Distributed ledger technology consists of more than just the Blockchain itself. One of the biggest contestants are Directed Acyclic Graphs often called “frenemies” of Blockchain technology, or even the blockchain killers. Projects like Hashgraph, RaiBlocks and Iota are already exploring their potential.
What are DAGs?
DAG is a web of nodes that confirms transactions. They have a specific structure based on topological ordering. The most significant feature of DAG nodes is that the nodes can be traversed in only one direction.
Similarly to blockchain ledger, the nodes confirm transactions. The difference is that there are no separate blocks created to bind them. Each new transaction is confirmed with at least two earlier ones.
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How are DAGs better than blockchain?
They solve some common blockchain issues:
- Directed Acyclic Graphs escape the bottleneck of blockchain platforms – the blocks itself. It can optimize the time of transaction and open ways to build faster and more scalable systems.
- Over time, blockchain ledgers grow, and consume more and more bandwidth and capacity. DAGs can reduce this problem.
- DAGs ensure better privacy.
- DAGs can reduce transaction fees to zero.
How are DAGs worse than blockchain?
At the moment, the graphs are not as safe as blockchain, allowing for a number of new attack vectors. Those issues can potentially be solved in the future, and DAGs can challenge the dominance of blockchain.
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