decentralized-app

How to Build a Decentralized Application (DApps)

The ongoing debate regarding the potential uses of blockchain technology has helped to highlight the advantages that this exciting new technology has over existing solutions. Such advantages stand to benefit an enormous number of applications in a market that is expected to be worth $100’s of billions by the end of the decade.

Right now companies and developers around the world are clamoring to harness the power of decentralized applications (DApps). Once properly implemented, DApps will help dramatically improve many of the core features of applications, making them more secure and trustworthy.

In this article, I intend to examine what the benefits of these decentralized applications really are and take a closer look at the kinds of applications that are set to benefit from their implementation. After I have done so, I will then explain the process of how to build a decentralized application in order that anyone reading this can make their own DApps for themselves.

Since specific coding examples quickly go out of date, I have chosen not to include any such example but rather have included links to good projects that cover in more detail the processes that I have outlined. If you are a code junkie, head straight to the bottom of this page where you can find the links to get your fix.

Contents

What is a Decentralized Application?
What is blockchain?
How do Decentralized Apps reward network participants?
3 examples of DApps currently in development:
How to develop a decentralized app
Development Step 1: Deciding on what technology you will use – Defining your Environment

What is a Decentralized Application?

daap

Decentralized Applications differ from conventional applications in that they don’t rely on the conventional client-server network model. This model requires a central controlling authority to maintain the network and authorize any changes etc.

The decentralized network model, on the other hand, uses a network of computers (known as nodes) that are all equal participants in maintaining the network. Since computation is performed at each node independently, all of which have a complete record of all the transactions, the network is able to offer a number of unique features that benefit applications.

Decentralized applications rely on the blockchain principle that was first outlined in a paper by Satoshi Nakamoto back in 2008. Nakamoto devised the concept of blockchain to overcome the duplication problem that prevented the implementation of a viable cryptocurrency. The digital currency he was to invent was bitcoin, which was to go on to spark the blockchain revolution.

What is blockchain?

Blockchain is an exciting new technology that allows for blocks of data to be recorded and stored in a chain. As each new block is added, it creates an uninterrupted digital ledger. Due to each transaction requiring validation by the entire network, they cannot be approved without the agreement from at least 51% of the nodes.

Since each node on the network has a complete record of the ledger and computes every transaction independently, decentralized applications are tamper proof and ultimately far more secure.

Key features of a decentralized application:

  1. Decentralized – No one controlling power
  2. Open Source – Code is available to everyone
  3. Incentive – Crypto tokens are used to reward network users/miners etc.
  4. Protocol / Algorithm – To generate tokens that reward network participants
  5. Blockchain – Data stored cryptographically in a blockchain

Classifications of Decentralized Apps

There are three types of DAaps. These classifications are linked to how the DAaps use blockchain.

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  1. Type 1 DApps – Use own blockchain. Examples include Bitcoin.
  2. Type 2 DApps – Decentralized applications that use type 1 blockchain. They must issue tokens in order to reward participants in the network. Most smart contract based apps that use Ethereum are this type.
  3. Type 3 DApps – Use Type 2 protocol to underwrite the tokens that they issue.

How do Decentralized Apps reward network participants?

Currently, there are two ways in which DAaps reward participation.

  1. Proof of Work

The proof of work model allows network participants to be rewarded based on the amount of work they have undertaken for the network. Mining is one example of how proof of work. Miners are rewarded in the form of tokens based on the number of transactions they have processed.

  1. Proof of Stake

With PoS a network participant is allowed to vote on anew block according to their stake in the network.

What are the benefits of a decentralized app?

I have already mentioned briefly one of the main advantages of decentralized applications. Time and time again, IT professionals cite security as their primary concern when it comes to applications.

Unfortunately, the client/server model offers cyber hackers a single point at which to orchestrate attacks. This failure has resulted in massive data breaches which have not only cost huge sums of money, but have also dented customer trust as well.

DDoS, SQL injection, XML attacks, phishing, and impersonation attacks are just some of the many types of security challenges conventional apps face. Decentralization prevents these kinds of attacks because there is no one point of failure.

Since every nodes in the network have a complete record of all transactions and are required to authorize any new transactions, a hacker would need to gain control of a majority of the nodes in the network to be able to make such a change.

Not only that, any alteration of data stored in a blockchain would require the hacker to alter the blocks around whatever block they wished to change in order that their activity is not detected.

These features are the reason why, to date, there has not been a single successful attack on a blockchain network. The only realistic chance hackers have is in applying the massive computing power of a quantum computer to attempt to trick the hashing mechanism.

Advantages of Decentralized Networks: Summary

  • No one controlling entity
  • More secure than client/server networks
  • Secure record of the entire database
  • Requires the agreement of the entire network to alter written blocks
  • Cannot be shut down by single outage/attack
  • No downtime
  • Increased trust
  • Easy to facilitate payments

Disadvantages of decentralized applications

  • Slower transaction processing times
  • Blockchains become less efficient as they grow in size
  • Energy costs are higher

3 examples of DApps currently in development:

Decentralized app development has exploded in the past few years. Undoubtedly, the reason behind this is because of last year’s cryptocurrency boom which helped thrust decentralized blockchain technology into the mainstream.

  1. Factom – A type 1 DApps that aims to validate digital assets.
  2. KYC-Chain – Type 2 DApps that aims to use know-your-customer (KYC) to simplify the process of identity confirmation.
  3. The SAFE Network – Type 3 DApps that offers decentralized data storage.

How to develop a decentralized app

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Building a decentralized app comes with its own unique challenges. Features such as decentralization and creating a smart contract require a unique developer skillset. It is for this reason that hiring the services of a developer who has experience in developing a decentralized blockchain app is a good idea.

For larger projects, it is definitely a good idea to outsource the project to a professional dev team so that they can do all the hard work for you. You may also need to think about hiring a company to help you handle your ICO.

Using an ICO to fund your Project

Step 1: Know your project

Before you do anything it is really important that you understand your project from top to bottom. Not only will you need to understand the how your application intends to solve whatever problem it has been designed to, but you will need to also understand such things as why the application needs to be a decentralized app, how much it is going to cost, and whether or not there is a market for it in the first place?

Step 2: Create a whitepaper

Once you have a clear vision of what your app is, how it will function, and where it will be in 5 years, you can now begin the process of writing a great whitepaper to help investors understand your vision.

If you need help with this then you can read an article I recently wrote for the DevTeamSpace blog “How to Write an ICO Whitepaper”.

Step 3: Launch an Initial Coin Offering

ICOs are a great way to raise the funds that you will need to develop your project. Unlike IPO’s, they don’t require you to relinquish any control in the company through shares etc. to raise the money you need.

Read How We Helped a Marketing Company to Build a Back-Office Custom Ads Dashboard

For a guide on how to launch an ICO please read my article by clicking this link.

Step 4: Start Building Your App

smart-contract

There are lots of approaches you can take when building a decentralized app. Some are a lot easier than others as they utilize the resources provided by organizations such as The Ethereum Project etc.

The majority of low scale decentralized apps now utilize Ethereum’s smart contract service in some form or another. Since they already have a vast amount of resources that are already available for development use, Ethereum represents an excellent way to reduce the time and money needed for decentralized app development.

What follows are the main steps and considerations vital to building a decentralized application.

Development Step 1: Deciding on what technology you will use – Defining your Environment

You will need to determine exactly what technology you are going to use for these key areas of development:

  • Database
  • Frameworks
  • Hosting
  • Frontend
  • Frontend contracts
  • Contract’s programing language
  • API’s
  • Development server

Development Step 2: Setup the project

This step will involve firstly installing the development framework.

Next you will need to set up all the tools you will need for the front end development of your app. Try to always develop in a language your entire development team is familiar with. This might seem obvious but it is amazing just how many projects ignore this rule. For Ethereum developers can use Solidity or Serpent.

If you intend to use Ethereum then Truffle is an excellent development platform.

Development Step 3: Code the application

If you are new to decentralized app development then start by using Solidity, as it is the easiest language to use thanks to its similarity to JavaScript. Solidity is an excellent programming language for coding the smart contracts that your decentralized application will need.

Smart Contracts are the part of creating decentralized applications that developers will need to be familiar with. As I have already stated, creating smart contracts directly to the Ethereum blockchain is by far the easiest way to create your own small-scale decentralized app.

Keep in mind that blockchain transactions cost money. Known as “gas”, this is the money that goes to the miners who process transactions. In the case of Ethereum, gas will be charged in Ether that will be deducted from your account.

The next step is to complete front-end development.

Remember when you get around to designing your UI to keep it snappy and appealing to users. Functionality is key to a great UI, so make sure that it has all the features that a user might require, and that they are located in the places where they are most needed.

So, for example, if you are creating a decentralized identification system, then you should ensure that the relevant information is displayed in a way that makes it easily to interpret. There is nothing worse than not being able to find the information or buttons you need.

Development Step 4 Deploy and Test Your Daap

Before deploying your app to the blockchain, it is worth noting that any deployed smart contract code will be unalterable and forever stored on the blockchain. Though it is possible to ‘overwrite’ the old code by creating new blocks on the chain, you should always make sure your code is 100% before deploying.

You should always ensure that you only fully launch your DAap after it has been fully tested. For this reason, all apps should have a test window built into their development. Before you reach the testing stage, you should arrange a meeting with your development team where you discuss all the variables that you will need to test.

With a voting decentralized app, for example, these variables will include single vote tests as well as high volume voting in order to test the network processing speed etc. You should also test to see how the app deals with repeat votes being cast by the same individual and attempts to alter the votes after they have been cast etc.

Development Step 5: Launch Your App

Once your app has been tested you will be ready to launch it. Choose a custom domain for the application so that it looks professional and then let everyone know it is up and ready.

Keep in mind that this will be the most intensive part of your marketing strategy since your ICO launch as you will need to keep the buzz going about your project.

Though the hardest part is behind you, the success of your new DAap is by no means assured. For this reason, you should keep up the same level of hard work and diligence that lead to you creating a great app in the first place.

Examples of simple decentralized apps deployed to the Ethereum platform:

Voting Ethereum DApp

Decentralized Casino Ethereum DApp

Auction Ethereum DApp

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Aran Davies

Aran Davies

Blockchain Expert | Developer | Writer | Photographer
Aran Davies