DEFINITION of 'Distributed Applications (ĐApps)'

Distributed Applications are software applications that are stored mostly on cloud computing platforms and that run on multiple systems simultaneously. The systems run on the same network and communicate with each other in an effort to complete a specific task or command.

Compared to a distributed app (ĐApp), a traditional app requires one system to achieve an assigned task.

BREAKING DOWN 'Distributed Applications (ĐApps)'

A Distributed App (DApp) is designed to allow users of a network to collaborate and share ideas, co-ordinate on tasks, access information, and exchange apps through a server. DApps are mostly used on client-server networks where the user’s computer accesses information from the server or cloud computing server. The different computer systems that have been distributed across the network are normally tasked with similar or different objectives. For example, in an e-commerce platform, each of the computers may be responsible for specific tasks such as sending and receiving emails about special offers to current customers; compiling a list of customers and their purchase history to better target products to them; updating the customer list with new customers who have registered with the online market; accepting product reviews from each patron for future product decision-making; accepting various payment methods at checkout; answering customers’ questions online whether as a person behind the computer or a chatbot; etc. Each of these tasks will be carried out by one or more systems on the network, but all systems communicate with each other to ensure that the customer buys and receives the product that is beneficial to him or her.

In the cryptoeconomy, the blockchain used by most cryptocurrencies uses Distributed Apps to maintain an efficient digital marketplace. Rather than the conventional client-server network adopted by most centralized organizations, blockchains run on a peer-to-peer network where transactional information carried out between two parties is recorded and shared across multiple computers on the network. These computers are referred to as nodes. Each node acts as an administrator in the Bitcoin markets and joins the network voluntarily for the opportunity to receive Bitcoins as a reward.

Each node has a duplicate copy of an original transaction, which gets continually reconciled by the network. So whatever entry that node A has on its record for a Bitcoin transaction between Jane and John cannot differ from what nodes B, C, D, E, and F have. This means that since a version of events can be verifiable with different computers, a hacker, even though he gets into one system to tweak the transaction, would need to get into all the systems spread across various geographical locations to corrupt the recorded data. This feat is impossible, making the Bitcoin blockchain transparent and incorruptible.

Also, by storing blocks of information across various nodes on a blockchain network, the blockchain cannot be brought to ruins by the failure of one system. When a computer or system fails, the other systems act as backups and keep running regardless of the down system. Once all active nodes have received and verified a transaction as valid, the block (i.e. the transaction) is added to the chain (i.e. the general ledger) for public access. The ability of all nodes to keep functioning even when one or two nodes drop out of the network, ensures that users are constantly getting their transactions recorded and confirmed in an uninterrupted and timely manner.

Companies in the financial sector are constantly seeking new ways to incorporate ĐApps into their work processes through the blockchain. One reason for adopting a blockchain system is to improve the transparency of the firm’s operations in order to meet the stringent requirements of financial regulators. Other reasons why a firm in the financial sector may want to integrate ĐApps includes reducing the number of intermediaries involved in a financial transaction, providing clients with access to cryptocurrencies, creating access to groups like peer-to-peer lending (P2P) groups, and largely improving verifications to be made on historical transactions.

RELATED TERMS
  1. Blockchain

    A blockchain is a public ledger of all cryptocurrency transactions. ...
  2. Consensus Mechanism (Cryptocurrency)

    Amid the dynamically changing status of the blockchain, a consensum ...
  3. On-Chain Governance

    On-chain governance is a governance system for blockchain in ...
  4. Decentralized Applications or dApps

    Decentralized applications (or dApps) are digital applications ...
  5. Networking

    Networking is a process that fosters the exchange of information ...
  6. Distribution Network

    A distribution network is a company's interconnected group of ...
Related Articles
  1. Tech

    Three Strikes Against Bitcoin's Lightning Network

    Bitcoin's lightning network is expected to be a big leap forward for the cryptocurrency despite some drawbacks.
  2. Tech

    JP Morgan's Blockchain Trial Project

    A glance at JP Morgan's blockchain trial in association with Digital Asset Holdings.
  3. Tech

    Blockchain Technology Could Revolutionize In-Message Payments

    Consumers want to have secure and private messaging, and they want to be able to send payments to other consumers seamlessly.
  4. Tech

    Public vs Private Blockchains: Challenges and Gaps

    Despite the growing corporate embrace of public blockchains, there's a slow shift toward private blockchains.
  5. Tech

    'Zero Knowledge Proofs' Could Boost Blockchain Adoption on Wall Street

    The complex mathematical proof encrypts transactions, making client and transaction privacy possible.
  6. Tech

    Blockchain: The Backbone of Finance's Entire Future

    What is blockchain, and why is it now being used for everything from tracking loans to authenticating diamond purchases?
  7. Tech

    What Is Blockchain and Why Should I Care?

    While Bitcoins are still new and very volatile, the blockchain technology used shouldn't be ignored.
  8. Tech

    How Bitcoin Works

    Miners, hashes, keys, cold storage, blocks - it's confusing. We can help you understand how bitcoin works.
  9. Tech

    All About Ethereum

    Here’s a detailed look at Ethereum, and what makes it so special and promising
  10. Tech

    Does Blockchain Technology Pose a Threat to Netflix?

    Blockchain technology's many uses include decentralized streaming. Netflix needs to join in or be left behind.
RELATED FAQS
  1. What Does the Bitcoin Blockchain Record?

    Read about the bitcoin blockchain, a public ledger shared among all bitcoin users that records the information of every single ... Read Answer >>
  2. What are the advantages of paying with Bitcoin?

    Learn how payments made with Bitcoins offer certain advantages over standard currency, including user anonymity, no taxation ... Read Answer >>
  3. What is the Difference Between a Capitalist System and a Free Market System?

    Learn how capitalism and free market systems work, along with their differences. Read Answer >>
  4. Why do Bitcoins have value?

    Performing with transactional anonymity, Bitcoin has value as a private digital currency, investment tool and social networking ... Read Answer >>
Hot Definitions
  1. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
  2. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
  3. Limit Order

    An order placed with a brokerage to buy or sell a set number of shares at a specified price or better.
  4. Current Ratio

    The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations.
  5. Return on Investment (ROI)

    Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency ...
  6. Interest Coverage Ratio

    The interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a company can pay interest ...
Trading Center