While blockchain technology is the core focus for the vast majority of both retailers and companies, there is a competing technology on the rise that is touted by some as the blockchain killer: the Directed Acyclic Graph (DAG) structure.
DAG-based projects maintain the industry’s core concepts of decentralization and tokenization — but with a strong technological upgrade.
In this article, we take a deeper look at DAG structures, explore whether DAG-based networks really are a potential blockchain killer and what projects are using the technology for their decentralized projects.
Because of the DAG structure, block times aren’t required. This means that transactions can occur near-instantaneous. Moreover, the problem that blockchains face when two miners find a block at exactly the same time and multiple chains exist until consensus is reached on which blockchain to use and which to abandon, is not present in a DAG structure.
Due to this, DAG-based decentralized networks have a far larger scalability potential than blockchains do, which is important given the current scalability limitations of most large blockchain networks.
Moreover, they are far more energy-efficient than, for example, Bitcoin’s Proof of Work whilst maintaining fully decentralized and thus maintaining the high levels of security enabled by decentralization. There is also no possibility for a 51% attack.