Overview
A directed acyclic graph (DAG) is a data structure where blocks reference multiple predecessors, allowing parallel processing. Some blockchains use DAGs to improve throughput. Unlike a linear chain, a DAG can include multiple branches that reference each other.
How It Works
In a DAG-based ledger, new blocks reference several previous blocks instead of one, enabling concurrent validation. This can increase transaction throughput and reduce confirmation times. Consensus rules determine which blocks are accepted and how conflicts are resolved.
Why It Matters
DAGs are an alternative scaling approach to linear blockchains, used by projects like IOTA and some Layer 1s. They trade some simplicity for parallelism. Their security and consistency models are an active area of research.
Related Concepts
DAGs relate to Blockchain structure and Consensus. They are an alternative to linear chains and Rollup architectures.