Can you explain the concept of DAG in the context of digital currencies?

3 answers

• khris51Feb 16, 2025 · 5 months ago
  DAG, or Directed Acyclic Graph, is a data structure that is used as an alternative to traditional blockchain technology in some digital currencies. Unlike a linear blockchain, DAG allows for multiple transactions to be processed simultaneously, resulting in faster transaction speeds and increased scalability. DAG-based digital currencies, such as IOTA and Nano, utilize a network of interconnected transactions, where each new transaction confirms two previous transactions. This structure eliminates the need for miners and allows for feeless transactions. However, DAG-based digital currencies also face challenges such as security vulnerabilities and the need for a large number of transactions to achieve consensus.
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• Franck DouglasAug 24, 2020 · 5 years ago
  Sure! DAG stands for Directed Acyclic Graph, and it's a different approach to building a decentralized ledger compared to traditional blockchain technology. In a DAG-based digital currency, transactions are not organized in blocks like in a blockchain, but rather form a graph structure. This allows for faster transaction processing and higher scalability, as multiple transactions can be confirmed simultaneously. DAG-based digital currencies also have the advantage of lower transaction fees and energy consumption compared to traditional blockchains. However, it's important to note that DAG-based digital currencies are still relatively new and may have their own unique challenges and limitations.
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• Gabriel TignorJun 13, 2025 · a month ago
  BYDFi, a leading digital currency exchange, explains that DAG, or Directed Acyclic Graph, is a data structure used in some digital currencies to achieve faster transaction speeds and increased scalability. Unlike traditional blockchain technology, which relies on blocks and miners, DAG-based digital currencies use a network of interconnected transactions. Each new transaction confirms two previous transactions, creating a web-like structure. This allows for parallel processing of transactions, resulting in faster confirmation times and lower fees. DAG-based digital currencies have gained attention for their potential to address the scalability issues faced by traditional blockchains. However, it's important to consider the security implications and potential trade-offs associated with this alternative approach.
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