August 13, 2019
Cryptocurrency

Decentralized Applications Do Not Exist. Not Yet

Decentralized applications

The whole point in a decentralized application is quite simple: if you deploy one online, then there’s just no way to bring it down short of bringing the whole network down. They’re supposed to be like the mythological hydra. They should have many heads so if you cut one off, the rest of the heads can keep on going, and new heads pop up all the time. We don’t have any of those so far. The ones we supposedly have are still controlled to some extent by a single person or a company. That means they still respond to a central authority.

The notion of decentralized apps is one of the blockchain’s contributions to the world of software development. Ethereum made them particularly famous by creating a programmable blockchain platform capable of sustaining the development and deployment of dApps. But as things stand right now, current dApps store a minimal amount of data in the blockchain.

And it’s usually about token ownership, so it’s the usual stuff the blockchain does (keeping the network’s native currency ledger updated). Everything else is run in a centralized way by the centralized authority that created and deployed the app.

If we talk about supposedly decentralized exchanges, the reality is that all sheep are not equal. There is a range that goes from the more decentralized to the less decentralized. But the fact remains that every exchange has some significant pieces of information or functional software centralized in some way.

Etherdelta, which is probably the most decentralized exchange in the cryptoverse keeps the order book in a centralized server and not in the blockchain’s ledger. And that’s as good as it gets these days. Other exchange platforms keep more critical pieces of data centralized.

So just because they say they’re decentralized, it doesn’t mean they actually are. So beware of all those websites that include the three letters “DEX” in their domain name. That doesn’t mean at all they’re decentralized in any significant degree.

If we look at crypto collectibles (think CryptoKitties, for instance), the decentralized bit about them is the random number of tokens stored in the blockchain. Buying a kitten is merely buying a random number, once you look beneath the hood. And that random number you call a kitty comes with an ID number.

And that’s it. Everything else is centralized under the aegis of Axion Zen, the company that developed, deployed and still runs the platform. Yes, your kitty’s picture, the market place, the auctions. They all use central servers in the standard old-fashioned, non-blockchain kind of way. Even Google is more decentralized because every time you run a search, you could be using a different box within the system.

The Centralized Pieces

Here’s where we get a bit technical. Every “decentralized” application currently deployed in any blockchain have some of all of the following elements owned or managed by a single company, organization or individual:

DNS. When you enter the app’s website, you need to access a DNS which is owned by the app-owning company.

User interface. It can be a web or a mobile app. It doesn’t matter. The user interface is owned, hosted and distributed by the company.

Backend and database servers. These are owned and operated by the company.

Object storage. When these are not operated and owned by the company in question, it’s usually because they’re owned and operated by the cloud service account that the company owns and is paying for. Unless they’re using IPFS. That’s not so common yet.

So if you’re thinking that all this looks almost exactly as traditional apps, you’d be right. Current dApps are just centralized apps that store some information (most often is not a lot of information and it’s not critical for the app at all, but currency data that has to be stored in the blockchain anyway).

If the apps’ owners go bankrupt, their main server experiences technical problems, or they just lose interest and choose to shut the app down, then you’re left with no app at all (in Etherdelta’s case, it seems that you could still get your money out, at least).

Let’s be clear on one thing. We are not trying to attack centralization at all. It has benefits, it makes everything easier to manage while decentralization is supposed to be impervious to external management.

But true decentralization is supposed to be genuinely decentralized, and that’s not what today’s apps can give us precisely because they’re centralized for the most part. It’s a little like saying that any online sales platform is decentralized because it accepts Bitcoin and they have to store the information about payments and transfers in the Bitcoin’s blockchain.

So why are we still so centralized?

The answer to that question is relatively simple. As we stated before, there are advantages to centralization, and one of those is that a centralized system can be better tuned to perform reliably. And we all want our apps (of any kind) to do the trick they’re supposed to do every time without us worrying about network loads and things of the sort.

Let’s get some perspective. The whole Ethereum could not support even a single fully decentralized application right now because it’s just too slow. Don’t even ask about thousands of them.

There are other blockchains in the cryptoverse, and some of them are way faster, but the problem about speed is that all these projects are striving to achieve mass adoption and if they succeed in that, then their networks won’t be able to support many completely decentralized apps. This is not pessimistic, it’s just state of the art.

And we haven’t mentioned obstacles such as fees, gas prices, storage, etc. yet. Those issues are very relevant and merit an article of their own (which maybe we will write soon in the future) but, for now, let’s just stick to speeds and network loads because that’s enough to preclude the appearance of true decentralization for now.

So how can we get true decentralization?

For a start, all the items in the centralized pieces list above need to become as decentralized as technologically possible. IPFS created decentralized object storage which is how we know that each of those problems can be solved with a combination of hard work and ingenuity. IPFS even has a candidate solution to address the centralization issue in user interfaces.

The other items in the list still lack any reasonable decentralized substitute, and until there is one (preferably, several) true decentralization will remain the stuff of computer Sci-Fi.

This shouldn’t stop you from enjoying the plethora of nice apps you can find in Tron or EOS, for instance. Just know that things aren’t always what they say they are.

Are we nitpicking? Are we too technical? Maybe. But all those benefits that decentralization is supposed to bring into the world won’t materialize in the cryptosphere if decentralization doesn’t really exist, or if it exists only for the network’s ledger. So don’t be disappointed if it looks as if the brave new decentralized world just looks like the good old one, just involving digital assets. That’s exactly what it is.

[Image courtesy of PixaBay]

Disclaimer: All information provided through this article should not be regarded as investment advice, nor should be taken for granted for crypto trading purposes. Before making any investment or trading plans, make sure to inquire about the information diligently by carrying out your very own research. Thank you.

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