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Brian Sewell, founder of Zion Trades, on the future of dApps, in an interview with the firm’s CMO, Tim Stone.

Tim Stone: How do you define “blockchain technology?”

Brian Sewell:

Blockchain technology is a type of “peer-to-peer” network (P2P) that enables a digital exchange of value without the need of a trusted third party to authenticate or record the exchange. The blockchain thus can provide more freedom — to conduct transactions, update ledgers, execute contracts, or access databases — without the control, surveillance, fees, and time constraints of an intermediary.

Tim Stone: And how do dApps relate to the blockchain?

Brian Sewell:

A “dApp,” or “decentralized application” is a program that’s “decentralized” because its creation on a P2P network enables it to exist on the internet outside the control of any single entity. A blockchain-enabled dApp harnesses the benefits of the blockchain to provide specific products or services. Those benefits include:

  • An Open Source Code (which promotes trust through transparency);  
  • Autonomy (i.e., it exists outside the control of any one party);
  • Digital Scarcity (the inability to counterfeit or dilute digital assets, including tokens such as cryptocurrency);
  • Immutability (i.e. can’t be altered);
  • Security Measures (i.e., robust encryption to reduce the risk of fraud);
  • Interoperability (compatibility with similar programs).

Tim Stone: Is bitcoin a dApp?

Brian Sewell: In contrast to simple “smart contracts” such as bitcoin, which sends money between two parties, dApps integrate smart contracts in order to accommodate a potentially unlimited number of participants. A dApp messaging application, for example, might enable multiple parties to communicate with one another, and free from the control of a central authority.

Tim Stone: How does Ethereum enable dApps?

Brian Sewell:

Ethereum provides developers a programming language, the ERC-20 token standard, to build a dApp. The ERC-20 consists of rules that an Ethereum token must implement. This enables developers to program smart contracts and decentralized applications that abide by common policies, while having customized rules for ownership, transaction formats, and transition functions. ERC-20 tokens became popular with companies raising money through ICO’s due to simplicity of deployment — developers could readily program a dApp on a reliable platform — and interoperability with other Ethereum dApps.

Tim Stone: What are notable examples of Ethereum-based dApps?

Brian Sewell:

As of November of 2018, there were over 2,200 ERC-20 token contracts. Among the most successful are EOS, Bancor, Qash, and Bankex, raising over $70 million each.

Tim Stone: What’s the state of dApp adoption?

Brian Sewell:

The number of new dApps being released per month stood at an all-time high in December of 2018 (179). That brought the total number of dApps to 2,432. Let’s look at the two most popular platforms, Ethereum and EOS: Since Ethereum has a long history of dApp experimentation, creating in-depth resources for developers, it remains the most popular platform for dApp creation. In Dec., 2018, for example, 105 Ethereum-based dApps were created, versus only 26 EOS dApps. But since EOS can handle far more transactions per second, it has over three times the number of dApp active daily users. Users of EOS-based dApps total roughly 52,000 versus only about 16,000 users of Ethereum-based dApps).

Tim Stone: Could Ethereum lose its position as the lead dApp creation platform?

Brian Sewell:

Ethereum had a first mover advantage as a dApp platform. Ethereum is scheduled to undergo several substantial changes in the next year, and as with any complex transformation, it’s unclear how smoothly the changes will go. Its recently postponed hard fork, Constantinople, comes in advance of a larger upgrade called Casper, expected to go live sometime in 2019, part of an even larger planned change. Casper will reportedly switch Ethereum from the proof-of-work consensus mechanism to the less energy-intensive proof-of-stake. The depth and breath of these planned changes inject an element of uncertainty into Ethereum as a dApp platform. It is unclear whether Ethereum will maintain its lead in the dApp race.

Tim Stone: Do you think RSK will challenge dApp market leaders EOS and Ethereum?

Brian Sewell:

RSK represents the first effort to readily incorporate bitcoin tokens directly into a smart contract. Since RSK is a smart contract side chain to the Bitcoin blockchain, it’s not an independent cryptocurrency, but a subset of bitcoin. It operates through a smart contract platform with a 2-way peg to bitcoin. RSK’s goal is to add value and functionality to the bitcoin ecosystem by enabling smart-contracts, near instant payments and higher-scalability. I find this a compelling value proposition, because bitcoin is such a robust, time-tested token and the leader by market capitalization.

Tim Stone: What dApps have used The RSK Platform?

Brian Sewell:

RSK is only about a year old, so it’s still at an early stage. But TEMCO is the first supply chain platform to be powered by the bitcoin network through RSK. It raised $19 million  for a utility token in an ICO last December in Singapore. That’s not a bad start for RSK. The firm’s CEO, Scott Yoon, recently gave some compelling reasons for using RSK as his dApp platform. He cited RSK’s relatively low “gas” (transaction) fee, and the fairly high TPS (transactions per second). This suits his business model, since in supply chain management, a lot of information is uploaded at once. Finally, he noted that bitcoin’s network was the largest, most dominant, and most secure. In his mind, it’s the “future ecosystem for blockchain projects.” I couldn’t agree more.

-end-

 

Brian SewellBrian Sewell is Founder of Zion Trades, www.ziontrades.com, a customer-focused cryptocurrency trading platform.

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This material is provided only for general educational purposes and is not investment, legal, tax or professional advice or an offer to buy or sell any assets. Opinions provided herein are exclusively those personal opinions of the author and should not be relied upon in making decisions regarding cryptocurrencies. This material may be inaccurate and there is no requirement that the author update this content or correct it at any time.