Are Chains Built on DAG Faster than Normal Ones? Comparing Blockchain Infrastructures

New distributed ledger technologies (DLTs) like Directed Acyclic Graph (DAG) are emerging as powerful alternatives to traditional blockchains. While both technologies serve the same purpose, storing decentralized data securely, the way they operate differs significantly. 

Are chains built on DAG faster than normal blockchains? This article explores both blockchain and DAG infrastructures in detail to help you understand their fundamental differences, advantages, and use cases.

Distributed Ledger Technologies Introduction

Distributed Ledger Technology (DLT) refers to a decentralized database that is shared across multiple nodes in a network. Every transaction is recorded and synchronized across all nodes, removing the need for a central authority. 

This ensures transparency, security, and decentralization. While blockchain is the most widely known type of DLT, other models like DAG are gaining attention for their scalability and efficiency, especially in high-volume environments like IoT and real-time data applications.

Read also: What is a Metagraph? Understanding DAG Token's Infrastructure

How Blockchain Works

Blockchain operates as a linear, chronological chain of blocks, with each block containing a batch of verified transactions. These transactions are validated using consensus mechanisms such as Proof of Work (PoW) or Proof of Stake (PoS). 

Once verified, the new block is added to the chain, creating a transparent and tamper-resistant record.

Popular blockchain applications include cryptocurrencies (e.g., Bitcoin, Ethereum), smart contracts, decentralized finance (DeFi), and digital identity systems. 

However, traditional blockchains face challenges such as high transaction fees, slower speeds, and limited scalability—especially when network demand spikes.

How DAG Works

A Directed Acyclic Graph (DAG) is a different kind of DLT where transactions are structured as nodes in a graph rather than in blocks. Each transaction confirms one or more previous transactions, forming a web-like structure. 

Unlike blockchains, DAGs don’t require miners or validators to form blocks. Instead, the network relies on the transactions themselves to validate one another.

This results in faster processing times, lower energy consumption, and minimal or no transaction fees. DAG’s architecture allows multiple transactions to be processed simultaneously, making it more scalable and efficient in high-traffic environments.

Read also: What Makes the DAG Architecture Better than Regular Chains?

DAG vs Blockchain: Comparative Analysis

1. Decentralization

Blockchain is generally more decentralized than DAG. Public blockchains like Ethereum have thousands of nodes securing the network, while many DAG-based systems rely on smaller, more centralized councils (e.g., Hedera Hashgraph's 39-node governance model).

2. Transaction Speed

DAG outperforms blockchain in transaction speed. DAGs validate transactions concurrently, not sequentially like blockchains. This parallel verification mechanism allows DAGs to process more transactions per second (TPS), especially under growing demand.

3. Scalability

DAG offers superior scalability. Blockchain systems become congested as usage increases, leading to slower speeds and higher costs. In contrast, DAG’s structure handles high volumes without bottlenecks, making it ideal for applications like IoT and microtransactions.

4. Transaction Fees

Blockchain networks, particularly PoW-based ones, often involve significant transaction fees. DAG systems, with their fee-less or low-fee models, are more cost-effective. 

For example, a transaction on Ethereum may cost up to $0.90, while a similar DAG transaction could cost as little as $0.0001.

5. Security

Blockchain tends to be more secure due to its wide node participation and mature cryptographic consensus systems. DAGs, though efficient, may face security risks due to fewer validating nodes and less-developed attack resistance.

6. Energy Efficiency

Blockchain, especially PoW-based systems like Bitcoin, consumes large amounts of energy. DAG networks are much more energy-efficient. Hedera, for instance, uses just 0.0001 kWh per transaction, compared to Bitcoin’s 240–950 kWh.

7. Maturity and Adoption

Blockchain is still the dominant DLT due to its longer history and broad adoption. DAG is newer but rapidly growing, with projects like IOTA, Hedera, and Nano paving the way. However, it hasn’t yet achieved the same level of trust or integration.

8. Interoperability

While blockchain interoperability has advanced through bridges and cross-chain protocols, interoperability between blockchain and DAG remains technically challenging but promising. Future solutions could combine both technologies’ strengths in hybrid systems.

To summarize the differences between DAG and blockchain, look at the table below:

Read also: A Complete History on DAG: Study Cases of What Directed Acyclical Graphs Can Do

Conclusion: Are Chains Built on DAG Faster?

Chains built on Directed Acyclic Graph (DAG) are generally faster than traditional blockchains. The DAG architecture allows transactions to be processed in parallel and validated by other transactions, bypassing the bottlenecks of block formation and mining. 

This results in greater throughput, lower fees, and higher scalability. However, this speed may come at the cost of decentralization and security, depending on the specific DAG implementation.

So, while DAG-based chains are indeed faster, the right choice between DAG and blockchain depends on your priorities, speed and efficiency vs. decentralization and security.

FAQ

1. What does DAG mean in blockchain?

In blockchain, DAG stands for Directed Acyclic Graph—a type of DLT that stores transactions as nodes in a graph where edges are directional and acyclic (no loops).

2. What is the main difference between DAG and blockchain?

Blockchain structures data in sequential blocks, while DAG uses a web of interlinked transactions. Blockchain relies on consensus mechanisms like PoW or PoS, while DAG allows transactions to validate one another directly.

3. Are transaction fees higher in blockchain compared to DAG?

Yes. Blockchain fees can be significant, especially on networks like Ethereum, while DAG systems often have minimal or no fees.

4. Which is more secure, DAG or Blockchain?

Blockchain is generally more secure due to its high level of decentralization and robust consensus protocols.

5. Can DAG and Blockchain coexist?

Absolutely. In fact, future innovations may lead to hybrid systems that combine the strengths of both technologies for optimal performance.