One of the biggest use cases for blockchain technology as we use it currently are decentralized applications (dapps). The industry has put a lot of weight on dapps, and platforms supporting their development have exploded in popularity in recent years.
Some of the largest and most highly anticipated crypto projects supporting dapp development platforms include Ethereum (ETH), EOS (EOS), Tron (TRX), Cardano (ADA), Stellar (XLM), and Neo (NEO). These projects are among the most highly valued in the space, but who’s really using them?
Dapp Adoption is Slim to None
While cryptocurrencies supporting dapp development are highly valued, this may be an inflated look at the true value they provide, because actual dapp adoption is slim to none.
According to research by LongHash, a blockchain analysis and research firm, a mere 180 out of 1,812 Ethereum dapps have associated ERC20 transactions on any given day.
As seen in the image below, only 10% of Ethereum dapps were active on February 1, 2019.
Diving deeper into dapp usage on Ethereum, LongHash concluded that out of the 180 dapps being actively used, just 13% had more than 100,000 transactions in the past 24 hrs, while 19% had somewhere between 10,000 to 100,000 transactions.
To some, this is actually impressive, considering the current state of the market and early days of this technology. However, it is a far cry from the activity volume we see with centralized apps, leaving dapps with a very far way to go.
In addition to the findings presented above, a Canadian crypto researcher and industry commentator, Kevin Rooke, drove the lack of Ethereum dapp activity home.
Rooke took to Twitter where he displayed the sheer lack of dapp users and number of transactions.
There are now 1375 live ETH dApps.
86% of them had 0 users today.
93% of them had 0 tx volume today.
Across all platforms there are now 1828 live dApps.
77% of them had 0 users today.
85% of them had 0 tx volume today. pic.twitter.com/jUHZYuhPTz
— Kevin Rooke (@kerooke) February 10, 2019
Are Dapps Even Necessary?
The lack of dapp usage has begged the question from industry experts of whether dapps are truly necessary for many applications. One of expert asking this question is Saifedean Ammous, the world-renowned author of “The Bitcoin Standard.”
Ammous weighed in on the value of decentralized applications following Rooke’s tweet, saying that from what he could tell, centralizing most, if not all of Ethereum dapps would likely be a logical action.
Rooke agreed to an extent, but further stated:
I agree. Perhaps some gambling dApps will see traction though, much more difficult for gov’t to regulate/shut them down.
He then added the various advantages for gambling applications to be decentralized, stating:
[Decentralization] provides protection to the creator of the dapp, easy for gov’t to come after people running centralized gambling operations. Also, open-source code means gamblers can be certain of the odds they’re getting.
Despite Rooke’s points for decentralization, Ammous largely disagreed but thanked Rooke for the engagement.
Do you think decentralized applications are needed? Let us know in the comment section below.