Decentralized applications, typically known as “dapps” or “dApps,” are cryptocurrency programs such as games and financial products that run on a blockchain network rather than a centralized server controlled by a single company.
Dapps are a broad category in the world of cryptocurrency. The term could describe anything from a decentralized crypto exchange to a social network where users control any revenue generated by their posts.
Dapps are a vital component of the concept known as “Web3,” which seeks to sap some of the power accumulated by internet companies in recent decades. In addition, projects focusing on decentralized finance, or DeFi, are also considered dapps.
Dapps run programs known as smart contracts, which automatically carry out functions (distributing payments, for example) when certain conditions are met. That means Ethereum is the largest cryptocurrency network on which dapps are available because Bitcoin does not support complex smart contracts.
This article was written by Andy Rosen and originally published on www.nerdwallet.com