DAG as an active blockchain competitor19 Aug 2022
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Usually, our blog uncovers most of the projects we’ve successfully done. The latest articles were dedicated to crowdsale development, arbitrage bots, crypto index funds, etc. However, some articles are dedicated to the technologies existing in the blockchain space. In this article, we’d like to tell you about something fundamental — Directed Acyclic Graph (DAG). Let’s see what it is and how advanced projects use it.
Directed Acyclic Graph is a data modeling tool that became another approach to creating distributed ledger systems. It can be called a “blockchain competitor” because implementing it means building a network different from Bitcoin, Ethereum, and many others.
How it looks and works
Roughly, while blockchain is a row of blocks assembled in a chain, DAG can be depicted as a graph with vertices connected via edges. Each block in a chain contains information about the conducted transactions, so the whole system is always limited in the amounts of data being put in a block at the same time. DAG assumes confirming older transactions by the newer ones, thus, they occur sequentially like in blockchain, but the branches of these transactions are not connected. That allows it to conduct many more transactions on the network simultaneously. What’s more, nodes are responsible for submitting transactions: they do Proof-of-Work tasks.
The term “acyclic” means that the edges don't come back to the previous vertices, and that’s what guarantees the legitimacy of transactions left in the history of the graph.
What are the benefits?
It’s pretty clear from the description of the system that DAG’s throughput capacity and scalability are higher than blockchain’s. It means that the network can both take more transactions at the same time and do it faster than the blockchain. Another noticeable feature here is that the operation of such systems does not require creating blocks, therefore, mining is not needed too. DAG-based networks not only can be operated with less computing hardware but can also be gas-free and more eco-friendly.
What’s built on DAG
The biggest networks that take DAG as a basis for their structure are Fantom and Avalanche. Both of them have unique mixes of the embedded solutions where DAG plays an important role. Fantom and Avalanche are one of the youngest and most innovative market players, so many users turn to them to get a better experience compared to Bitcoin and Ethereum. The dApp developers do the same thing because this power and potential can improve their products too. For example, Curve and Aave are built on Fantom and are used by thousands.
Why should you pay attention to it?
People love to simplify. The more convenient the platform is, the more popular it gets. The newest technologies try hard to compete: get safer, faster, and just better day to day. All of these factors predict where all the users, money, and opportunities will accumulate, and you should not miss the spot.
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