. Overall, we can ensure each vote is counted for and unchangeable.
A variety of new-age applications exist on blockchain technology like decentralized supply chain management, food safety, data sharing, copyright protection and many more. But, the more important question is, how do we in reality decentralize it? How can such large-scale operations be executed without any controlling authority? The answer is – dApps (decentralized applications). Let’s move on to discuss more on dApps and how they are changing the world.
Dapps or decentralized applications are quite similar to normal apps and have the same features. So, what makes it different? dApps run on the blockchain which is a peer-to-peer network.
That essentially implies that no organization or an individual has the authoritative control of the network (exceptions are there in private networks). A dApp typically follows these common features:
We saw how dApps are disrupting technology by removing any middlemen involved in critical applications like digital ID, voting, healthcare data etc. Before we dive into the primary benefits of dApps, note that Dapps enhance whatever conventional apps do. Why do we claim this? Well, dApps are secure, worth the investment, and ensure complete privacy for users.
Here are some of the most important advantages of Dapps over conventional apps:
As the name suggests – ‘decentralized’ apps are completely safe and the records in the network are unchangeable without concensus. Moreover, dApps are also sheltered from hacking, intervention and can avoid any other potential damage.
As dApps run on blockchain, transactions that have taken place can always be verified easily. Subsequently, every user can access the record and check current and previous transactions details. The complete transparency also facilitates accurate verification of all the implemented amendments to the code.
Decentralized applications help in processing secure financial transactions relatively faster due to absence of any middle parties and applications/gateways.
One of the much-anticipated benefits of leveraging blockchain technology is that it offers anonymity. What does that mean for end users? Well, they won’t require lengthy signups for each and every site they visit to access simple information.
Blockchain is going to disrupt how the digital world functions and the revolution has already started. Decentralized applications or dApps being the much needed technological innovation in critical privacy-related functionalities, have diverse scope ahead. In the second part of this blog, we will move our discussion forward towards the various aspects related to the deployment of dApps, the challenges faced and how to overcome them.
Watch out for the 2nd part of the this blog series that focuses on various deployment solutions for dApps!