Blockchain Technology has come a long way from what it
Blockchain Technology has come a long way from what it was a decade ago. it all started with Bitcoin in 2009 when the digital currency brought the distributed ledger technology into the forefront. The early use cases of the technology included tokenization as well as cryptocurrencies.
As time progressed and the technology became more mainstream new uses cases arose like the smart contracts, which are just a small software code which can be programmed to self execute after certain predefined criteria are fulfilled. You can view smart contracts as “if & then” kind of program where “if’ a particular criterion is fulfilled “then’ it would successfully execute a task.
On the other hand, Dapp is a decentralized application, where they are like any other software application but works on the blockchain technology. It means that these software programmes follow the principles of decentralization where its database is distributed and saved on the blockchain node of the platform on which it is based 0n.
People often confuse between Dapp and smart contracts to be the same, but they are two different use cases of the same blockchain technology. In this article, we will try to establish a clear difference between the two concepts and know in detail what they do.
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Smart Contracts and Dapps are Different Use Cases of the Same Technology
The only thing common between the smart contracts and Decentralized application is the technology of Blockchain they are based on. Both the use cases arrived on the scene as the technology progressed. First, it was cryptocurrency tokens which promised a financial system not governed by any authority but the people or peers of the community.
Then as the technology progressed and gained some momentum, Ethereum network started making smart contracts, which are the digital array of codes with pre-defined conditions, which if fulfilled, that part of the contract is executed without any human intervention.
Let us say Bob sells computer graphic cards in California, and Tom owns a shop in Ohio. Tom asked Bob to deliver 10,000 graphics chips over a period of three months. They both agree upon the terms and conditions where the first batch of 1000 chips would be delivered in the first week of the first month. Both of them would agree upon the price and lock it in an escrow. Once the first batch of the shipment is delivered, both the parties would update the ledger and the smart contract would release the said payment, without anyone having to contact each other or go to banks.
These smart contracts are quite flexible and a number of things can be altered and preset, like the penalty for the delay, or even cancelation if the requirements are not met.
On the other hand, Dapps are just like any other applications but decentralized, which means the software application is not controlled by an organization and it pays equal opportunity to anyone to earn points or rewards within the app. Earlier the rewards or points in a gaming application could only get you things available within the games, but with Dapps games you can exchange those rewards and points for real-world money or cryptocurrency as well.
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Smart contracts and Dapps are like Blockchain Use Case 2.0
Blockchain technology on which Bitcoin and most of the altcoins are based on have many benefits and uses beyond the cryptocurrency realm. The first phase of the technology focused on cryptocurrency and tokenization. Then as the people realized the potential and how dynamic the technology is, smart contracts came into existence.
After the smart contract phase became successful, decentralized applications came into the trend. Within the next 5 years, we might see other use cases as well which might not be even imaginable as of now.
Apart from these use cases, Blockchain is also being used in a number of traditional sectors like healthcare, agriculture, banking, entertainment and many more. It’s not because the previous systems were inefficient but with decentralization, even the most advanced traditional sectors see the upsides of the incoprporating blockchain.
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Final Thoughts
Blockchain Technology in its small life span expanding over a decade has touched and impacted more lives than any other technology of the past in the same time-frame of reference. Even those who bash Bitcoin or deny that cryptocurrency has a future agrees that Blockchain technology and its various use cases could potentially shape our future.
Both smart contracts and decentralized application are being used every day and Dapp are quite in trend these days. Most of the gaming industry are looking to launch their games based on Dapp to garner support and move towards the decentralized space.
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