Blockchain application hasn’t reached its full potential and it’s hard to tell when it will be a widely-accepted technology. However, one thing is sure: blockchain is taking big strides forward, not only with cryptocurrency but also in other areas of dApp development. Seeing more of it in our daily lives is not a question of “if”, it’s a question of “when”.
Meanwhile, blockchain developers are working on creating decentralized apps (dApps) that will solve current problems in new ways. However, these do face regulatory and technical issues. Technical issues depend on the quality of work invested. Regulatory issues are related to the mindset shift mentioned above, which requires a different approach to the concept of the value stored in the blockchain. The stored value in blockchain applications differs from traditional financial models because it not only provides the technical infrastructure to complete transactions but also the opportunity to create value by solving computational problems via the “proof of work” concept.
Decentralized apps running on the blockchain and cryptocurrencies use essentially the same technology. Both are unchangeable, consensual, and distributed ledgers that enable executing transactions with a reduced likelihood for fraud due to the identical copies owned by everyone connected to the network.
Cryptocurrency is vastly used by individuals. Many own at least a few of them, if not a diversified cryptocurrency portfolio with dozens of different coins included. Cryptocurrency is making advances because individuals’ interests don’t score so high on the lists of policymakers as business interests do. When it comes to business blockchain used for dApp development, it’s more difficult to break new ground and capture the possibilities of the exciting new technology.
Business DApp Development
Decentralized application of blockchain in cryptocurrency has enabled people who never had the chance to access alternative income sources to apply the distributed ledger technology and access value in a new way. For example, Bitcoin, the world’s largest distributed application is using the internet to connect people on the same cryptocurrency platform.
Such a concept would have been impossible with the financial systems from the past, where centralized authorities have greater, if not absolute, control of what’s considered valuable. With cryptocurrency, individuals have a greater say in how they spend their money and what they think it is worth.
However, the seed for blockchain in business has been planted. Stakeholders supporting the blockchain concept are looking at a new financial concept, which is based on a more decentralized distribution of value. For instance, interest rates, legal conditions, and fees for bank loans are now primarily created by banks, and, therefore, depend on the bank assessment. Decentralized apps can eliminate a portion of the control by letting blockchain participants consensually decide what and how they want to charge for a transaction. If you decide to create a dApp that runs on the blockchain, you have greater chances to circumvent central banks, PayPal or international regulations.
What is a DApp?
Application of blockchain for companies is very similar because the technology is essentially the same. Decentralized applications are the same type of distributed, immutable, transparent, consensual and public records of transactions – just as they are in cryptocurrency application. Therefore, decentralized applications are also called distributed applications. Participants in distributed applications decide on what happens in the blockchain and are able to execute smart contracts without unnecessary interference from third-party guarantors.
Instead of relying on institutional backers, participants rely on the dApp development technology – the smart contract, which is a computer protocol that cannot be executed in any other way than in the one set consensually by the parties. This concept is accordingly applied by dApp development startups that, through the system of ICO (initial coin offerings), are able to raise funds faster than using conventional venture capital methods. Ethereum dApps, for instance, are using the smart contract technology on the Ethereum platform. DApp developers set up distributed ledgers for various industrial applications, and there are currently over 1,500 active and running Ethereum dApps.
Anyone who has access to the distributed application becomes an investor, a shareholder, or a bondsman. The terminology is a bit vague due to various interpretations of ICOs compared to classic, fiat currency. The important thing is that the value dissipates from the top or the center to the bottom or the sides of a network.
Storing value outside of traditional means has undoubtedly disturbed big investors, banks, and angel funds because now they have to think of the competition that’s coming strong with thousands of dApp development projects. Some areas need to ripen, but a few industries are well-off from the beginning.
Examples of Successful dApp Development
Decentralized apps have impacted critical traditional business models such as insurance, supply chain management, and property. Here are some of the ways dApps are being used in these industries:
Supply Chain Management
Combined with IoT sensors, blockchain applications can really revolutionize the way we ship goods and services around the world. By putting a sensor on a product and connecting it to a blockchain app, it’s easy to track any changes that happen in remote locations in real time. Therefore, the supply chain, although distributed across the globe, will provide the same public records for the participants, consequently reducing the possibilities of manipulating the supply chain with fake records.
Getting funds in and out of an insurance policy requires setting agreements and miscellaneous cautionary provisions for both the insurer and the insured individual. The insurer expects regular payments and most definitely doesn’t like seeing insurance fraud. On the other hand, the insured party expects a fair premium payment and timely funds disbursement once an unpleasant event occurs. By implementing smart contracts in insurance dApps, both parties will have to stick to their commitment no matter what.
Real estate deals take a long time to complete and a bulk of paperwork from everyone involved until a contract is enforced. With smart contracts, third parties such as deed creators can be removed from the transaction because, with blockchain, it isn’t necessary to ask for additional guarantees. The job is done with a few clicks and some even say that shopping for real estate will begin to resemble retail shopping.
These are only a few examples of blockchain for dApp development, but they could be vital ones and affect other areas due to the importance they have in the overall business landscape. In the next 5 to 10 years, it’s worth focusing on how smart contracts can find a place in your business. In all the unpredictability, now is the moment to gain the most advantage in dApp development.
About the author
Michael Kelley is a professional tech writer and content strategist with an app development background. He specializes in Android & iOS app design, as well as blockchain & dapp technology.