A decentralized application (decentralized app or distributed application), also known as a dapp, is an application that runs on a computer P2P network (rather than a single computer or server). A dapp's code is open source, or the core part of the data interaction is done by open source smart contracts deployed on the blockchain. It usually comes with incentives powered by tokens and is not controlled by a single entity. Thanks to the nature of the blockchain, a decentralized application’s data is open, transparent and cannot be tampered with.
Around the end of 2017, decentralized applications had begun to be adopted by the market, with the emergence of non-fungible tokens. These tokens make the creation and trading of scarce and unique digital assets possible, as demonstrated by CryptoKitties. As developers explored the possibilities offered by smart contracts and decentralized applications, more than 2,000 decentralized applications were developed on Ethereum, EOS, TRON and Steem by the first quarter of 2019. In 2018, 1,423 dapps resulted in a total transaction volume of over $6.5 billion - with each dapp generating an average transaction volume of over $4.5 million. Comparatively, in the first year of Apple’s App Store, 65,000 mobile apps were created. These generated around $4.2 billion revenue in total, averaging only $65,000 per app. Decentralized applications are still in the early stages of development but they have initially proven their value, and have created a large and fast-growing new economy.
Since 2018 many large teams and publicly listed companies have started to invest in researching and developing decentralized applications - especially in the fields of gaming and social networking. Mass creation and adoption of decentralized applications is coming.