Even though we still have a long way to go until we reach mass adoption of blockchain and cryptocurrencies, there is an interest from nearly all industries in the promising new technology.
Blockchain technology is the focus of the companies that are following the stream of innovation, but there is a competing technology that could bring something even better — the Directed Acyclic Graph (DAG).
DAG-based projects follow the industry’s concepts of decentralization and tokenization with one main difference — technology.
In this article, we will explore the DAG structures, learn whether DAG-based networks are potentially better than blockchain and how can the technology be used.
Simply put, blockchain technology is a data structuring method.
The same applies to Directed Acyclic Graphs. But before comparing the two technologies, we need to understand the logic behind DAGs.
The Directed Acyclic Graph is a data structure in computer science. A graph in this context represents a network of interconnected nodes. The information passes through DAG acyclically, as said in the name. This means that a transaction in a DAG-based system doesn’t go through the graph in cycles. Instead, when the information is transmitted from a node, there is no way this information will return to the sender without passing through other nodes that have already received the information earlier. Similar to the blockchain, it is impossible to start at one point and traverse the entire network.
The flow of information has a direction — like a one-way street for information. Blockchain, again, similarly, uses the same logic. There is no way to return to the node without passing through other nodes first. Each block refers to the previous one, creating a direction in the blockchain.
The core difference between the two technologies is that DAG allows multiple chains of blocks to exist, while blockchain supports only one main chain. This is possible with DAG since the nodes can operate in parallel, as long as the flow of information remains directed.
Another big thing brought by the DAG structure is that block timestamps are no longer required, allowing transactions to occur almost instantaneously. Also, the mining problems such as the one where two miners find a block at exactly the same time and create multiple chains, needing a consensus to be reached on which blockchain to use and which to abandon do not exist with DAG protocols.
DAG networks offer a far better scalability potential than the blockchains do, which is a critical step on the road to mass adoption. It is far more energy-efficient than Proof of Work used in Bitcoin and similar cryptocurrencies, while still providing full decentralization and high levels of security. Plus, 51% attacks cannot happen in DAG networks.
Considering all the promising features of the DAG structure, it is clear that we’ll see more of this technology coming to life in the future. Quras is one of the projects that aims to implement DAG protocol in Q4 2019 and always follow the best possible technology in the market.