## Beyond Blockchain: Understanding DAG Technology and Why Projects Like IOTA Are Building on It

When you hear "cryptocurrency architecture," most people think blockchain. But there's another model gaining traction that challenges everything we know about how transactions should be processed: the Directed Acyclic Graph, or DAG.

**What Makes a DAG Different**

A Directed Acyclic Graph fundamentally rewires how transactions connect. Instead of bundling transactions into blocks that form a linear chain—the traditional blockchain approach—a DAG lets each transaction link directly to previous ones, creating a web-like network rather than a single thread. Think of it as the difference between a highway (blockchain) and a mesh of interconnected roads (DAG). No blocks, no miners needed to validate. Just transactions referencing transactions in a directional, non-circular flow.

**Why Speed and Fees Matter Here**

This is where DAG gets interesting. Because transactions process in parallel across the network rather than sequentially in blocks, the throughput potential skyrockets. As more transactions flood the network, a DAG doesn't slow down—it actually handles the load more efficiently. Traditional blockchains hit bottlenecks during congestion; DAG networks scale with activity.

The fee structure changes too. Without miners or validators extracting fees for their services, DAG-based systems can dramatically reduce transaction costs—or eliminate them entirely. For scenarios like microtransactions or everyday payments, this matters.

**Projects Leading the Way**

Cryptocurrencies like IOTA and Nano have already committed to DAG architecture. IOTA targets Internet of Things (IoT) machine-to-machine transactions where fees would be prohibitive on traditional blockchains. Nano positions itself as digital cash for everyday use. Both leverage DAG's speed and cost efficiency to solve real problems that blockchain struggles with.

**The Tradeoff: Security and Decentralization**

DAG isn't a perfect solution. Its security model diverges significantly from blockchain consensus mechanisms, making it more complex to defend against certain attack vectors. Maintaining decentralization while ensuring network security requires different approaches than what's proven in traditional blockchain systems. It's not harder, just different—and still evolving.

The bottom line: DAG represents an alternative evolutionary path for cryptocurrency architecture. It's not replacing blockchain everywhere, but in specific use cases where speed, scalability, and low fees are non-negotiable, DAG-based networks offer a compelling design that's already proving itself in the field.