We'll start with a simplified explanation of the concept of DAG, or "Directed Acyclic Graph", comparing it to a treasure hunt, to make it easier to understand this essential data structure in the world of cryptocurrencies.
Immediately afterwards, for those wishing to delve deeper into the subject, we will present a more technical and detailed description of what a Directed Acyclic Graph is.
Imagine that a DAG is like a treasure hunt in a park. Each stage of the game represents a point that we call a "node" in computer language, and each clue for getting from one stage to the next is a path, which we call an "edge". In this treasure hunt, you follow the clues only in a predefined direction, which reflects the direction of the edges, and it is impossible to go round in circles to get back to the starting point, which is what being "acyclic" means.
In the world of crypto-currencies, instead of grouping all transactions, such as buying or selling digital currency, into blocks as is the case with traditional blockchains, a DAG places each transaction individually as a point in the game. When someone wants to carry out a new transaction, they have to select and indicate a few previous transactions that they consider valid and trustworthy, a bit like choosing a reliable path on the basis of clues that have already been verified. By doing this, it not only validates its own transaction but also helps to confirm the reliability of the transactions it has chosen, like a participant saying "I trust this route because I've seen it used by others before me".
DAGs are particularly efficient because they process several transactions simultaneously, a bit like being able to send letters to several friends at the same time without waiting for the postman to pick them up one by one. This method also reduces costs because there is no need for a person, or a crypto-currency 'miner', to confirm each transaction. This efficiency makes it ideal for handling many small payments quickly, such as paying for every minute of use of a bike share.
However, despite these advantages, DAGs are not without their flaws. The process of deciding which previous transactions to use to validate new ones can be complex and prone to manipulation. As with any new technology, DAGs have yet to demonstrate their ability to withstand various forms of computer attack.
In summary, DAGs work a bit like a sophisticated game of chase where each participant helps pave the way for the next, making the game faster and cheaper to play. However, it is crucial to ensure that the rules of the game are robust and fair for all participants.
Directed Acyclic Graphs (DAGs) are an alternative to traditional blockchains in the cryptocurrency ecosystem. To understand DAGs, it's essential to grasp a few key concepts and compare them to traditional blockchains.
A DAG is a type of graphical data structure made up of nodes (or vertices) and edges (or links). In a DAG :
This data structure makes it possible to represent relationships that have a clear, non-repeating order, which is crucial for applications such as project planning, process optimisation and, of course, some cryptocurrency technologies.
In cryptos, DAGs do not structure transactions into blocks linked by chains as is the case with traditional blockchains. Instead, each individual transaction forms a node in the DAG and must reference one or more previous transactions. Here's how it works:
Directed Acyclic Graphs (DAGs) stand out as an innovative alternative to traditional blockchains. Without the need to mine blocks, DAGs allow transactions to be processed directly and in parallel, which significantly improves their speed and scalability. This is crucial for applications that require instant confirmation, such as real-time payments.
By eliminating miners and using less energy-intensive consensus methods, DAGs also reduce the costs associated with transactions. This economic efficiency makes DAGs particularly suitable for micropayments and applications in the Internet of Things (IoT), where small amounts are exchanged frequently.
Unlike blockchains, which are based on chains of blocks linked in sequential order, DAGs use a structure where each transaction is directly linked to several others, facilitating faster, simultaneous processing.
This approach not only revolutionises the speed at which transactions can be executed, but also significantly reduces the associated costs. In a world where speed and efficiency are paramount, DAGs offer near-instant confirmation of transactions, which is a major advantage for everything from micropayments to the Internet of Things (IoT). The latter, requiring a multitude of small transactions, particularly benefit from this technology, where paying a few cents for a piece of data transmitted by a sensor becomes viable.
DAGs improve the scalability of cryptocurrency networks. Where blockchains struggle with bottlenecks at times of high congestion, DAGs process transactions in parallel, effectively eliminating delays and allowing many more transactions to take place simultaneously without sacrificing security or reliability.
Security, a major concern for all distributed ledger technologies, is also enhanced in DAGs. Each new transaction reinforces the verification of the previous ones, creating a network that becomes more and more robust the more it is used. This means that the more active the network, the more secure it is, a particularly attractive feature in an environment where security cannot be taken lightly.
However, it is important to note that ATMs are not without their challenges. The issue of selecting transactions for approval and resistance to certain types of attack are problems that still require robust solutions. Despite these challenges, the advantages of DAGs, particularly for applications requiring high processing capacity and low latency, are undeniable.
The answer depends on the specific application and performance requirements.
DAGs stand out for their significantly greater scalability, attributable to their ability to process several transactions in parallel. This makes them ideal for applications requiring a high volume of transactions processed quickly, a significant advantage for sectors such as micropayments or the Internet of Things (IoT). However, this same structural flexibility poses challenges in terms of security. DAGs require a different approach to transaction validation, which is not yet as proven as the consensus mechanism used in blockchains, where each block must be unanimously validated before being added to the chain.
As for robustness and adoption, blockchains enjoy a mature infrastructure and established trust among a wide audience, having supported billions of dollars in transactions and having been tested in a variety of crisis scenarios. DAGs, on the other hand, are still relatively new to the scene and have yet to prove their reliability and security on a comparable scale.
Several cryptocurrency projects are using Directed Acyclic Graphs (DAG) technology for a variety of benefits, including improved scalability and transaction speed. Here are some of the most notable projects:
A DAG is a flexible and efficient structure that lends itself to particularly beneficial uses in the cryptocurrency space, where factors such as speed, scalability and cost are crucial. Its ability to enhance payment systems and other blockchain-based applications could increase as its benefits and potential are increasingly recognised and exploited.
While blockchains remain dominant in terms of security and adoption, DAGs bring significant improvements in terms of performance and the ability to handle large volumes of transactions quickly. They promise to be increasingly integrated into systems that require such speed and volume. Their role in the global technology ecosystem is therefore set to grow as their adoption expands and they are adjusted to meet new challenges.
Although DAGs represent an intriguing alternative to blockchains, with advantages in terms of speed and processing capacity, they also pose challenges, particularly in terms of security and adoption. So the choice between using a blockchain and a DAG will depend on the specific needs of each project or application.
