The Directed Acyclic Graph (DAG) is a particular kind of Decentralized Ledger Technology (DLT) that is distinct from blockchain technology. In layman’s terms, a Directed Acyclic Graph in computer science refers to graph in which the edges of the graph go only way. Another important point is that it is impossible to traverse the graph starting from one edge i.e. there are no cycles in the graph, hence the term “acyclic.”

The difference between DAGs and blockchains is that it is possible for multiple chains of blocks to function on a DAG, but not in the case of a blockchain.

The most prominent project using the DAG protocol is IOTA, a top 10 by market cap project that has received a lot of attention and support for its use of DAG and its Tangle mechanism, which grows in processing performance as more users join the network. IOTA’s Tangle and DAG network has seen it quickly rope in major players from various industries, most notably automobile giants like Volkswagen.

DAGs are seen as having a particularly large amount of potential in areas like the Internet of Things (IoT), where a large number of devices frequently make a large number of transactions with each other. A world run on devices, where each of these seamlessly communicate with each other to offer individuals uninterrupted services, would require a network that can process that kind of load, and DAG projects are preparing for that kind of future.