The blockchain technology is the solution to some of the major problems in the world right now. Bitcoin was the first ever to make use of the blockchain technology. As amusing as it seemed, the shortcomings of the technology soon surfaced. The main problem caused by the blockchain technology was its inability to scale efficiently. Numerous attempts towards solving the scaling problem proved to be ineffective. Thus, it laid down seeds for a new technology called Directed Acyclic Graph(DAG). There are several projects in the market that are currently leveraging on this technology. In this article, we will look at five such “blockless” blockchain projects that based upon the DAG technology.
IOTA can be seen as the Pioneer of the blockless blockchain. IOTA was introduced to the world in 2016 when blockchain had taken over the whole cryptocurrency market. With other cryptocurrencies based upon blockchain at that time, it is very impractical to make any microtransactions. You would have to pay more in the form of fee, in order to get your transaction verified. This stopped cryptocurrency from going mainstream. This is where IOTA comes in very handy. IOTA offers 0 transaction fee.
At its core, IOTA uses its network called the Tangle network. In this network, a transaction is verified when the person who made the transaction verifies the previous and the next transaction. This means that the person who uses the network is the one verifying the transaction. As the number of users grow, IOTA offers close to instant transactions.
- The IOTA network offers instant and zero fee transaction. Thus, facilitating mass adoption by supporting micro-payments.
- This is going to be very beneficial in the IOT field where large amount microtransactions occur simultaneously. Thus, it provides a connecting network for the entire IoT framework.
- Unlike traditional blockchain, IOTA is highly scalable.
Just like IOTA, Nano also works on the DAG . However, the way the transactions take place is entirely different. Nano uses a new technology called block-lattice. This enables Nano to leverage on the DAG but still work like traditional blockchain. In Nano, the nodes represent individual wallets. These nodes are called individual chains. Only the owner of a wallet can make changes to the individual chains. This means that each wallet can be updated asynchronously.
In this network, in order to complete a single transaction, both sender, as well as the receiver, must perform a transaction. The sender signs the funds and sends them, and the receiver signs the received funds in order to mark the transaction as complete. This means that the transaction speed is exceptionally high for nano.
- Very high transaction speed
- Zero transaction fees.
Another cryptocurrency that is using the DAG technology over the blockchain is Byteball. Unlike free transactions on the IOTA chain, transactions are not free on the Byteball chain. In order to keep everything in check, Byteball uses a validator system to avoid double spends. The validator is called a witness who is usually the person with the most influence on the network. Unlike IOTA, which does not support private transaction as of today, Byteball supports fully private and untraceable transactions.
- Private transactions using DAG are now possible with the Byteball network.
- The 51% attack which is possible in IOTA is completely eradicated in the Byteball chain.
- Supports extremely fast verification speeds of just 30 seconds
A newer coin that has arrived on to the scene is the Travelflex coin. It uses an algorithm based on the DAG technology to solve the scalability issue in the crypto world. This coin focuses on making the platform truly decentralized. This is achieved by making the whole system ASIC resistant. Thus, this stops a single person from controlling the entire network. This project aims at revolutionizing the travel industry and thereby, takes the decentralized technology a bit closer to mass adoption. Since it uses DAG technology, there is little scaling issue either.
In Travelflex, the customer pays to get the merchant for the product or service that he needs. This is going to be held in the Travelflex escrow account. When the merchant sends his service or product to the customer and the customer accepts the service he just received, the funds are then transferred from the escrow account to the merchant.
- Travelflex is planning to launch their own credit card. This means that using Travelflex coins for day to day payments in the future will be a more simple and easy process, thus facilitating mass adoption.
- The platform will also support NFC to allow users to transfer coins amongst themselves.
5 IoT Chain
This project was developed to support communication and settlement between the various IoT sensors. In the current world, the data from the IoT sensors are stored on third-party servers. The data thus gets leaked very often. In order to avoid this, IoT chain was developed. IoT chain combines both blockchain technology and DAG to achieve its goals. By combining the two technologies, the transactions on the network are not only cheap but also extremely fast which is highly essential in the field of IoT.
- Since the project uses both the blockchain as well as the DAG technologies, the transactions can be made either private or public.
- The whole IoT space will be very secure with the implementation of both DAG and blockchain technology
- Fast and cheap transactions
The DAG network is truly a remarkable technology with the potential to replace the blockchain technology. However, it too comes with certain flaws.
- The technology is still in its infancy and hence cannot be tested to its limits.
- An attack is still very possible on the network especially with such less number of users.
With that being said, the potential of the "blockless" blockchain is immense. With all the features of the blockchain and with better scalability, this technology can replace the way we conduct our current transactions. It could prove to be very useful, especially in the field of IoT. It definitely offers a solution to the scalability issue of the current blockchain and thus, helps create a better, decentralized world for everyone.