Blockchain’s New Competitor Aims to Lead the New Era of FinTech Evolution

Dec 18, 2017 at 11:20 // News
Guest Author

Blockchain is a game-changing technology that aims to disrupt markets worldwide, however, Blockchain tech isn’t the only technology with groundbreaking potential in the field. DAG (directed acyclic graph) is one of the main competitors to Blockchain technology. Unlike Blockchain, DAG is a new technology without blocks, miners and expenses on mining itself.

New technology with huge potential

While Blockchain is a distributed database that has records about all transactions made, and all written in blocks, DAG uses another system to ensure similar features. In DAG, every new transaction verifies one or more previous transactions, resulting in a structure that is a finite directed graph with no directed cycles.

In some points, DAG is a technology of smart contracts, similar to Ethereum. Diversification by means of projects that are based on DAG is interesting. Low price on exchanges, in the case of Byteball the distribution is an airdrop. To be there among the first who know about this option could be interesting.

Adopting DAG tech

As DAG technology is used to verify transactions, it can be used to create new cryptocurrencies. However, while thousands of new projects worldwide have a fever to adopt Blockchain technology, sometimes just to make their project sound better, there are still only a few projects which are based on DAG.

The first known concept of DAG-based cryptocurrency was developed by Sergio Demian Lerner. He offered a concept of Dagcoin, a cryptocurrency where each transaction carries a proof-or-work and references one or more previous transactions. However, this token was never finished.

Today, other projects, like IOTA, and Byteball, aim to bring DAG-based cryptocurrencies to the community.

DAG is still an underground technology with a huge potential to solve many problems that blockchain technology has to date. There are no miners who could manipulate with hash power, increasing fees and make hard forks anytime they want. Thus, there are no costs for mining, the technology itself is less attractive for attacks and it has a concept of finality to transactions. Moreover, unlike Blockchain-based transactions, that are extremely slow, DAG allows making hundreds of thousands of transactions per second. 

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