Centralization in technology has brought numerous benefits to our world. The single point of control model was simple and performant, offering enough control to enforce policies and regulations. However, as systems expanded and customer demand changed, centralization became no longer an efficient solution for the modern world. Single-point failures, privacy concerns, and censorship increased social media platforms and online banking risks.
That’s why decentralized technology is the best alternative to centralization, as it distributes work and responsibility. Decentralized applications are transparent and immutable due to their blockchain-based features. Ethereum and Solana are well-known for the impressive tools creators use to develop these apps, and their underlying economic system helps reward their efforts. For example, developers working with Solana receive SOL when they contribute to innovative applications, and since there’s an increasing number of these technologies, you can easily make a Solana price prediction.
Decentralization moves towards the blockchain ecosystem, and dApps (decentralized applications) have real-world use cases, so let’s explore them.
Decentralized Finance
Decentralization brings more transparency to this industry than centralized finance. The DeFi sector facilitates transactions between users and businesses without intermediaries, including lending and borrowing. Smart contracts automate transactions when predetermined conditions are settled.
Decentralized applications help DeFi evolve by sustaining these transactions through user-friendly apps. Just as traditional banking needs an app for the user to access its services, DeFi needs applications for people to engage in a censorship-free, secure, and flexible environment.
For example, Uniswap is a popular decentralized exchange built on the Ethereum blockchain that supports trading through smart contracts that provide liquidity. The Decentralized applications ensure seamless trading, as users can do it directly from their wallets.
Social media is one of the most essential online environments of our century. It allows everyone to connect with others, and the power of communities can be overwhelming. However, several challenges make it a dangerous space, including misinformation, cyberbullying, and user data safety.
Due to their decentralized features, decentralized applications give power to the user. Decentralized social media platforms (DeSo) are based on blockchain technology, where independent nodes support the platform’s integrity and safety. While the current demand for these apps isn’t significant, alternatives for our common social media websites are already
up and running.
For example, Mastodon is a popular choice instead of Facebook and Twitter, operating on
microblogging, chronicle feeds, and media variety. Steemit is another option for Reddit, while PixelFed is an open-source Instagram.
Decentralized Gaming
Gaming brings people together from across the globe, but playing modern games is slowly losing its spark. High base prices, microtransactions, and expensive DLC affect the demand for newer games.
Decentralized gaming offers users the opportunity to access a revenue stream within the community. Play-to-earn games are becoming more popular among players as they allow for incentives based on solving quests or participating in blockchain events. Unfortunately, they might not be that approachable due to the lack of user-friendly UX.
There are various decentralized games on the metaverse and Web3 through which players can receive crypto or NFTs to have fun. Some of the most well-known games include Decentraland, the Sandbox, and CryptoKitties, allowing players to explore worlds and create decentralized ecosystems.
Decentralized Healthcare
Decentralization in healthcare could potentially solve all of its problems regarding patient data recording and safety. Medical staff can store patient data on decentralized apps, ensuring it is impossible to tamper with.
Dapps could also reduce dependence on third parties, eliminating cybersecurity risks. In addition, their interoperability makes it easy for all industry participants, from specialists to patients, to communicate since sharing medical data is easier, faster, and more reliable than with centralized systems.
Of course, healthcare will face various challenges when adopting decentralized apps, including the need for global standards. A successful regulation should be flexible and open-protocol.
Decentralized Supply Chain
One of the best use cases of decentralized applications could be supply chains. The industry is heavily challenged by disruptions, leading to massive financial losses and a lack of trust from the end user, and decentralization could help.
Distributed ledgers can improve trust, transparency, and efficiency by streamlining supply chain operations in real-time. By using blockchain technologies, manufacturers, suppliers, and distributors can better communicate and agree with smart contracts.
Dapps can allow decisions to be made faster, but since every step is recorded on the ledger, there are fewer chances of fraud and cybersecurity attacks disrupting the process.
Decentralized Apps Also Have Their Limitations
While the potential is high, there’s enough space for improvement. The technology is new, and talent is scarce, which is why dApps might be more challenging to handle at first. For example, current blockchains can be slower than centralized ecosystems since multiple parties verify all transactions. That’s why Bitcoin can handle only about seven transactions per second, and Visa, its centralized competitor, can support more than 65,000 TPS.
However, one of the biggest challenges is regulation. Communities are uncertain of the government’s willingness to regulate cryptocurrencies and blockchains soon, which hinders their opportunities and capacities to contribute to decentralization.
While some countries are actively approaching these technologies, others are not interested. El Salvador declared Bitcoin a legal tender and has supported its circulation in the country for some time. However, reaching the same level of literacy on cryptocurrency and blockchain will be difficult.
Although decentralization is beneficial for development, we need a centralized way of implementing technology in our world. Laws and regulations are required for both companies and individuals because they ensure protection and the ability to evolve in greater security.
What Do You Think About Decentralized Apps?
Decentralized apps run on blockchain technology and have been evolving, especially with the help of systems like Ethereum and Solana. They are more secure, censorship-resistant, and faster than centralized apps, which is why they’re slowly entering fields like social media, finance, and healthcare. Still, despite their benefits, dApps need to be regulated for enhanced security and efficiency. At the same time, we need more talented developers to explore technologies and make dApps approachable to regular users.
