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January 11, 2022

What is a dApp?

Today, we explain dApps (“d-a-p-p-s”), short for decentralized apps.

Unlike traditional apps that run on your smartphone or a web server somewhere, decentralized apps run on the networks that power blockchains. They are decentralized, because each of these networks can have many so-called nodes, which are computers running these dapps. Remove one of them, and the blockchain with its dapps is still fully functional.

But what exactly does a dapp do? It’s just a small computer program, often called smart contract, that executes in the background on these nodes when a transaction happens. Say, for example, you send someone Ethereum. The Ether dApp will run, check your wallet balance, remove the amount, and add it to the receiving wallet balance.

But the clever thing is that these dapps can do anything you can program a computer to do. Say you want 5% of that transaction to go to charity, you would program your smart contract to do that. Or you want an NFT to only be able to sell once? Same thing.

And that’s how a single blockchain like Ethereum can power so many different tokens - they are all just dapps, implementing many different ideas.

And next time we talk about swapping – how it’s possible to exchange one token for another and where to do it.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.

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