Since decentralized applications are not owned by an individual or a company, and are deployed on distributed systems, they have the following features:
Points of failure:
- DApp: No single point of failure because individual users’ machines don’t rely on a single central server to handle processes
- Centralized app: Single (or fewer) point(s) of failure: if the centralized server fails, the application network goes offline and no one can use the application until the error is fixed
- Security issues due to centralized data storage: If the server is hacked, all stored data about users like photos, videos, texts, or personal information can be leaked.
- DApp: User privacy: Users don’t have to provide real identities to create or interact with DApps
- Users information is stored on a shared database which no authority has control over.
- Information can only be decrypted by the user.
- Centralized apps tend to have higher costs. Applications such as YouTube take a percentage of the user’s profit from their posted videos to compensate for data processing and marketing costs.
- DApps can be more financially efficient since they can function without a middleman to take profits from transactions. Users can transact directly using cryptocurrency.
- Centralized apps follow both laws and regulations of their country as well their own arbitrarily decided Terms & Conditions in deciding which content to publish. For example,
- DApps have no central authority exercising censorship. Users cannot be blocked from submitting transactions, deploying DApps, or reading data from the blockchain. So users are responsible for legal and regulatory implications for the content they share or consume.