How to Develop a Decentralized Application on the Blockchain?

Effective and efficient business tools ensuring fast, safe and transparent transactions is one of great challenges in today’s digital world. Billions of people use billions of devices to come online and surf the web. The extensive growth of the web and the need to decentralize processes gave rise to a new model of building scalable and profitable applications, which became a new breed on the ring. These decentralized applications or Dapps do not belong to anyone, can’t be shut down by one person or even group of persons, and have no downtime.


How it can be?


Bitcoin with its cryptographically stored ledger, scarce-asset model, and peer-to-peer technology paved the way to a new software model, which is more flexible, transparent and incentivized. This decentralized model is a core feature of any Dapp.



What is a Dapp?


In simple words as defined by Towards Data Science, a Dapp “consists of back-end code that runs on a decentralized peer-to-peer network. It can also have a user interface, created by front end code that makes calls to the back end”. Decentralized applications allow for direct interaction between users and providers, thus there is no need to have a central authority to make an app function. A Dapp frontend code and user interfaces can be written in any language and its frontend can be hosted on decentralized storage such as Swarm or IPFS.


The technology a Dapp is based on is open, distributed and tamper proof in its nature. Sounds familiar? Yes, it is blockchain, the technology the first world’s cryptocurrency Bitcoin was built on.


Before getting into Dapps details let’s look back to what blockchain is.


Blockchain, also known as distributed ledger technology (DLT), was originally developed as an accounting method for virtual currency. Plainly speaking it is an open, decentralized database which allows you to perform any trusted transaction without a third party. It keeps a record (ledger) of all data exchanges and every verified data exchange or transaction is added to this ledger as a “block”. Each transaction is verified through a distributed peer-to-peer network of nodes. After being verified, the new transaction is added to the blockchain and cannot be altered. And, cherry on top, peer-to-peer network utilization means the copies of the ledger are stored in many different locations and cannot be destroyed or falsified unless you manage to track down every single one of them. For example, Bitcoin is estimated to have over 35,000 nodes in its P2P network (11,703 of reachable nodes in 2018) and Ethereum node count is 14125.


Currently, blockchain has a wide range of applications almost in any field of business. So the fact is decentralised app development powered by blockchain is a new trend offering new possibilities for business. Building a decentralized app can reduce capital expenses dramatically and ensure high level of integration with other apps.



What Are Key Characteristics of a Decentralised Blockchain App?


Blockchain is not the only feature of a Dapp. To be qualified as decentralized application an app should have the following set of characteristics:

·         Decentralized – The app uses blockchain cryptographic technology, i.e. a transaction validity does not require a centralized clearing house. Blockchain embodies a feature that requires everyone else in the network to agree on something, as every node of the network has a copy of the ledger. This feature can be realized via the use of smart contracts, the pieces of code inside a blockchain, which execute a contractual clause upon preprogrammed condition is triggered.

·         Algorithm and Protocol – The app generates tokens in accordance with standard cryptographic algorithm which acts as a proof the nodes contribute to the app (e.g., PoW or PoS) and has an inbuilt mechanism for consensus building.

·         Open source code – The app code is available to all and a person or a group of persons cannot control the majority of tokens. One the one side, any competitor can use your work and label it as their own. On the other hand, open source Dapp development can gain trust of future users as the key to success is the ability to maintain the Dapp, and the best people to do it are the original development team.

·         Incentive – The app generates crypto tokens to provide value to contributing nodes and the users get access to the app in exchange for tokens. Miners are rewarded with tokens when they successfully contribute to the ecosystem.



What Dapp Types Are There in the Market?


According to Ethereum, there are 3 main types of Dapps:


1.    Financial applications, or money management applications: These apps are used to transact assets using the blockchain network currency also referred to as cryptocurrencies.

2.    Semi-financial applications: These applications integrate money with real world events using smart contracts.

3.    Decentralized governance applications, or Decentralized Autonomous Organizations (DAOs): The applications run autonomously according to the rules defining who can be the members of organization, how members can vote, what business activities can be done by the members and the terms of tokens exchange.



Why Do We Need Dapps?


Dapps allow decentralization of all data and backend code and that means they cannot be changed and are tamper proof. This opens prospects for multiple fields of Dapp use.


Here are some benefits you get when you develop a decentralized app:

·         Payment management: users can make transactions in crypto currencies through P2P networks powered by blockchain.

·         Confidentiality: decentralized nature of such apps means that the transferred data are encrypted and the information in the decentralized network is stored in the form of multiple blockchain copies available for every member of the network BUT only the key holder can get the information.

·         Login details: the system of public and private keys means that users can interact and save sessions and meta data without long and tiresome process of subscription and registration.

·         Trust and audit: Dapp is transparent to its users. Public blockchain ledger allows users and thirds parties check the information about transaction.

·         Incentives: Dapp users not only use the app but also engage in the Dapp network as share holders, developers, miners, bounty testers, etc.


How to Build a Decentralized Application?


If you decide to make own Dapps you have to keep in mind that a Dapp development process is a bit different from developing a centralized application. There is a definite sequence of steps you should take.


Step 1. Make people know about your app.

You’ll have to publish a white paper containing the details on your Dapp. Explain the app concept, its features and technical fine points to your possible users to get feedback and create a community to make your app indeed decentralized. To make the app attractive in the open market you must have a clear and comprehensible road map of your project. Transparency and carefully thought-out plan can help build trust and reliability among your future community.


Step 2. Make your initial coin offering.

Initial coin offerings (ICOs) is the kick of today’s startups and Dapps. You offer coins (crypto coins) which will fund your Dapp. This is a way of crowdfunding where the cryptocurrency is sold to investors in the form of tokens, which will be used as functional units of the app in future. Give all details about how the ICO of your Dapp will work. Let the community know whether there will be pre-mined tokens or a mining mechanism implemented in your Dapp. To make your Dapp successful the allocation of tokens must be as transparent as possible, always state how much tokens will go to the development and marketing budget as well as to other essential allocations.


Step 3. Develop your Dapp.

With necessary concept and budget in place, start the development phase using chosen platform and development team. At this stage it is important to publish updates about development progress on a regular basis (weekly or monthly) to keep your members engaged.


Step 4. Launch the Dapp

Launch the Dapp and accompany the release with detailed release notes and maintenance plans. Maintain and modify the app to keep it align with the plan you unveiled to the community.



Bottom Line


The scope of Dapps utilization is not limited to finances, such apps can be successfully used in almost every industry to streamline and control business processes. Here is the example of our Dapp aimed at the field of software development.


DropCode – the Dapp by Archer Software

One of the most disputable questions arising in the course of project software development process is the verification of the scope done by the developer vs money paid by the client. If often happened that the client claims that the scope was not performed on a full scale, underperformed or misperformed.


Here’s where DropCode can assist as the general idea of DropCode software has been inspired by many facts of violation in the fields of service agreements or making products that does not follow software requirements.DropCode solves this problem via introduction of the Dapp as a 3rd party guarantor and arbitrage services to resolve agreement disputes on a technical level.


Here come the details of the app: A small Dapp that allows a user (vendor) to set up a scope of works to be paid for vs other user’s (customer) requirements. Clear and simplified one-line notations are used for both vendor and customer during the implementation. The Application implements specially developed consensus achieving logic for client’s requirements and their final implementation by the vendor which ensures both: 1) for vendor to receive payments, and 2) for client to receive source code in accordance with the agreement terms or full refund back to the customer's account.


Despite its simplicity the application uses an external Etherium control mechanism - a platform based on blockchain technology, which guarantees entire safety of the transaction on both sides or cancellation of the transaction at all.

The Dapp market is evolving in high gear. At present Ethereum is the platform of Dapp developers choice, yet there are other platforms, such as RSK powered by Bitcoin, Ethereum Classic, Cardano, Lisk, QTUM and NEO.


Although the Blockchain is a comparatively new technology, Archer Software already has experience in developing and releasing apps using this technology in the IOT, Fintech, and in Healthcare. Contact us at to get more information about decentralised app development.