Home Blockchain Blockchain vs. Hashgraph vs. DAGs – Which is the best DLT?

Blockchain vs. Hashgraph vs. DAGs – Which is the best DLT?

by Abigail Bautista

Distributed Ledger Technologies (DLTs) are transforming the digital era by revolutionizing how data is handled and transactions are performed in a decentralized landscape. These technologies, such as Blockchain, Hashgraph, and DAG (Directed Acyclic Graph), provide more precise, secure, and accessible solutions without the need for a central authority.

While all of these technologies fall under the category of DLTs, they each have unique features that differentiate them from one another. In this article, we will explore the key differences between blockchain, hashgraph, and DAG.

Blockchain, as most people are familiar with, is a digital ledger consisting of linked data blocks. Each block contains a group of transactions and has a unique cryptographic hash from the previous block, creating the “chain” in the blockchain. Unlike centralized systems, blockchain operates without a central authority. Various participants share control and validation responsibilities. Network consensus is necessary to validate and include a transaction or change. The most common consensus methods are Proof of Work (PoW) and Proof of Stake (PoS), which ensure transaction security and discourage malicious activities.

Hashgraph, though often compared to blockchain, employs a different system and structure. It utilizes a graph-oriented approach, where information is dispersed across the network through a process known as the “gossip protocol.” This protocol revolves around events, with each event being linked to its immediate predecessor, creating the intricate web structure of Hashgraph. Instead of relying on PoW or PoS, Hashgraph incorporates the Byzantine Fault Tolerance for consensus. This mechanism offers efficiency and potentially outperforms PoW in terms of speed and energy consumption.

Directed Acyclic Graph (DAG), on the other hand, introduces a unique variation to distributed ledger technologies. Unlike blockchain and hashgraph, DAG does not use blocks and miners. Instead, it operates on a system where each transaction acts as its own validator. When a new transaction enters the network, it is responsible for verifying the legitimacy of the two preceding transactions. This creates a vast, interconnected mesh of transactions, providing security and verification. DAGs are known for their potential speed and scalability and offer a promising alternative to traditional blockchain models.

To summarize the key differences between these technologies, we can refer to the table of comparison:

| Parameters | Blockchain | Hashgraph | DAG |
| Structure | Linear Chain | Events | Web-like |
| Consensus | PoW, PoS | Gossip | Direct References |
| Speed | Slower | Fast | Varies |
| Open Sources | Mostly | Limited | Varies |
| Scalability | High | Limited | High |
| Energy Efficiency | Varies | Lower | Higher |

When choosing the best DLT for a specific application, it is important to consider the requirements and goals of the project. Blockchain’s security and maturity make it a reliable choice for many applications, but its scalability issues can be a drawback. Hashgraph offers efficiency and speed but is less decentralized in terms of ownership. DAGs promise scalability and zero fees but are relatively new and may face challenges in terms of security and broad adoption. It is also worth noting that new advancements and hybrid solutions might emerge in the future, combining the strengths of these different DLTs. Ultimately, it is crucial to assess individual needs and choose the technology that aligns best with the project’s specific requirements.

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