Learning the friendly way

ICO is an abbreviation for Initial Coin Offering, a term coined supposedly in 2013 yet only gained popularity in 2017. ICOs were created as a method of raising funds for cryptocurrency projects in a crowdfunding manner. When people partake in an ICO, through funding it, they receive "shares" of that project in the form of cryptocurrency tokens.

This method is set up to help new projects find funding to build their project, platforms, or products. It's very similar to investing in a start-up in the hopes of a project becoming bigger and better through your investment contribution.

Mastercoin was the first ICO recorded back in 2013, raising a grand total of 5,120 BTC. Shortly after, Ethereum followed, and in 2014 raised roughly $18 million to build their project. There is clearly a great deal of success to be seen through ICOs, so let's see what all the fuss is about.

ICO vs IPO vs IEO

Let's look at IPOs, or initial public offerings, to learn more about where ICOs originated.

Similar to ICOs, IPOs were created as a way of gaining capital to better the businesses' infrastructures. While they are similar to a crowdfunding aspect,the primary distinction is in how investors are rewarded. IPOs will offer their investors shares, while ICOs offer digital currencies that can be used within their ecosystems or can be sold when the price increases.

Now that we understand how ICOs and IPOs work, let's discuss the differences when it comes to IEOs, or Initial Exchange Offerings. Again, this is another method used to raise funds for upcoming projects, but there are some key aspects that make IEOs different to IPOs and ICOs. While IEOs are also a crowdfunding method in the cryptocurrency industry, they use an exchange. Anyone can generally buy tokens from an ICO page, whereas IEOs use exchanges as the distribution mechanism.

In order to take part in an IEO, you must be a registered user of the exchange that the project is utilizing. While IEOs may be more transparent, they do push us towards a more centralized approach. There are also IDOs, Initial Dex Offering, Dex standing for decentralized exchange (increasing the data privacy aspect), but that's a topic for another day.

How they work

So now we know what ICOs are and how they differ from their counterparts, but now let's delve deeper into how ICOs actually work. As stated, ICOs are a way for cryptocurrency projects to raise money. When a project decides to launch an ICO it will generally underline the sale dates, the participation rules, and the buying process.

Usually, investors will need to choose currencies they are happy to accept in exchange for their tokens, such as Mastercoin accepting Bitcoin. There are some ICOs who will also accept fiat currencies as payment.

The projects' core purpose, its timeline, and how much money is needed to succeed should be released in their whitepaper. If the project does not raise enough money to meet the minimum funds needed, the money should be returned to those who contributed. This would classify the ICO as unsuccessful.

If the funding goal is met, the project will continue to pursue its original goals and contributors will be able to claim their tokens further along. Tokens will either be listed on notable exchanges later on or will be distributed using smart contract technology,This is something you should do more study on before contributing to an ICO.

Advantages and disadvantages

While ICOs have proven to be a massive benefit to project developers, there are some underlying issues and risks that may come into play. In order to give you the best chance of understanding ICOs we will need to cover all the pros and cons that come with ICOs. So let's see what you have to look out for:

Pros

        High potential profits

        Accessible to anyone (unlike IEOs)

        Money returned if unsuccessful (smart contacts)

        Transparency on fund usage (Blockchain)

        High liquidity

Cons

        No intrinsic value

        No legal guarantees

        Potential fraud

Frequently asked questions

Now that we have covered the basics, there are some additional questions the internet has and we thought we would take the time to answer them for you. These are the most frequently asked questions about ICOs, and while we have answered some here is a more TL;DR breakdown:

What does ICO mean?

ICO stands for Initial Coin Offering, a phrase coined by the cryptocurrency industry.

What is the purpose of an ICO?

ICO is a method used to raise funds for up and coming projects, think of it as an early investment phase.

How do I get an ICO?

That depends on the ICO you want to partake in, you will generally need to sign up to the ICO, deposit funds, and wait for the tokens to be distributed either through an exchange or smart contract. This differs depending on the projects' ICO parameters.

Is Bitcoin an ICO?

No, Bitcoin required no funding, tokens were mined and sold without the need for crowdfunding.

How many ICOs are there?

There is no definitive number out there but consensus shows that there have been roughly over 7,000 businesses that have attempted ICOs.

Are ICOs safe?

This is a tricky question and depends greatly on the individual project that is hosting an ICO, whether they are using smart contact technology, and how legitimate the team behind it is. ICOs can be safe, but they also carry risks, it is always best to do your own research before investing.

As there is no universal authority on ICOs there is certainly a lack of regulation in the space so be sure to do thorough research before parting ways with your money.

Closing Thoughts

That is all the essential information you need to grasp in order to better understand what an ICO is. From the textbook definition to its competitors, how it works, and everything in between. ICOs are popular for a reason, they offer a range of benefits to both projects and investors, but you should keep in mind that there is no benefit without risk.

While we can explain what an ICO is, we can not tell you whether to invest in an ICO. It's important to vet the project for yourself and see if it aligns with your interests, and more importantly if it has all the key components for a legitimate project and token.

While the world is increasingly accepting of ICOs from both businesses and retail investors standpoints, there are several alternatives available. We briefly discussed IEOs and IDOs, but more crowdfunding methods have flourished from the origins of ICOs, so be sure to explore those out too. At the end of the day, we hope we helped you better understand what an ICO is.

In this article, we’re exploring the most recent addition to the list of supported cryptocurrencies on the Tap App, one of the highly esteemed top 20 cryptocurrencies based on market cap, Algorand (ALGO).

What is Algorand (ALGO)?

Algorand is a decentralized blockchain platform that supports the development of a wide range of dapps (decentralized applications). The platform has been used to create dapps across industries like real estate, copyright, microfinance and more. Launching the same month as its ICO, the Algorand mainnet officially went live in June 2019. 

The Pure-Proof-of-Stake (PPoS) network was created to improve efficiency and transaction times within the crypto space, as well as reduce transaction costs. With no mining (due to the PPoS consensus), Algorand represents a more sustainable and energy-reserving contribution to the space. 

A unique aspect of the platform is that as new ALGO enter circulation with the creation of each new block, the newly minted coins are distributed to everyone who holds a certain amount of ALGO in their wallets. 

While the project is relatively new, it has received the backing of big names and has seen impressive company interest. In June 2021, Arrington Capital bet $100 million on the platform after launching a fund supporting initiatives building on Algorand, while fintech infrastructure provider Six Clovers launched a cross-border payment system on the platform. 

The platform was also selected to host the Marshall Islands CBDC. 

Who created Algorand?

The blockchain platform was created by Silvio Micali, a highly regarded contributor to the crypto space and recipient of the 2012 Turing Award. The MIT computer science professor was recognised for his fundamental contributions to “the theory and practice of secure two-party computation, electronic cash, cryptocurrencies and blockchain protocols.” 

The Algorand whitepaper was co-authored by Stony Brook University professor Jing Chen.

When first conceptualised in 2017, Micali wanted to create a platform that not only provided digital transactions but also tracked assets like titles and property. The platform also allows for the creation of smart contracts (decentralized digital agreements) and tokens. 

How does Algorand work?

The Algorand platform is divided into two layers: layer 1, responsible for ​​ensuring the network’s security and compatibility, and layer 2, responsible for more complex developments. 

Layer 1 supports asset creation, smart contracts, and atomic swaps between assets while layer 2 is reserved for more compound smart contracts and dApp development. These two layers allow the network to process transactions more efficiently, with simple transactions taking place on layer 1, while more complex smart contracts are executed off-chain. 

Through the pure proof of work consensus, the two-phase block production is conducted through a propose and vote system where users who stake ALGO are randomly selected to validate and approve each block as it is created. Stakers only need to hold 1 ALGO in order to generate a participation key necessary to become a Participation Node. 

These nodes are coordinated by Relay Nodes which are not actively involved in the verification process but are responsible for facilitating communication among the Participation Nodes.

The more of the native cryptocurrency a user holds, the more likely they are to be selected. This consensus ensures that the platform is secure, decentralized and able to process transactions in seconds as opposed to minutes (as on other networks).

Algorand is able to process over 1,000 transactions per second (TPS) and validate transactions in less than five seconds.

What is ALGO?

ALGO is the native token to the Algorand platform. As the newly minted coins are distributed to all users holding ALGO (whether on an exchange or in a non-custodial wallet) and not just the nodes verifying transactions, holders of the token are able to earn a 7.5% annual percentage yield (APY). 

A total of 10 billion tokens were minted, with roughly 6.8 billion in circulation at the time of writing. These tokens are gradually entered into circulation through predetermined distribution channels. The token distribution for ALGO is as follows:

• 3.0 billion. To be injected into circulation over the first 5 years, at first via auction.
• 1.75 billion. Allocated to participation rewards.
• 2.5 billion. Allocated to relay node runners.
• 2.5 billion. Allocated to the Singapore-based Algorand Foundation & Algorand, Inc.
• 0.25 billion. Allocated to end-user grants. 

How Can I Buy ALGO?

If you’re interested in accumulating this leading blockchain token, you can do so effortlessly through the Tap app. As part of a new string of supported tokens, Tap users will now be able to buy, sell, trade and store the cryptocurrency that everyone is talking about. 

This year has proven to be historical both in terms of substantial market fluctuations as well as regulatory development across a wide range of jurisdictions. As leadership around the world gears up to provide a much needed regulatory framework surrounding the blockchain and cryptocurrency industry, we explore the factors these bodies will need to consider in order to find the balance between implementing crypto regulation without stifling innovation.  

Why regulation is necessary

There has long been a stigma in the industry against the regulation of cryptocurrencies, with many believing it will hinder the free-world currency. As Bitcoin and subsequent cryptocurrencies were created to oppose the constructs placed on people’s finances by governments and financial institutions, some feel that regulation will disarm the decentralized nature of its use. 

This is however untrue. With regulation comes widespread education and, many believe,  adoption. With more frameworks in place constituting what one can and cannot do with the digital assets, comes clearer concepts of what the currency can achieve, and more fingers in the pie, so to speak.

At this point, it would be foolish to assume that a wave of regulation is a remote possibility. Governments around the world are in the midst of creating their own regulation and enforcement memorandums, some being more public about it than others. 

What factors crypto regulation policymakers need to consider

For many industry insiders, this move is a positive step forward, and a vital one if the industry is to become an integral part of daily life, as anticipated. According to Everett Rogers’ technology adoption lifecycle model, as more investors outside of the blockchain industry turn to digital currencies purely based on the regulation in place, the lifecycle of adoption steadily increases. 

As the key goal here is to protect investors from financial losses, there is concern that any stifled, misguided policies will hinder the innovation and prosperity of cryptocurrencies. Hence, here are the following factors that deem most important when walking the tightrope trying to find a balance between the two goals. 

• Market Participation

In order to properly understand and implement policies regarding the crypto market, prominent figures in the industry should be consulted. Typically, most governments don’t have a team of crypto-enthusiasts to converse with. 
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Market participants should be at the centre of their debates and should provide valuable insight as well as vast expertise into how digital payment systems function. Policymakers need to ensure that they are collaborating with appropriate expertise should they wish to get this right.

• Gradual Implementation

While it might seem tempting to build and implement a highly complex regulatory framework around an industry that is just over a decade old overnight, this process needs to be done slowly and intricately if it intends to succeed.
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There is little need to rush to impose policies across the board without proper and thorough examination and reflection. Instead of barring the industry with sanctions that might make little sense, policymakers should consider taking a slow and steady approach to build regulation governing the industry, as the consequences of not doing so can be dire. 

• Deserved Recognition

Giving credit where credit is due, cryptocurrencies are unique assets and cannot be treated with the same standards as stocks, commodities, etc. The digital currencies process distinctive characteristics that need to be respected and celebrated as opposed to sanctioned by people in power who do not understand their worth. 
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Therefore, outdated policies need to be rebuilt if they wish to be constructive. 
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As the first globally decentralized industry, the blockchain and cryptocurrency industry requires a slow and steady implementation of regulation, one that materializes organically as opposed to in a rushed, authoritarian manner. By opening a dialogue between policymakers and private-sector expertise, the process can be developed and debated at a pace that guarantees success.

Regulation Efforts To Date In The US

Considering that an estimated 46 million people in the United States hold cryptocurrency and that the DeFi (decentralized finance) industry has grown by over 6,000% this year alone, a number of regulatory bodies in the US have geared up to take action. 

Various bodies have taken different ventures into the crypto regulation space, with the President’s Working Group on Financial Markets studying stablecoins, Congress introducing legislation that ensures “comprehensive” crypto regulation, and the SEC threatening and suing cryptocurrency companies at an alarming rate.
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To date, the SEC has been in a complicated legal battle with RippleLabs, the company behind XRP, and scared Coinbase from launching a Lend feature with threats of legal action if they do so. Tom Emmer, a lawmaker interested in blockchain, has called out the SEC for their threatening manner, citing that:
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“I disagree with [SEC Head Gary Gensler] strenuously when he suggests that almost all of these [crypto products] are securities. I think the vast majority of cryptocurrency offerings or related offerings are actually currencies or commodities. The SEC is not involved. If the SEC were to deem one of these coins a security, the value of that token would plummet. And those retail investors would be seriously hurt — that’s directly the opposite of his mission and his authority.”

Finally, the international pioneer in combating money laundering, the Financial Action Task Force, has issued a draft guidance report encouraging countries to regulate unhosted wallets in an attempt to hold those who profit from these accountable. 

Regulation Efforts To Date In The UK

The United Kingdom has also set about to regulate cryptocurrency trading, however, in a less disruptive manner. The regulatory body, the Financial Conduct Authority (FCA), targeted trading platforms requiring them to present information required in order to verify and certify their company practices. 

One of the largest crypto trading platforms failed to do so and subsequently lost the right to provide services to UK citizens. While trading of digital assets in the UK is not strictly prohibited, the platforms offering these services are required to be registered with the FCA and prove that they comply with anti-money laundering rules, particularly in the crypto derivatives market. 

More recently, the deputy financial stability officer for the Bank of England, Jon Cunliffe, called for crypto regulation to be pursued as a matter of urgency, warning that crypto poses “a rapidly growing threat to the global economy.”

Cunliffe went on to compare the 2008 financial market crash to what could occur should the crypto markets take on a similar crash. He noted that the instigator in the crash, the $1.2 trillion subprime market, was but a tiny portion of the $250 trillion global financial system at the time, and a significantly smaller segment of the market than what the cryptocurrency market is today.

This is largely due to a report released by the IMF (International Monetary Fund), calling for governments to create a regulatory framework around the world. The report further warned that heightened adoption could weaken fiat currencies, destabilise capital flows, and promote tax evasion. 

With Regulation Comes Growth

As this technical revolution continues to develop and grow, regulatory bodies around the world must work constructively to build and implement regulations that support the benefits that cryptocurrencies have to offer and allow society to evolve into a superior version of itself as a result.

There is little doubt that the cryptocurrency market is now on the top of the agenda for central bank leaders and finance ministers around the world. While cryptocurrencies weren’t designed to be contained by (government-constructed) laws, regulation is a necessary step forward in the worldwide adoption of digital assets. Regulation should be viewed as an accolade instead of a hindrance. 

With more structural framework, comes an indubitable acceptance that cryptocurrencies have entered mainstream financial markets, proving that they are indisputably here to stay.

n the world of finance and technology, benchmarks are a vital tool for measuring performance and quality. A benchmark is a standard or point of reference used to evaluate the performance or quality of something, such as investment returns or the efficiency of software and hardware systems. This article will explore what benchmarks are, why they are used, provide examples, and explain how to use benchmarks to make more informed investment decisions.

What is a Benchmark?

A benchmark is a standard of comparison used to evaluate the performance or quality of something. In finance, benchmarks are often used to compare the performance of investments to a specific market index. For example, the S&P 500 index is a commonly used benchmark for evaluating the performance of a portfolio of stocks.
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Benchmarks are also used in the technology industry to evaluate the efficiency and performance of hardware and software systems. For example, a computer's processing speed may be benchmarked against industry standards to determine how well it performs compared to other computers on the market.

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Why are Benchmarks Used?

Benchmarks are used for a variety of reasons. In finance, benchmarks are used to evaluate the performance of an investment or a portfolio of investments. By comparing the performance of an investment to a benchmark, investors can determine whether their investment strategy is successful or not.
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In the technology industry, benchmarks are used to evaluate the efficiency and performance of hardware and software systems. By benchmarking a computer or a software system against industry standards, developers can determine how well their product performs compared to other products on the market.
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Examples of Benchmarks
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There are many different benchmarks used in finance. Here are a few examples:
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1. S&P 500 Index - This is a benchmark used to evaluate the performance of a portfolio of stocks in the United States. It is widely used by investors as a measure of the overall performance of the U.S. stock market.
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2. Dow Jones Industrial Average - This is another benchmark used to evaluate the performance of the U.S. stock market. It is based on the stock prices of 30 large U.S. companies.
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How to Use Benchmarks

To use a benchmark, you first need to select the appropriate benchmark for your needs. For example, if you are evaluating the performance of a portfolio of stocks, you would select a stock market index such as the S&P 500 or the Dow Jones Industrial Average.
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Once you have selected a benchmark, you can compare the performance of your investment or product to the benchmark. If your investment or product outperforms the benchmark, then it is considered successful. If it underperforms, then you may need to adjust your investment strategy or product development.
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How Do Benchmarks Help You Make More Informed Investment Decisions?

Benchmarks help investors make more informed investment decisions by providing a standard of comparison for investment performance. By comparing the performance of an investment to a benchmark, investors can determine whether their investment strategy is successful or not.

For example, if an investor's portfolio of stocks outperforms the S&P 500 index, then the investor can be confident that their investment strategy is successful. However, if the portfolio underperforms the S&P 500, then the investor may need to reevaluate their investment strategy.

Benchmarks also help investors identify trends in the market. By tracking the performance of a benchmark over time, investors can identify trends in the market and adjust their investment strategy accordingly.

Conclusion:

In conclusion, benchmarks are a fundamental tool used in finance and technology to measure performance and quality. They provide a standard of comparison that helps investors and developers evaluate the success of their investments and products.

Using benchmarks to evaluate investment performance and product efficiency can help you make more informed investment decisions. By comparing the performance of your investments or products to industry standards, you can determine whether your investment strategy or product development is successful or not.

Overall, benchmarks are an essential tool for evaluating performance and quality, and understanding how to use them is crucial for success in finance and technology.

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Have you heard of the term “altcoin” but not exactly sure what that means? In this article we’re breaking down everything you need to know about altcoins, from the different types of altcoins and how they work, to how you can get your hands on them (buy altcoins). The crypto industry can often feel a little daunting, so we’re here to clear the air and help you establish a strong foundation of insight, knowledge and know how. 

Starting at the beginning, what are altcoins? Altcoins are all cryptocurrencies except for Bitcoin. Not too complicated, is it? Circling back to the early days of the crypto industry when there were only a few cryptocurrencies on the scene, any new coin that was introduced was referred to as an “alternative coin” (labelling it as an alternative cryptocurrency to Bitcoin), which was then shortened to altcoin. So when someone refers to an altcoin, know that they are talking about any cryptocurrency that is not the original (Bitcoin). Altcoins are still decentralized networks, with most of them utilizing blockchain technology.

How Many Altcoins Are There?

At the time of writing, CoinMarketCap reports that there are over 9,400 altcoins in the cryptocurrency industry. This number is increasing by the day, however it’s worth mentioning that these 9,400+ altcoins only make up 50% of the entire cryptocurrency market’s value. Bitcoin is still the most dominant cryptocurrency, with Ethereum the next bigger cryptocurrency. Ethereum is currently responsible for holding roughly 14.5% of the entire market’s value. As Ethereum is also an altcoin, this makes the “altcoin industry” worth $1 trillion. In general terms, one would rather just say the crypto industry.

The Different Types Of Altcoins

With an industry worth over $1 trillion, there is bound to be a wide range of variation. This is just the case with the crypto industry. There are a number of categories that have been created over the years, allowing for various altcoins to provide a new service to the industry. You can also expect to see tons of innovation in the altcoin space, as each new altcoin needs to either improve on the last one, or provide a different use case.

Each cryptocurrency is designed to solve a problem, either faced within the blockchain industry or outside of it, however, many of these have created a niche altcoin market. An example of this is altcoins focused primarily on providing anonymous transactions, these altcoins then fall into the Privacy category. We’ve detailed seven of the main categories below to give you an indication of the vast innovation and use case potential within the space. 

Payment Focused Altcoins

First and foremost, these cryptocurrencies’ primary aim is to provide a medium of exchange within the digital currency realm. Focusing on payment functionality, these digital currencies are akin to Bitcoin and often were created as a “better” version of BTC (through hark forks on the network). Some examples of this include Litecoin (LTC) and Bitcoin Cash (BCH). 

Protocol Focused Altcoins

Protocol focused altcoins are designed to allow developers to work on their blockchain network to create decentralized apps (dapps), smart contracts, and in some cases other cryptocurrencies. They provide space for innovation within the blockchain industry, and empower developers to learn and grow their blockchain understanding. Examples of protocol focused cryptocurrencies include Ethereum (ETH), Tron (TRON) and Neo (NEO). 

Privacy Focused Altcoins

As mentioned above, privacy focused cryptocurrencies provide users the opportunity to send private transactions that are entirely encrypted. While these networks often garner a bad name due to them being used for illicit activities, they are in essence not far from what Satoshi Nakamoto originally intended for Bitcoin. Each network uses slightly different protocols, however they all provide the means to send secure, anonymous transactions. Examples of privacy focused cryptocurrencies include Monero (XMR), Zcash (ZEC) and Dash (DASH).

Stablecoins

You’ve likely heard of stablecoins before. They are the digital currencies that are pegged to a fiat currency. Providing a stable market inside of what has become known as a highly volatile market (cryptocurrencies as a whole), stablecoins offer a hedge against market dips as well as an entry point for users who want to get a feel for the crypto industry. Examples of stablecoins include USD Coin (USDC) and Tether (USDT) which are both pegged to the US dollar, trading at a 1:1 ratio (i.e. 1 USDT will always be worth $1). Stablecoins also include cryptocurrencies pegged to the value of commodities such as gold and oil.

NFTs

NFTs (non fungible tokens) have had their fair share of mainstream media attention recently, especially after one NFT broke records when sold for millions of dollars. NFTs are actually unique crypto assets that cannot be used in the same way that other digital currencies can be. Each NFT holds unique characteristics that represent a one of a kind product, whether it be a piece of digital art, physical art, a house, or even a luxury handbag. These altcoins cannot be recreated, and hold all their transaction history (previous ownership) on a transparent blockchain. They also cannot be “spent” in the same way as other cryptocurrencies in that one an NFT is created, it has that purpose attached to it for life (unlike BTC which can be spent interchangeably).

CBDCs 

CBDCs (central bank digital currencies) are similar to stablecoins but are created and maintained by financial institutions like banks. These currencies’ value is pegged to the local currency, and allow countries to test the efficiency of digital currencies without the volatility. Many countries are in the development phase of CBDCs, however China is leading the pack having recently launched their testing phase. 

Utility tokens

Utility tokens are blockchain tokens that are unique to a particular platform. Many cryptocurrency projects have created utility tokens as a means of crowdfunding prior to their launch, while other projects create utility tokens to be used within the platform for goods and services. Typically, utility tokens have been ERC-20 tokens, and might allow a user access to a new level of a game or to a subscription of some sorts.

How to Get Altcoins

Having gained an understanding of altcoins, individuals eager to explore the thriving altcoin market can effortlessly leverage the capabilities of the Tap app. Tap offers seamless access to an extensive spectrum of cryptocurrencies, including notable names such as Ethereum, Litecoin, XRP, and an assortment of others. It's crucial to bear in mind that not all cryptocurrency wallets exhibit compatibility across the board. For instance, attempting to house an altcoin like XRP within your Bitcoin wallet or stow Tron within your Ethereum wallet would not work due to their incompatibility.

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When exploring the world of blockchain and its endless possibilities, it’s likely that you’ve come across the term dapps. But what are dapps? In this piece we explore the concept, decipher their place in the industry, and look at several networks that currently support them.

What are dapps?

Decentralized apps, or dapps as they’re more commonly known, are applications that are built on top of peer to peer decentralized networks. Instead of being built on one computer, with one single entity in control, dapps utilize a network of computers based anywhere around the world. With multiple computers operating and maintaining the network, dapps are able to incorporate many streams of content consumption, be it providing content, trading or consuming it. 

The advantages of dapps

Compared to standard web apps, like Twitter or Uber, these apps can handle multiple users but only one authority has control over the backend of the app. Dapps provide a more decentralized and secure approach. So while Uber connects passengers to drivers through the app for a portion of the payment, dapps essentially allow the drivers and riders to connect directly, taking no payment for the connection.

Another advantage to the world of dapps is that all transactions are transparent and stored on the blockchain of the network it is built on. Dapps also need a token to operate, which enhances the security of both the dapp and the transactions taking place. Typically dapps are also open source, allowing other developers to view the code and further drive development in the industry.

The disadvantages of dapps

As with anything in life, there are also disadvantages. As the world of dapps is still in its infancy stage, the user base is relatively low. When it comes to blockchain based projects, the more users a network has the higher functioning the network is. Unfortunately, many dapps still have a relatively low user base decreasing the functionality, however that doesn’t speak for all of them. As the blockchain and crypto worlds continue developing and reaching wider audiences, both the usability and users will increase. 

Another disadvantage is the potential vulnerability to hacking. As most dapps are created using open source smart contracts, this leaves them open to potential probing from hackers. This isn’t a given, however it has happened in the past that hackers found weaknesses in the network and were able to conduct illicit activities through them. 

How many dapps are there?

According to a dapp monitoring website, State Of The Dapps, there are currently roughly 3,500 dapps in the industry. These are spanned across a wide range of networks, including the likes of Ethereum, EOS, TRON, NEO, Steem and more. The website further reports that over $257 million has passed through the dapps industry in just twenty four hours (at the time of writing). Dapps also cover a broad range of subjects, with dapps catering to industries like energy, exchanges, finance, gambling, games, health, identity, insurance, marketplaces, media, property, security, social, storage and wallets. The most widely of which are finance, security and exchanges.

A look into Ethereum dapps

The most widely used network to create dapps on top of, Ethereum has over 2,700 dapps built on its network. Ethereum was the first network designed to provide a blockchain platform on which developers could build their own decentralized applications. Ethereum was also the first network that allowed developers to create and execute their own smart contracts, an essential ingredient to the making of dapps. 

According to DappRadar, the three biggest dapps currently on the Ethereum network are DeFi projects and an exchange. Coming in at first place based on its current market cap is Uniswap, a defi protocol (exchange) that facilitates the trading of cryptocurrencies. Uniswap has an estimated 48,950 active users. Also dabbling in the world of DeFi, the second largest dapp on the Ethereum network is compound, a protocol that allows users to lend and borrow crypto. The third largest is MakerDAO, a smart contract that facilitates user interaction with the Dai stablecoin system.

A look into EOS dapps

Similar to Ethereum but with fewer transaction fees, the Entrepreneurial Operating System was designed to provide developers with a platform on which to build their blockchain based endeavours. As the second largest platform on which dapps are currently created, let’s explore the three largest dapps currently operating on the network. Coming in first place is Joule, a dapp which promotes financial inclusion and social change through determining the Global Popularity Index in real time. The next two entries both fall into the DeFi category, being Defibox and VIGOR.

The power of dapps

While many dapps are still in the experimental phase, there is also a large amount of money circulating in the industry and millions of users indicating a promising market. Thanks to dapps’ wide use range and the amount of innovation in the industry at present, the dapp industry is likely to continue growing and become a permanent fixture in many peoples’ lives, whether crypto inclined or not.