Decentralized Applications and The Future of Organizations Built on the Blockchain
Internet users are not completely in charge of the information they post on the digital networks of today.
Ethereum is groundbreaking in its effort to use the blockchain as a means of addressing what its developers consider to be a troublesome part of the design of the web.
It’s like a “decentralized app store” where anyone can upload their decentralized applications (dApps) which, unlike today’s mainstream apps, don’t need a middleman to act and handle the data of a consumer.
DApps connect users and providers directly in a peer-to-peer network.
A couple of main characteristics are that they don’t have a central point of failure and are generally open-source, allowing the public to view the authenticity of the code.
Types of dApps
With this new technology available to developers, Ethereum supporters may feel excited by the concept of decentralizing “all things.” However, the kinds of apps that consumers may create with Ethereum’s computing platform can be somewhat limited.
Ethereum breaks dApps into 3 categories:
- Apps that manage money
2. Apps where the money is involved (but also requires another piece)
3. Apps in the “other” category, which includes voting and governance systems
A client may need to share ether in the first type of application as a way to settle a contract with another user, using the decentralized network as a way to facilitate the exchange of this data.
The second type of app mixes payments with data from outside the blockchain network, relying on “oracles” that relay up-to-date information about the outside world.
Bitcoin has shown that it can replace third party financial authorities, dApps show us that it’s possible to do the same for companies and other types of organizations. This can be done through decentralized autonomous organizations (DAOs), a unique category of dApp.
The goal of DAOs is to form a decentralized company, starting with programmatic rules about how to release company funds and how members can vote, then the company is run by the people.
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