IOTA DAG – ‘Internet Of Things’ Direct Acyclic Graph For Payments?
The IOTA (abbreviation for Internet-of-things token) project has been of much intrigue to the crypto industry, because it makes use of a unique architectural framework that features a technology called ‘Tangle’. There is currently a lot of misinformation regarding this system, as some claim it is not a blockchain based service, while some say it is. However, the fact of the matter is, IOTA is based upon a something called the “Directed Acyclic Graph or DAG”.
What Is DAG?
People who are steeped in concepts of cryptography may be familiar with this term, but regular people like you and me will have no idea of what DAG (Direct Acyclic Graph) is. However, when looked at closely, we can find that there is actually not a lot of difference between the blockchain, and DAG. The core difference is that in the case of DAG, there are no ‘crypto miners’ who are used to “process, broadcast, and confirm transactions” that take place within the network.
While the reduction in the number of crypto miners may be considered to be good by some, it is still not clear as to whether DAG as a framework is better than the blockchain at this given moment. Since, DAG is trying to achieve the same result of decentralized currency as blockchain, it is still not conclusive as to which way is better.
How Is DAG Different?
Direct Acyclic Graph makes use of a mechanism that employs “transaction issuers and transaction validators”. This makes it quite different from the blockchain, which makes use of miners who act as both, the issuers and approvers. While some people may consider this to be an advantage, there may be certain downsides which we cannot foresee at the moment.
Some of the main benefits of getting rid of miners include:
- Crypto miners have often been found to come together and impede certain services when things do not go as per their liking.
- Mining fees can also impact certain services that rely on these small processing fees to make profits.
Although, IOTA claims that by implementing its DAG (Direct Acrylic Graph), it will be able to remove any “consensus-related vulnerabilities”. It should be kept in mind that if an issuer on DAG becomes the validator as well, there might be a paradox created that has yet to be addressed by company representatives. So we should wait and see how things pan out in the coming weeks.
What Advantages Is IOTA’s DAG Offering?
- Scalability: while it remains to be seen how this technology blossoms, it seems to tackle the problem of scalability quite efficiently.
- Fee Elimination: even though transaction fees on the blockchain are quite low compared to fiat exchanges, DAG aims to completely get rid of any monetary fees at all.
- Security: in order to ensure maximum transaction privacy and efficiency, all transfers processed within this network need for the “previous two transactions to have been approved.”
IOTA DAG Conclustion
All of the information we have just outlined may seem appealing, but it is still sensible to give things some time so that we can make a better assessment of this technology, and see whether it is going to be feasible in the future. A lot of the development will hinge on the fact, whether the community will be willing to spin up “additional full nodes”. Lastly, it should be noted that a month back, a simple spam attack conducted by various unidentified groups led to a blocking of all the public nodes on the network. Thus, while the future might be interesting for DAG, we should give it a bit of time.