Decentralizing Popular Dapps Isn't Just a Scaling Problem

It's no secret that building large-scale, fully decentralized applications is a challenge, but it turns out the hurdles have to do with more than just scaling.

Some of the most popular dapps that currently live on ethereum - which right now fall into two categories, games and exchanges - often retain centralized features, but the reasons have little to do with throughput and instead, revolve around user experience.

Otherwise, said James Duffy, a co-founder of Loom Network, which develops ethereum-based dapps including a Q&A site called DelegateCall, developers would only be able to deploy their dapp once and never be able to modify it.

While most of these dapp projects aim to decentralize further in the future, for now, they're happy to work slowly through that process so that users have the best experience and don't lose money.

"We're going to see actual, real, fun games that are normal games that people want to play, except that they're actually owning the in-game assets and they can do this on a fully decentralized platform."

Centralized exchanges have been cryptocurrencies' Achilles' heel since the early days of bitcoin - MtGox being the most famous example of what can go wrong when transparent, decentralized ledgers meet opaque, centralized intermediaries.

Examples on ethereum include Idex and ForkDelta, which according to DappRadar are the first- and second-most trafficked dapps over the past 24 hours.

The only problem is that both of these exchanges use centralized order books, as do most of their peers, according to Taariq Lewis, a veteran cryptocurrency developer who is building DEX technology - codenamed Lyra Protocols for now.

Adding to these technical difficulties, Lewis said, decentralized order books can be easy targets for Sybil attacks - whereby one user or group of users creates hundreds if not thousands of identities in an effort to spam the network with information.

Still, exchanges such as Idex and ForkDelta have said they plan to decentralize their order books when the technology enables them to.