How does a directed acyclic graph (DAG) consensus algorithm work in cryptocurrency networks?

5 answers

• Parth SonejiApr 02, 2025 · a year ago
  A directed acyclic graph (DAG) consensus algorithm, such as the one used in cryptocurrencies like IOTA and Nano, works by allowing multiple transactions to be confirmed simultaneously, rather than in sequential blocks like in a traditional blockchain. Each transaction is linked to two previous transactions, creating a network of transactions. This structure eliminates the need for miners and allows for faster transaction confirmation times. However, DAG algorithms can be more vulnerable to certain types of attacks, such as double-spending attacks, and may require more computational resources to maintain the network.
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• Lakamy THIAMFeb 26, 2026 · 2 days ago
  So, here's the deal with DAG consensus algorithms in cryptocurrency networks. Instead of relying on a linear chain of blocks like in Bitcoin, DAG algorithms use a web-like structure to confirm transactions. This means that transactions can be confirmed in parallel, leading to faster transaction speeds. However, this also means that the security of the network can be compromised if a majority of nodes are malicious. It's a trade-off between speed and security.
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• SAFWAT BARI RAKTIMNov 01, 2024 · a year ago
  In the world of cryptocurrencies, DAG consensus algorithms have gained popularity due to their ability to scale and process transactions quickly. Take IOTA, for example. It uses a DAG called the Tangle, which allows for high transaction throughput and low fees. Unlike traditional blockchains, where miners compete to add blocks, IOTA's DAG allows for parallel processing of transactions, resulting in faster confirmation times. However, it's worth noting that DAG algorithms are still relatively new and may face challenges in terms of security and decentralization.
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• MarcusVCFNov 24, 2024 · a year ago
  BYDFi, a leading cryptocurrency exchange, acknowledges the potential of DAG consensus algorithms in improving transaction speeds and scalability. With DAG algorithms, transactions can be confirmed in parallel, leading to faster and more efficient processing. However, it's important to consider the trade-offs. DAG algorithms may require more computational resources and can be vulnerable to certain types of attacks. Nonetheless, the development and adoption of DAG consensus algorithms in cryptocurrency networks show promise for the future of decentralized finance.
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• ilksenJun 29, 2020 · 6 years ago
  DAG consensus algorithms, like the one used in cryptocurrencies such as IOTA and Nano, offer a unique approach to achieving consensus in cryptocurrency networks. Instead of relying on a linear blockchain, DAG algorithms create a web-like structure where each transaction is linked to multiple previous transactions. This allows for parallel confirmation of transactions, resulting in faster transaction speeds. However, DAG algorithms also come with their own set of challenges. They can be more vulnerable to certain types of attacks, such as the infamous double-spending attack. Additionally, maintaining the integrity of the DAG network may require more computational resources compared to traditional blockchain networks.
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