In order to validate a transaction in the Blockchain network, every single nodes of the network need to perform a consensus algorithm called "Proof of Works" which is to find a number (nonce) and calculate a formular to match with certain value according to the difficulty level.
In the past, miners has used a lot of computing power to compete with each other in order to get the reward, which leads to increasing difficulty level, taking much more computing power, comsume a lot of energy, produce latency and create scalability bottle neck.
To solve this problem, the CHANGE is needed:
1. Data Structure CHANGE: from blockchain (chain of blocks) to DAG (Directed Acyclic Graph)
2. Consensus CHANGE: from Proof-of-Work to Lite-Proof of Work ( A lite version of Proof-of-Work which low difficulty level, fast to compute can embeded in small device)
So now, we don't need big minner machine to do the Proof-of-Work even a sensor node or mobile phone can becomes the miners and everybody validate each other transaction.
Scalability problem of the Blockchain network seem to have light, but still through out the history of DLT (Distributed Technology Ledger) is trying to solved the "Double Spend Problem". Inside the DAG structure, invalid transaction could survive within a period of time before the honest node spot it and ignore it. Which is why each transaction has it own STATE (Unconfirmed, Confirmed), even if the transaction is visible in the Blockchain network, if the STATE is unconfirmed it might be risk that the transaction will not be valid and if the user decide to exchange the product or service during that STATE, they might not get the money inside the unconfirmed transaction. So be sure that the transaction is confirmed in Bitcoin Blockchain need to wait for 6 Blocked Confirmation after the Block that contain the transaction, while other Blockchain related need to wait for certain amount of probability let's say 80% or 90% of the confirmation from other nodes.
Be aware that "There is a time-window" that might produce risk of your transaction that you recieved or made.
Be curious to learn more.
Yes, am curious to learn more from you. Do you think that DAGs have a bright future, and that they will become more popular than PoW and Lite-PoW? Are there already IoT projects running on Lite-PoW?
What are the Blockchain that uses DAG:
IOTA, Steemit, Serey ... So these are the platform that you should follow, how far DAGs can go. Beside that Governance is also an important issue. Who create the rules and make decision.