DAG Technology

Definition ∞ DAG Technology, referring to Directed Acyclic Graph technology, represents a data structure where transactions are recorded as nodes in a graph, with each new transaction confirming one or more previous transactions. Unlike linear blockchains, DAGs do not organize data into blocks, aiming for greater transaction throughput and reduced fees. This structure permits parallel processing of transactions.
Context ∞ DAG technology frequently appears in crypto news as an alternative distributed ledger solution to traditional blockchains, particularly for applications requiring high transaction volumes like IoT or micro-payments. Projects utilizing DAGs often highlight their potential for superior scalability and near-instant confirmations. Debates continue regarding their decentralization characteristics and security properties compared to established blockchain models.