The blockchain has revolutionized the world forever. The rise of Bitcoin saw the blockchain come into the light, gaining worldwide attention. People welcomed its decentralized design and immutability over the prevalent centralized architectures.
However, times changed. The blockchain quickly fell prey to low transaction speeds and scalability issues. Now DAG is all set to revolutionize the blockchain itself if experts are to be believed.
DAG: the Directed Acyclic Graph is a powerful construct in computer science that offers a viable alternative to the blockchain technologies. Thanks to its numerous advantages over the blockchain, DAG is now the key to the power of many cryptocurrencies and technologies worldwide.
What really is DAG?
DAG, as the name suggests, is a directed graph that has no cycles to connect with the other edges. What this means is that it isn’t possible to complete a cycle around the whole graph starting at an edge.
Since the graph is directed, its edges only go one route. The DAG employs sorting in a certain order. DAG-based technologies aim to limit the graph width, increasing the length over the width so that the number of nodes across the width with the same parent transaction could be limited. Such algorithms help avoid problems with picking old transactions in the chain as the parent transactions.
DAG in the Cryptocurrency Space
DAG is already making its mark in the cryptocurrency world with popular coins such as IOTA and ByteBall inculcating DAG in their architecture.
IOTA guarantees zero-transaction fees and has bright implications for IoT (Internet of Things). The technology is based on “The Tangle”, which builds upon DAG and enables micro-payments to be made with a relative ease and at much higher speeds.
ByteBall too facilitates smart payments in addition to a host of other useful features powered by the underlying DAG technology.
DAG vs. Blockchain
DAG emerges as a powerful competitor to the blockchain. The blockchain has been widely adopted owing to its immutability and transparency but a fundamental problem is that of the large transaction times as is clearly evident in the case of Bitcoin.
DAG tackles the problems inherent in the blockchain by doing away with the blocks themselves. Transactions are here linked with each other, with one transaction paving the way to the confirmation of the other, the process continuing in the chain.
Another major problem with the blockchain is the requirement of miners to confirm transactions, which adds to the transaction delays. DAG eliminates miners altogether, dramatically reducing transaction times.
Decentralization in the Real Sense
With the Proof of Work mechanism, the blockchain can quickly get centralized the day an entity owns a majority of the network, defeating the very purpose of it being decentralized in the first place. However, with DAG, no PoW is needed, maintaining decentralization in the network in the real sense by spreading out transactions.
DAG enables micro-payments possible with a high efficiency without users having to incur exorbitant transaction fees like with Bitcoin and Ethereum. Transactions are processed at a near-instant speed since no miners are involved on DAG networks.
Theoretically, thousands of transactions are possible per second, which makes the network throughput and performance virtually unparalleled. This makes for a highly scalable network that takes precedence over the existing blockchain technology.
The Era of Simplicity
When compared to Ethereum, DAG might not appear as robust at first, however, it does offer smart contract functionality in a much more simple and readable form.
DAG simplifies smart contracts so they could be easily understood by the users themselves in contrast to the complex codes of the Ethereum ecosystem where users have no choice but to rely on programmers.
Will DAG be the blockchain alternative? It’s too early to speculate but DAG does hold promising opportunities as a much more technologically sophisticated platform that proposes solutions to many problems plaguing the blockchain ecosystem.
We are living in a rapidly-evolving landscape where users will increasingly migrate to advanced platforms in a bid to achieving faster and simpler transaction mechanisms in the cryptocurrency sphere. Continuous growth with narrow technology windows that keep building on a well-established foundation to tackle new barriers as they arise might just be the answer. DAG, then, might be the worthy successor to the blockchain.