Blockchains, Cryptocurrencies & The Decentralized Economy: Part 2 – Blockchain-based Apps

Since the advent of blockchain, initially 'block chain,' in 2008, it has taken its stand as ground breaking technology. In a bid to simply (yet thoroughly) bring you to a basic understanding of blockchain technology and blockchain based apps, we’ve taken time to compose this piece. By the end of this article, your knowledge about Blockchain-based apps would enable you to converse intelligently about blockchain and cryptocurrencies. Beyond relating well in the crypto world, this information opens your mind to the astounding impacts of technology generally, in this decade.
Blockchain-based apps are decentralized apps (DApps) built on blockchain technology with the potential to lay out a new way of delivering products and services in favor of users and the general public. DApps, such as Sia, Storj.io, First Blood, Membrana.io, and the likes, are built as open-source applications to reduce the amount of control and ownership their developers have over them for the benefit of the users. Besides less control and ownership of the app-makers, these new applications have proven to be different and better than the centralized apps we have on our mobiles in the following ways:
  • With DApps, a new business model can be birthed;
  • DApps allow a new product delivery model;
  • P2P exchange is made easier and cheaper;
  • Legal safety of customers is catered for;
  • DApps employ a new token-based revenue model.

With DApps, a new business model can be birthed.

There is a sequence which developers follow to bring a decentralized application to life. First is an idea to decentralize the delivery of some products and services which may include cloud storage, computer processing power, crowdfunding, commodity investing, video game streaming, poker, hedge funds, and distribution of media content. The creators then introduce their application to the world by explaining the technical details and use cases in a well-oriented white paper.
They create a medium of exchange by either issuing their cryptocurrency or build on top of an existing blockchain protocol layer such as Ethereum. This is done to support transactions of the products and services and raise more money for themselves and users. They establish an online community which comprises of contributors and users to implement and ensure the growth of the project. Storj.io, Membrana.io, and Lisk are examples of decentralized apps that have made some services easily accessible to users. Storj.io, an Ethereum-based cloud storage app, in its case serves as a broker in a peer-to-peer exchange which exists between users who need storage capacity and those who have excess. Users of the app can receive and make payments in Storjcoin (SJCX).
The Membrana platform serves as a middle-ground for investors and traders to execute mutually-beneficial contracts. Security is guaranteed because the platform is transparent and decentralized, and every contract is blockchain-protected. This means that both parties have no fear of being defrauded. The system controls the entire process of executing a contract from start to finish.

DApps allow a new product delivery model.

Primarily, decentralized organizations retreat from claiming ownership, storing or selling product or service by themselves. Instead, they act as brokers while they retrieve, verify, and deliver content without saving or owning the content or user data.
The content and user data are usually stored on a blockchain infrastructure layer rather than keeping them on a company’s database, servers, or proprietary platform, as the case may be. The fact that users can retain the ownership of their data using this model is a significant advantage over centralized apps.

P2P exchange is made easier and cheaper.

This new blockchain infrastructure can enable a more favorable sharing economy with a direct peer-to-peer exchange of goods that bypasses the high-billing middleman. In the case of the decentralized app, Storj.io, it allows parties to connect and exchange storage capacity at meager rates compared to some centralized apps of which we know. With the advent of more DApps, transport service apps such as Uber and AirBnB might soon be replaced thereby obviating the necessity of centralized platforms.
A DApp can also cultivate a marketplace for the direct P2P exchange of goods with no brokerage fees, emphasis on ‘no brokerage fees.’ OpenBazaar and Membrana.io are perfect examples of DApps offering this merit.

Legal safety of customers is catered for.

Investors and traders always want to be assured of their legal safety while trading, and DApps allow for the provision of this service. For instance, Membrana.io, which claims to be one of the first trust management platform completely built on blockchain technology, partnered up with Ingvarr Advisory & Trust to ensure that trading can be carried out safely amongst investors and traders. A partnership with Hacken also helped to implement a high level of security, thereby leading to trust between all parties involved.

DApps employ a new token-based revenue model.

As is the case with fiat currencies (US dollars, euros, and others), the value of cryptocurrencies depends on the principles of demand and supply. For every increase in need of a token, there is a proportionate increase in its value. The DApps producers retain a percentage of the generated amount of their cryptocurrency which would eventually increase the value of their assets.
As users consume token in exchange for products or services, they increase the demand of the tokens, which in turn affects a rise in the value of these tokens. The organization’s retained token then takes up a higher value.
DApps are a modern form of application with a different type of design, and an emphasis on decentralization. The idea of leaving user data in the control of its rightful owners - the users - is quite brilliant and commendable. What's more? Prices of goods and services are much lower in a decentralized app system as the applications do not allow for a middleman; a feature that may be necessary for a current service model.

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