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3 Reasons the Future of Apps Will Be Decentralized

Blockchains are disruptive by nature. In the words of Vitalik Buterin, co-founder of Ethereum, “instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer.” What does that mean for the future of apps?

Deep dive
January 10, 2023
Lead Content Manager
Where do apps go from here?

It is hard to predict how the future of apps (or any tech for that matter) will shape up. Yet, Web3 apps on blockchains are already a key emerging category, offering new paradigms that benefit both developers and users. 

Apps Have Always Evolved

Blockchain technology is powering a new generation of apps–called Web3 apps or decentralized apps (dApps for short). This new generation of apps enables peer-to-peer interactions without centralized intermediaries. These user-owned, permissionless apps may sounds counterintuitive to how we think about apps, yet the evolution of apps is a story about empowering users and giving them greater accessibility and optionality. A permissionless environment is the latest evolution of that trend.

For instance, desktop apps (those designed to run on computers) have been around since the 1970s. Then the first generation of mobile apps emerged in 1994 with the release of IBM’s Simon smartphone. These mobile apps pushed the boundaries of what was possible by making apps more accessible, portable, and forcing developers to build with smaller form factors. That accessibility has led to widespread popularity: global mobile web traffic surpassed desktop traffic in 2017

Beyond mobile apps, we’ve also seen the emergence of web apps and hybrid apps. These types of apps continue to push the trend of accessibility forward and enable users to interact with apps, regardless of what operating system or hardware device they use. 

And now, we are in the earliest days of Web3 apps. These apps are powered by smart contracts, and they run on decentralized networks, unlike traditional apps that run on centralized servers. With Web3 apps, users can enjoy more ownership, freedom, and privacy without having to go through centralized platforms when using digital services. Below are three reasons the future of apps is in Web3.

Open Source Often Wins Over Closed-Source Projects

The internet emerged as the leading global network we know today because it is fundamentally open source. The internet was designed to be an ever-growing network of interconnected services exchanging data and benefiting from the wisdom (and the innovation) of the crowd. 

But in fact, the internet as we know it had competitors. There were other proprietary networks being developed at about the same time as the internet in the late 1970s and early 1980s. These included the Xerox Network Systems (XNS) developed by Xerox Corporation, Systems Network Architecture (SNA) developed by IBM, and the DECnet networking system developed by Digital Equipment Corporation (DEC). Today, these networks are practically extinct and only used in a few legacy systems because they didn’t encourage experimentation and innovation on top of them: they were proprietary, closed networks.

Similarly, other web protocols, such as HTTPS and email, are also successful because they are built with open infrastructure. We can also extend the argument about how open-source wins over closed-source systems to mobile operating systems. The open-source philosophy is one of the reasons Android OS overtook iOS, Symbian OS, and BBOS as a leading mobile operating system. In Q1 2009, iOS controlled 37.45% of the mobile OS market share; Symbian OS had a 36.94% share, BlackBerry had 4.37%, and Android had 1.69%. Today, Android has a 71% market share, iOS is a distant second with about 28%, and both Symbian OS and BBOS are no longer on the market. 

However, if we make a distinction between open-source infrastructure and applications–one could reasonably infer that closed-source applications have generally outperformed open-source apps. For instance, Photoshop overtook Gimp in photo editing, and Microsoft Office has outpaced Open Office. 

One of the reasons proprietary apps tend to outperform open-source apps is that there’s often no sustainable system for paying the bills to fix problems. And over time, talented and passionate developers working on open-source applications may move on to other challenges.

At the infrastructure and protocol levels, open-source projects don’t have problems with paying the bills because many individuals, enterprises, and institutions rely on them. So, more people are incentivized to improve and maintain such infrastructure. This explains why the Linux Foundation is supported through funding from a variety of sources, including donations, membership fees, and sponsorships from the likes of Google and Microsoft.

The user-owned nature of Web3 introduces the incentive missing in traditional open-source applications. People who use and contribute to the improvement and maintenance of Web3 apps have opportunities to benefit from the potential upside of projects through token incentives. This creates an economic incentive to contribute and help develop open-source applications in ways that weren’t possible in Web2.

The nature of Web3 also brings more fundamental value to apps at the protocol layer: it makes data open-source. Any developer building a Web3 app has access to the same blockchain data as any other, making it easier for developers to build apps that require large volumes of data that in a Web2 system may have been behind closed doors.

Web3’s Decentralization Aligns Users With App Creators

Web3 enables decentralization in app infrastructure. This has important ramifications for users and helps ensure that the app continues to evolve in the best interests of the app’s community. Web3 apps are built on blockchains where much of the app’s code is publicly available, and all activities are recorded on a public ledger. This transparency makes it easier for users to audit a Web3 app and verify whether what the app says is true.

Through token incentives, users can have an economic stake in Web3 apps, and many Web3 projects adopt governance models that ensure no single entity has dominating control over how the project evolves over time and that the community has a voice in the app’s direction.

In contrast, Web2 apps are simply too centralized and subject to vested interests that often pit an app's shareholders (individuals who want to see share prices go up) against users (individuals who want a great product). And in many cases, what could constitute great business decisions doesn't necessarily make for the best user experiences. 

For instance, Twitter originally had a thriving ecosystem where you could schedule tweets with TweetDeck, post pictures with Twitpic, and parse Twitter data through its firehose for use in different applications. Eventually, it started restricting its APIs to prevent developers from building new independent services around the Twitter feed. And it was only a matter of time before Twitter cut off access to services like DataSift and PeopleBrowsr to create its own big data platform. 

If Twitter were a Web3 app, it couldn’t unilaterally make a decision to restrict other developers’ data access. For one, the blockchain data is open and available to everyone, and no app can change that. Secondly, once published to a blockchain, a smart contract is there forever, and if the community doesn’t like changes to a particular contract, they can simply fork the project and use the previous version’s code.

In Web3 apps, users are better aligned with app creators, and there’s more incentive to make business decisions that best serve the community. That community alignment is a key indication that the future of apps is in Web3.

Blockchains Will Be Fairer Distribution Channels in the Future of Apps

Building Web3 apps enables you to distribute your apps through blockchain ecosystems and bypass the challenges of traditional app stores. In fact, blockchains replace app stores altogether. 

An app store is more than a library of apps; it is a powerful distribution channel that aggregates apps and lets users discover new software. However, app stores in their current form are centralized platforms that wield too much control and have three main flaws:

  •  App stores can geofence what apps a user can access, and they can also block developers from publishing apps or remove already-published apps altogether based on arbitrary and inconsistent parameters.
  • App stores mine data to predict what types of apps users will be interested in and then monetize that data. In fact, Apple is currently being sued for its data collection practices on the App Store, infringing upon consumer privacy.
  • App stores charge developers a cut of up to 30% of the revenue generated by their apps, an unfairly high rate that eats into developers ability to make a profitable app.

Blockchains remove these flaws altogether:

  • On a blockchain, users can access any app, and developers have the freedom to publish their projects, fostering innovation. Blockchains enable open market economics where any app can be put into the public, and the market decides which to use.
  • On a blockchain, all data is publicly available, and users do not give their personal information to a centralized app store. Their privacy can't be infringed on!
  • On a blockchain, there is no app store taking 30% of app revenue. This puts money back into the hands of creators, encouraging them to keep building.

For these reasons, and those above, Web3 apps are poised to succeed and become the latest evolution of the software app experience.

This Is the Best Time to Build Web3 Apps

Apps are always evolving, but no one can afford to ignore the role that Web3 will play in the future of apps. Web3 apps are emerging to benefit developers and users in ways that traditional centralized apps can’t. We are still in the early days, and there’s an opportunity to gain a first-mover advantage if you start building Web3 apps now. 

The best part? Web3 development borrows many familiar concepts from traditional software development. If you want to know what it takes to start building a Web3 app, download our free guide on smart contract development below:

Download Guide to Developing Smart Contracts
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