Scaling a blockchain has proved to be a daunting, complicated task. Bitcoin, a trailblazer for all digital currencies, has been a stagnant, low-throughput network for years for this very reason.
Currently, there are many initiatives circling around the crypto space that are aimed to enhance Bitcoin’s (and other platform’s) TPS. Some experts motion to have the block size increased, others want the processing time on the network to be reduced. There’s a great deal of debate as to which variable should be changed and, given how resentful the Bitcoin community is to any modifications, there’s no telling when the issue will be tackled.
Some projects, however, offer a more radical approach to remedy blockchain’s problems: they’ve built completely new networks which do not use the blockchain data structure at all. The likes of IOTA and Byteball, which have already made waves in the crypto space, are set to redefine how cryptocurrencies are hosted. Instead of blockchain, they’re seeking to implement something called Directed Acyclic Graph (DAG).
Today, we’ll provide a brief overview of what is DAG, how the directed acyclic graphs work and describe, in detail, what IOTA and Byteball are trying to achieve by using it.
What is a Directed Acyclic Graph?
As far as data structures go, Blockchains can be thought of as simple linked lists. Each entry on Bitcoin or Ethereum (or other networks) is put on top of the previous one to which it holds a reference. That’s how we get a linear sequence of digital events that we call a chain.
Blockchains allow one to track down any record stored in a ledger’s history, but their sequential structure is also what hinders significantly their transaction throughput; the flat list nature of blockchains is the biggest bottleneck for their ability to scale.
Well, a DAG operates differently. This data structure resembles a flow chart where all points are headed in one direction. You can compare a Directed Acyclic Graph (DAG) to a file directory structure where folders have subfolders that branch into other subfolders and so on; they are tree-like.
The word acyclic just means that no node in the graph can reference back to itself; it can’t be its own mother node.
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