What is a Decentralized Application (DApp)?
A Decentralized Application, commonly known as a DApp, refers to software applications that run on a peer-to-peer network of computers rather than being hosted on centralized servers. In the context of Ethereum, DApps leverage smart contracts to facilitate and enforce their functionalities automatically, without the need for intermediaries.
Ethereum smart contracts are programs stored on the Ethereum blockchain that execute when predetermined conditions are met. This enables DApps to perform complex processes securely and transparently, ensuring that all participants in the network agree on the state of the application without reliance on a single entity.
DApps can serve various purposes, ranging from finance-related functions to games and social networks. Their decentralized nature provides users with greater control over their data, enhanced security against hacking, and reduced risks of censorship.
In summary, DApps, built on Ethereum smart contracts, represent a transformative shift in how applications are developed and operated, utilizing blockchain technology to deliver a more decentralized, transparent, and efficient user experience in the finance sector and beyond.