Directed Acyclic Graph

Directed Acyclic Graph (DAG) is a data structure characterized by nodes connected through directed edges without any cyclic paths. In blockchain technology, DAG has gained attention as an alternative to traditional blockchain structures, offering higher transaction throughput and better scalability.

The origin of Directed Acyclic Graph can be traced back to computer science and mathematics, where it was initially used for solving task scheduling and data processing problems. In the blockchain domain, DAG applications emerged around 2015, with IOTA being one of the earliest cryptocurrency projects to adopt this structure, followed by Byteball (now renamed Obyte), Nano, and others. Unlike the linear structure of traditional blockchains, DAG allows multiple transactions to be validated and confirmed in parallel, thereby overcoming some inherent limitations of blockchain.

In a Directed Acyclic Graph, each new transaction must validate at least two previous transactions to be accepted by the network, forming a web-like structure rather than a chain. DAG's working mechanism abandons the concept of blocks found in traditional blockchains, with transactions directly referencing and confirming each other. When a transaction is directly or indirectly referenced by more other transactions, its confirmation level in the network increases. This mechanism eliminates the need for miners to package blocks, theoretically enabling zero transaction fees and near-instantaneous confirmation speeds.

Despite DAG technology's excellent performance in terms of scalability, it faces a series of challenges and risks. First is the security issue, especially in situations with low network participation, where DAG structures may be more vulnerable to 51% attacks. Second, due to its complexity, developer and user acceptance remains limited, and related tools and ecosystems are not yet mature. Additionally, in terms of decentralization, some DAG implementations have introduced centralized elements such as coordinators to ensure security, which conflicts with the decentralization philosophy of blockchain technology. Finally, regulatory attitudes toward such innovative technologies remain unclear, potentially affecting their widespread application.

Directed Acyclic Graph represents an important direction in the development of blockchain technology, solving throughput and scalability issues faced by traditional blockchains through innovative data structures. As the technology continues to mature and application scenarios expand, DAG could play an important role in specific domains such as IoT payments and microtransactions. However, whether it can completely replace traditional blockchains depends on the co-evolution of multiple factors including security, decentralization, and ecosystem development.