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Directed Acyclic Graph (DAG)

Directed Acyclic Graph (DAG)

Last Updated: January 23, 2026

Directed Acyclic Graph (DAG) is a data structure used in cryptocurrencies to record transactions without blockchain constraints.

Directed Acyclic Graph (DAG) is a data structure where each transaction points in a single direction, forming a graph with no cycles. Unlike traditional blockchains, DAG does not require linear chains of blocks. This allows for more scalable and efficient transaction processing, as multiple transactions can occur simultaneously. In a DAG, each transaction verifies one or more previous transactions, increasing the speed of consensus. It's particularly useful for IoT and microtransactions due to its lightweight nature. DAG structures are utilized by projects like IOTA and Nano to enhance scalability and transaction speed.