There are a tonne of fascinating new terms and concepts in the blockchain world. However, because we are still in the very early stages, these notions and terminologies are frequently inconsistent and full of ambiguity. If we don't understand each other when we use the same terminology, it gets hard to converse.

What is DApp?

An application must fulfil the following requirements in order to be deemed a Dapp (pronounced Dee-app, comparable to email):

The application must be completely open-source, it must operate autonomously, and with no entity controlling the majority of its tokens. The application may adapt its protocol in response to proposed improvements and market feedback but all changes must be decided by consensus of its users.

To prevent any central points of failure, the application's data and operational logs must be cryptographically saved in a public, decentralised blockchain.

The application must use a cryptographic token (bitcoin or a token native to its system) which is necessary for access to the application and any contribution of value from (miners / farmers) should be rewarded in the application’s tokens.

As evidence of the value nodes are adding to the programme, the application must produce tokens in accordance with a defined cryptographic algorithm (Bitcoin employs the Proof of Work Algorithm).

We further classified the DApps into three types based on how blockchain is being used.

Type I decentralized applications have their own block chain. Bitcoin is the most famous example of a type I decentralized application but Litecoin and other “alt-coins” are of the same type.

Applications classified as type II decentralised leverage the block chain of type I decentralised applications. Protocols and tokens required to operate are part of type II decentralised applications. One illustration of a type II decentralised application is the Omni Protocol.

The protocol of a type II decentralised application is used by type III decentralised apps. Decentralised apps of type III consist of protocols and require tokens in order to operate. One example of a type III decentralised application is the SAFE Network, which issues "safecoins" that can be used to purchase distributed file storage via the Omni Protocol.

This categorization suggests that Bitcoin is best understood as the Type I DApp, which is comparable to the conventional operating system. Ethereum has greater complexity. It is comparable to a hybrid Type I and Type II DApp, which is equivalent to an installed JavaScript (solidity) interpreter and a conventional operating system. Ethereum's Type III DApps, or JavaScript programmes running in NodeJS, are called smart contracts.

DApps vs Traditional decentralized applications

DApps are decentralised applications, but not all decentralised applications are DApps, according to the criteria given above. Because of the labelling decision, I suppose this is the most unclear aspect of the DApp concept.

Bittorrent and Freenet are two examples of typical P2P apps that are decentralised since P2P networks are by nature decentralised. They lack a federated verifiable global state since they do not use an organisation model akin to blockchain. They could not be seen as a single "virtual" application with rigid business logics as a result.

Blockchain, however, is, in my view, simply one method of organising P2P nodes, and it shouldn't be the only one. It's possible that current blockchain technology won't even exist in the foreseeable future. The term "blockchain" might become increasingly widely used to refer to a transparent computing process and verifiable global state.