Approaching the blockchain and the revolution created by Bitcoin that is leading to a paradigm shift, i.e. a shift from a centralized internet to a more decentralized one, is not easy. Especially because the first contents, whether they are articles or videos, which we come across when we go to research for the first time on the world of cryptocurrencies, bitcoin, and decentralization, are almost all technical level contents that are difficult to understand, especially for a person that appears for the first time in this world.
The average person, who is the ultimate goal of this whole movement if you want to get to a total switch, isn't interested in understanding the hash, timestamp, or computing power. There will be plenty of people interested in learning more about new technologies and how they work, but they are a minority. They are a niche. And it is precise to this niche that most of the articles or videos that I have personally read and seen are addressed.
The average user does not want to know how TCP/IP works or how various websites are connected to each other. The average user wants to land on a website for a certain need and wants that website to solve it.
Here, in my opinion, we should create more content aimed at the average user that clearly explains the advantages of decentralized systems over centralized ones. And that's what we will try to do in this article.
Although Bitcoin was born with the precise aim of creating a new form of economic exchange, after Bitcoin various other blockchains and dApps (decentralized apps) were born with the aim of creating a new internet, more decentralized, secure, and convenient for the final user. This "revolution" can affect any field, starting from the financial one, passing through the medical, political, information or entertainment one, etc. Literally, any company that operates in the traditional method could operate in the world of decentralization giving its customers a safer and more convenient experience.
What is decentralization?
It is not the purpose of this article to specifically address decentralization what it is and how it works, but I believe a little recap needs to be done. Decentralization means operating on several entities and not a single entity. Specifically, on the Bitcoin blockchain, I rely on several operators who are computers (in jargon, nodes) who go to verify and approve my transactions. This system maintains that the so-called nodes must operate honestly because if they do they will be paid, and if there are malicious transactions (such as double spending) it is they who have to stop them and not approve them. In the case of Bitcoin, there are already millions of nodes, and to have an accepted transaction requires the approval of at least 51% of the nodes. So there will be millions of operators who will go to check your transaction and not individual employees as happens in the case of transacting with a bank.
Each blockchain operates differently, some are more decentralized, others less so. Some use PoW (Proof of Work), others PoS (Proof of Stake), DPoS (Delegate Proof of Stake), etc. In almost all decentralized blockchains, anyone can become a node, that is an operator that controls and approves transactions if it has certain requirements, which can be to have X tokens, have hardware devices for mining, or any other requirements. It varies a lot from blockchain to blockchain.
Having made this boring but necessary premise, let's go back to the principle of the article and let's see some real examples of DApps that exist on blockchain today and how they behave against centralized competitors. In this article, we will look at a Dapp vs an App for the financial, entertainment and information, web research, and gaming sectors.
Centralized Exchange VS Decentralized Exchange
I have to start with the financial field and we do it by comparing the advantages of a decentralized exchange with those of using a centralized exchange. For this example, we will use Coinbase versus Uniswap.
Coinbase is considered the most reliable exchange in the world, competing for this title with Binance. The main advantage of such an established centralized exchange is the ability to trade every day at all hours. Another advantage is that usually, the pairs listed are of already established projects and therefore do not tend to scam or rug pull. Furthermore on Coinbase liquidity is very deep and we will almost never have liquidity problems. The commissions are clearly written and are not very high, especially for trading. The three main disadvantages are that:
- - the user does not own the custody of his crypto (or assets) and although the risk is low for well-established exchanges such as Coinbase or Binance there is always the possibility of some hack, loss of assets, closure of the exchange, and other negative calamities.
- - the user is the customer. It can only trade, receive and send cryptocurrencies, it has no earning methods except in the rare cases of promotions.- the user cannot in any method influence which assets will be listed on these exchanges and therefore may be unable to trade some cryptocurrencies if not listed on it.
Uniswap is the most trusted decentralized exchange in the world, competing for this title with the latest addition PancakeSwap (although the latter runs on a centralized blockchain, namely the Binance Smart Chain). The advantage of Uniswap is that having been the first decentralized exchange that gave users the possibility to become liquidity providers, it has received so much popularity, which has led to a lot of liquidity.
Advantages of Uniswap:
- Users can become liquidity providers, or provide liquidity on the pairs listed on the exchange. By doing so, the users will take the part corresponding to their weight in the pool of the pair in question, of the fees generated. However, it must be specified that when you give liquidity to a pool on Uniswap, Uniswap will use our funds to continuously balance that pool, so when there are changes in% of certain assets, Uniswap will automatically go to sell or buy the other asset, in which could lead us to a loss. See Impermanent Loss. Furthermore, thanks to Uniswap, Yield Farming was born, i.e. projects that compensate you with other tokens if you deposit liquidity pool tokens on their protocol.
- Anyone can list on Uniswap. There is no selection. So the possibility of scam projects is very high, but the possibility of being able to trade on newly born projects is also much higher, being able to become early adopters long before they are listed on the most popular exchanges. For the problem of scam projects, here it is up to the end-user to know where to invest, and can help themselves through communities such as that of QIC, tehMoonWalker, or through tools such as BSCscan or Ethscan, or Dextools, Chartex.
- The biggest advantage, despite those listed above, remains the fact of having the custodial of your assets. When we trade on Uniswap the cryptocurrencies (or more specifically tokens) we buy, end up directly in our wallet giving us the fullest sovereignty over our assets.
- Operating on Uniswap last year gave its users an airdrop of their own UNI token, which at the time of distribution was worth around $ 1000. As of today, that airdrop would be worth $ 10,000 +.
Disadvantages of Uniswap:
- As mentioned before, anyone can list so there are a high amount of scam projects.
- Impermanent Losses can often be higher than the earnings due from fees.
- Uniswap operates on the Ethereum blockchain, so for each transaction, we will have to pay in addition to the 0.3% fees to Uniswap, plus a commission to the Ethereum network to be able to operate on it. In times of congestion like this, you can pay $ 100 or more per transaction. On average it is $ 60 right now. In times of calm in the market, an Ethereum transaction costs a few dollars or even cents.
- Some pairs with little liquidity. In addition to the problem of scam projects, there is the problem that some pairs may have little liquidity. Lack of liquidity can mean an important price change when we try to buy or sell our assets, or even the impossibility of being able to do so.
In general, I believe that for the assets listed on large exchanges, in times of congestion like this, it is convenient for the end-user to continue trading them on centralized exchanges. When Ethereum stops going into congestion or solves its scalability problems, whether through Eth 2.0 or through some layer 2 (FalconSwap, Loopring, Matic) the advantage of using decentralized exchanges is immense, both for one's privacy and for the sovereignty of its assets.
These are the advantages and disadvantages of using Coinbase or Uniswap. What do you think? Which one have you been using the most lately and why?
Let's move forward in the field of exploration of the centralized world against the decentralized one and see another example, to understand ourselves better. In this case, we will talk about search engines.
Presearch VS Google
Here the comparison may seem exaggerated, and perhaps it actually is. We are talking about a blockchain start-up with just over a million registered users against the Silicon Valley giant, a company of over $ 1 trillion that has monopolized the search engine market and has also bought various other companies (including which the largest Youtube). But let's try to make a comparison by focusing on the main use of Google and Presearch, that is to search on the internet.
When we use Google we will get a truly fantastic user experience. In the top 5-10 Google search results we will almost always find the answer to any question we were asking. Google works hard on improving the algorithm to reward more precise content, and therefore "forces" content creators to always create high quality content. In return, Google takes those queries that we type and stitches them on us, creating a highly detailed profile on our preferences and going to "bombard" us with advertisements with the things we like. Google offers a top notch free service, but ultimately we are the product.
Advantages of Google:
- Very high quality in search results
- Various services that separate from the search engine but which have just as much utility (Android, Youtube, Google Maps, Gmail, etc.)
Disadvantages of Google:
- We are practically a product from which to try to exploit as much as possible
- The user earns nothing from sharing their data. Data from 2000 onwards is pure gold
As mentioned before, Presearch is a start-up born just over two years ago. They have a token that in addition to having a use-case (that of being able to use it in staking to have the first place in the results in certain queries) that has a monetary value. As of today, around $ 0.06 per token. For a maximum total of 500 million tokens. Presearch offers a basic graphical interface that, in addition to giving the possibility to search on their search engine, recently launched, to search on other search engines. And by doing this through their website, it pays us back with tokens, up to a maximum of 32 “paid” searches per day. That is, Presearch not only makes us search on its or other search engines but also pays us. Until ten days ago, Presearch paid 0.25 PRE per search up to a maximum of 8 PRE per day. Lately, they have halved this figure, varying it from day to day but usually it is 0.12-0.13 PRE per search and has launched their own nodes. Today anyone with as little as 1000 PRE ($ 60) can become a node, and in addition to trying to help the protocol deliver the best possible results, they will make money and decentralize the network. Win-win situation, no?
Advantages of Presearch:
- You can opt for privacy
- Search results are increasing in quality, progressively over time
- You get paid to research
- You can become nodes, and in addition to earning, you help the network to become decentralized and better
Disadvantages of Presearch:
- Results not comparable in terms of quality to those of Google
In conclusion, we can very well understand how and how profitable it can be to be among the early adopters (yes, after two years and more we are still early adopters) of a decentralized search engine that supports its business on a token, which has a quantity limited to only 500 million. Google is unapproachable, also because over time they have been acquiring engineers, scientists, and programmers to make the experience for the end-user as good as possible, but Presearch is more convenient.
In the next example, I want to talk about Travel, even if it was not in my ideas when I was writing this article at the beginning. But even here, I remembered that there is an app that is much cheaper than centralized competitors, and maybe I would be happy if this article would be a way to let you know. I'm talking about Travala.
Travala VS Booking
Travala is an online booking site for accommodations, including hotels, apartments and lately it has also become a search engine for flights, and in the future, they will also implement vehicle renting. Travala jumped at me the first time because it had a disruptive use-case, that is, giving cryptocurrencies a way to be spent. If three years ago my uncle asked me and what can you do with Bitcoin? Can't you spend it? Can't you shop there? Can't you take a vacation? Travala was the answer to this last question. With Travala you can use Bitcoin (and other cryptocurrencies) to pay for accommodation in hotels or apartments and also to buy flights.
I would have to write pages on Travala, since it was among the first projects to strike me as regards the continuous construction and improvement of your product, of your company. Their CEO recently became Juan Otero, formerly of Booking, and Travala was acquired 50% by Binance. They also have an excel sheet where it is updated periodically, every month, with the booking number, and the number of their own AVA token that is being staked. They have a token and tiered system that rewards their users, as well as having various promotions and referral and affiliate systems. The striking thing about Travala is that for the most part, it offers better prices than those offered by Booking, and when there is some cheaper price offered on Booking, just contact them and they will adjust to the same price. It is almost always a win/win situation for the end-user to use this service.
Advantages of Travala
- Staking system that allows you to get an annual APY on their own token from 5 to 12%.
- Best price guaranteed
- Referral and affiliation system
- Ability to pay in cryptocurrencies
- Token with limited quantity and a deflationary system
Disadvantages of Travala
- Not yet competitive on low-cost flights
- UI that could be speeded up and made smoother, sometimes loading times are long and this discourages users
I can also avoid talking about Booking because it has almost a monopoly in the field of accommodation and has very few defects. I would choose Travala on Booking because, in addition to being convenient, it gives me the opportunity to spend cryptocurrencies.
In the next example let's go into the video field, and let's see how a Dapps behaves against the giant Youtube. Here, too, we will see, in the end, how it is more convenient to produce content on decentralized video platforms, which for now have low traffic and lower loading speed as the only flaw.
Odysee VS Youtube
We all know Youtube. We don't all know that you can make money with Youtube. The business of Youtube is based on advertising, if our videos contain advertisements and are watched, Youtube rewards us with about 40% of what they are paid, to which we will have to go to deduct the taxes. Furthermore, to start earning on Youtube you need certain requirements such as having a minimum of 1000 subscribers, and 4000 hours of video watched. On the other hand, Youtube is the # 1 video platform in the world optimized for connection on Smart TV, and with a lot of traffic, as well as an algorithm that rewards those who produce viral videos and is constant.
In decentralized platforms, we will not find such sophisticated algorithms and there will be so little traffic that we will almost be forced to produce content in English since it could be completely unknown locally. However, we will have the advantage of being able to start earning immediately and to be able to earn also based on how long we stay and watch videos on the platform. The other disadvantage is that they are slower in buffering and uploading videos and have fewer features, and are worse developed than Youtube.
Advantages of Odysee
- Possibility to earn by following and being followed on the platform
- Ability to earn by watching videos
- Possibility of earning with the appreciation of their token
Disadvantages of Odysee
- Little traffic
- Content almost exclusively in English
The advantages of Youtube are that there is practically the whole world and that if we can consistently create high-level content, we can have a large audience. The compound earning possibilities are currently infinitely greater on Youtube than on any other decentralized competitor.
I could have made other comparisons as well, like a traditional bank versus a Blockchain bank, or a blockchain video game versus a traditional video game. Or really many others. The fact is that the blockchain is exploding and every day the applications and companies on it or operating with it are committed to improving. Probably the Dapps mentioned in this article are not the best in their field or will be surpassed in the future, but they are certainly among the first to try to offer a decentralized solution.
For me, offering decentralized solutions for companies means cutting off a portion of their income or potential income and redistributing it to users, as well as offering a more reliable and secure network. But it's something they have to try to overthrow monopolies formed for years by Microsoft, Apple, Amazon, Google, Facebook, etc. It's something they have to do to try and get a slice of the market.
It is about offering sovereignty over assets, and it is about offering no censorship. But not at levels that you can post illegal things, but at levels that if you write or make a video with arguments contrary to the ideals of the platform on which you are posting it, you will not be censored. It is a revolution. And although we are only at the moment of construction, I believe it is inevitable. (In retrospective...)
The Dapps increase every day and improve more and more. If you have any dApps that you would like to have analyzed on your own please let me know in the comments.