What Are Bitcoin DApps?

Decentralized applications or decentralized apps (DApps) are decentralized applications that operate on the blockchain. This article will discuss Bitcoin dapps and their uses. Let's take a look!

Getting to know Bitcoin DApps

Bitcoin DApps are decentralized applications that run on a blockchain powered by Bitcoin and leverage the core features of the Bitcoin network

These applications generally use smart contracts on scaling, sidechain, and blockchain solutions that operate in conjunction with the Bitcoin mainnet .

Use of DApps

While Ethereum and other Layer 1 platforms have become the preferred choice for building DApps, creating NFTs, and hosting DeFi products and protocols , challenges regarding transaction throughput and fees on the Ethereum network have increased the demand for alternative options.

This is why, there are efforts to increase Bitcoin's utility in applications and smart contracts without compromising its security. Taproot merge is a step towards additional functionality for Bitcoin, and it gives rise to layer-2 scalability solutions, sidechains, and smart contract layers.

This solution allows the Bitcoin community to explore DeFi, NFTs, and new sectors.

What about Smart Contracts?

Running smart contracts directly on Bitcoin's core protocol layer has been shown to be suboptimal due to concerns about spamming the Bitcoin blockchain with excess transactions.

Layer-2 solutions such as Lightning Network , sidechains such as RSK (Rootstock Network), and smart contract layers such as Stacks are alternatives. 

RSK offers a smart contract solution with merged-mining security, fully compatible with the Ethereum Virtual Machine (EVM) .

On the other hand, Stacks' layer-1 solution is connected to the Bitcoin main chain through a Proof of Transfer (PoX) consensus mechanism, allowing developers to deploy smart contracts and DApps for the Bitcoin network while contributing to BTC miner revenue through native transaction fees on the BTC network.

Conclusion

Decentralized applications deployed for the Bitcoin blockchain using existing layer-1, layer-2, and sidechain solutions or separate programming layers are collectively known as Bitcoin DApps.

Also read:

What is a Distributed Ledger?

What is a Bitcoin ATM?

What is Bid Price?

What is the Bid-Ask Spread?

DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change randomly