Definition ∞ Directed Acyclic Graphs, or DAGs, are data structures where nodes represent transactions and edges indicate their chronological order, with no paths looping back on themselves. Unlike traditional blockchains, which form a single chain of blocks, DAGs allow for parallel processing of transactions. This architecture aims to offer higher scalability and faster transaction confirmation times. Transactions in a DAG typically confirm by verifying prior transactions, creating a web-like structure.
Context ∞ Directed Acyclic Graphs are a notable alternative to conventional blockchain structures, particularly discussed for their potential to address scalability limitations. The situation involves various projects researching and implementing DAGs to achieve higher transaction throughput and lower fees. A key debate concerns the security and decentralization properties of DAG-based systems compared to proof-of-work blockchains. Future developments focus on improving consensus mechanisms and practical applications for high-volume microtransactions.
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