Could DAGs Represent The Final Solution To Blockchain Scalability?

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November 8, 2018 by
Could DAGs Represent The Final Solution To Blockchain Scalability?

Scalability is one issue that most major cryptocurrencies, especially Bitcoin, face and has from time to time backpedalled the mainstream adoption of cryptocurrencies globally. Cryptocurrencies as we know them are built on blockchain technology.

Though Bitcoin is recognised as the first established cryptocurrency, it is not the first attempt at the development of digital cash. The major problem with the successors remained centralisation, especially since they were without the transparent, tamper-proof Blockchain.

However Blockchain technology has helped cross what seemed like an insurmountable problem at the time, although not without a price. It is safe to see Blockchain as a database that provides excellent protection against hacking and other forms of cyber attacks albeit relatively slow and quite expensive.

Being a write-once technology, Blockchain allows its users the advantage of transparent and immutable transactions mainly because transactions recorded on its blocks are unalterable. While you can store any format of data on its units, Blockchain is not well equipped to process large chunks of data in record time, hence providing the ever innovation-thirsty world with more limitations.

Quick to find ways to make up for the lag in transaction time in cryptocurrencies, developer(s) came up with another network that harnesses the power of the Directed Acyclic Graph (DAG) without breaking the Blockchain code of honour.

Seemingly a new technology, DAG is already making waves and with Ethereum’s decentralised platform already breaking grounds as Blockchain 2.0, the DAG might just be what the crypto world needs to make that mainstream cut.

The Directed Acyclic Graph (DAG)

Mining blocks on Blockchain requires high computational powers and high transaction fees as a result, this is one of the major limitations of Blockchain. With blockchain, each additional volume of transactions added to each block takes quite a significant amount of time making the network slow, thus, creating that scalability issue mentioned above.

The DAG network was however designed such that blocks are replaced by a tangle of nodes, hence, negating the need for mining. With the DAG, each transaction is two-layered (i.e. the transaction layer and the data layer). Transactions are verified by the node that comes before the target node and the node that comes after that same target node.

Being acyclic, the possibility of encountering a node for the second time while moving from one node to the other is highly impossible. The DAG gives its users the power to store and process data infinitely in record time without giving away transparency and decentralisation.

Could DAG be the Language of Crypto in the Future?

With the world in search of newer technologies with the power to move the supply chain management into the future, DAG might just be the solution the world needs. Several platforms like IOTA and Cybervein are already moving on with the network.

Cybervein, for instance, has incorporated the DAG network with the implementation of Hadhoop’s tool, MapReduce, into analysis and categorization of larger data to smaller parts. As such, handling datasets for giant supply chains like Alibaba is made easier.

On paper, employing the DAG network could just be what cryptocurrencies need but in reality, Blockchain, despite its limitations, is still gaining more attention from many startups and crypto companies.

However, with the scalability factor still to be taken into consideration, DAGs could just be the language cryptocurrencies would speak in the future.

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