Scalability has been a key point of discussion on the blockchain scene for a while now. Bitcoin is inherently limited - each block can only contain 1mb of data - while Ethereum has proposed a ‘sharding’ solution which could take up to five years to implement.

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But for now, Bitcoin’s maximum capacity for transactions per second is thought to be about 7 while Ethereum can handle up to 20. The current lack of an efficient scaling solution means that a network on the blockchain is prone to clogging, which in turn results in slow transactions and high fees.

While as blockchain-based networks grow they become less efficient, a DAG-based network sees improved performance as the number of network users grows. This is the beauty of this type of architecture; each broadcasted transaction simply entails the validation of the transaction on either side.

It might be that DAG becomes the go-to solution for applications to be able to reliably scale into the future to the tune of several thousand transactions per second.

DAG architecture is poised to offer a lasting fix

So how to keep transaction confirmation time reliably quick, even if the network is facing high demand? The CyberVein DAG can help this with a relatively simple concept that strays from the standard all-node consensus such as in Bitcoin.

This could have a massive impact: traditional Bitcoin has a confirmation of around ten minutes, while the gold standard of six confirmations accepted by many as safe and secure can take up to an hour.

Instead, with DAG, the only nodes needed are the neighbour nodes - aka. the one that comes before and the one that comes after - which means that each and every transaction confirmation is able to complete in a matter of seconds.

No mining involved whatsoever

There are no miners on DAG-based networks; the validation of any transaction goes directly into the transaction itself, meaning that they can be broadcasted almost instantly.

This makes for a huge improvement on efficiency. A DAG structure allows for the broadcasting of as many transactions as desired, so long as there are enough ‘father-son’ units to confirm the transaction.

Being split up into lots of mini DAGs also means that nodes don’t have to process the entire network and simply just have to deal with subsets of transactions. This creates a lighter, more streamlined network than the blockchain can currently offer.

Proof of Work vs Proof of Contribution

Proof of contribution works for a similar end to Bitcoin’s PoW in making an attack nearly impossible to carry out. The big difference with PoC is that it measures a node’s usefulness by measuring the amount of storage it donates to the network.

There is a great deal of redundancy in proof of work because computational power is largely used on mining blocks, which involves solving cryptographic puzzles that otherwise have no utility. This does however serve the important purpose of helping to eliminate the risk of double-spending.

The CyberVein DAG has its own method for preventing double-spend. An incentive exists for users to contribute more storage space in a higher CVT payout, with nodes that store an entire ledger becoming identifiable as ‘Full Nodes’. The network becomes intrinsically safe when a large number of nodes volunteer to store more data than required.

It would be costly for attackers to create pretend full nodes as they would have to give up an incredibly substantial amount of disk space to then attempt an attack as rapidly as would be necessary.

Essentially, as long as the network contains enough full nodes, a parasite sub-tangle created from an attacker’s fraudulent nodes would get quickly left behind without being verified and thus not be allowed to infiltrate the network.

Also a rapid alternative for future atomic cross-chain trading?

Cross-chain technology allows completely different blockchains to transact with each other. So, rather than going through a third-party exchange, atomic swaps allow different crypto tokens to be swapped on a user to user basis.

The idea follows that token trades can be conducted very quickly on a DAG architecture. Atomic cross-chain trading makes use of smart contracts to verify secure swaps wherein an equal exchange can be made between both parties.

This is an intriguing concept which would reduce the need for centralized exchanges and make the process of trading cryptocurrencies a lot more direct, with reduced fees.

If you’d like to learn more about how CyberVein’s DAG architecture can offer a scalable solution for the future, please join the discussion on Telegram, follow us on Twitter, and subscribe to our newsletter. Our team are always delighted to hear your thoughts and questions so feel free to reach out to us!

All the best,

The CyberVein Team