DAG vs. Blockchain: Bitcoin vs. Nano what are the differences and the similarities? Well, DAG is being hauled as the Blockchain replacement for a ton of reasons. How far is that true and what makes it untrue? All of that’s being discussed in this piece.
Not just the technologies, we’ll also discuss their offsprings, namely Bitcoin and Nano, and how they’re similar as well as different from each other.
This is an unbiased article. Meaning, I’m neither for Blockchain nor against it. Similarly, no prejudices are being harbored for DAG or Nano either.
I’ll simply list out the pros and cons and let you decide what you think of either technology.
Nothing in this article is financial advice. Always do your research.
Table of Contents
How are DAG and Blockchain similar?
You can always understand the differences for anything better if you first understand how they’re similar.
Well, both DAG and Blockchain are “ledgers”. They record transactions. More specifically, digital, Cryptocurrency transactions. They’re both also “public” meaning there’s 100% transparency and anyone can verify the movement of funds from one wallet to another.
They both also offer irreversible modes of transaction and they both support smart contracts.
That’s about the similarities. What makes them different then?
DAG vs. Blockchain
The reason DAG is hauled as Blockchain’s replacement isn’t entirely without logic. It does bring a few benefits that Blockchain doesn’t offer.
- Free transactions: So, DAG’s biggest benefit is that it’s free! Well yes, the transactions on the DAG do not cost money! This solves probably the biggest problem with any transaction on the planet, who doesn’t like to save money, eh?
- Ledger structure: The second equally consequential difference is that Blockchain records all transactions in a linear ledger. On the other hand, DAG records them in a more web-like structure.
- Ledger verification: Bitcoin is created and verified via mining and miners. It requires high-end computers as well as quite a bit of electrical juice. Miners use their computers to solve puzzles to validate transactions. The first miner to solve the problem wins and is rewarded. DAG on the other hand doesn’t use miners. Transactions on the DAG ledger verify each other by referencing previous transactions. This also means there’s no, or negligible use of electricity.
- Faster transactions: DAG doesn’t employ mining, which means there are no complex mathematical puzzles to solve for block validation, this translates into saved time which means much faster transactions.
Bitcoin vs. Nano- Similarities
Nano is to DAG what Bitcoin is to Blockchain. They’re both Cryptocurrencies utilizing their own technologies.
Let’s look at what makes them similar so you can compare them better.
- Digital currencies/Cryptocurrencies: Of course, they’re both Cryptocurrencies.
- Assets: Both coins can be used as assets and investments. Profits or losses aren’t guaranteed and depend on market conditions and this is true for both Cryptocurrencies.
- Capped max supply: Both Cryptocurrencies have a maximum limit. This of course increases their demand over time.
Bitcoin vs. Nano- differences
Now that you know what makes them the same, let’s discuss what’s different.
- Fee: Bitcoin transactions cost a fee which is paid to the miners for validating the transaction. Nano, functioning on DAG has no fee.
- Speed: Due to the way transactions are verified on DAG, Nano transactions are almost instant while Bitcoin is comparatively much slower.
- Security: Bitcoin still has an arguably more secure form of transaction validation than DAG. Not that DAG is unsecured but Bitcoin just has a more established network of validators and mechanisms (for now).
- Current adoption: As of April 2024, Bitcoin has a much stronger adoption rate as compared to Nano. It has nothing to do with one coin’s potential or features but is just a factor of age and discussion.
- Use-cases: Due to their fee and transaction times, Nano seems to be the better option for payments while Bitcoin (due to its adoption, age, and all other factors) seems more of an investment.
Final words
In terms of features, the DAG ledger or Nano as a cryptocurrency has benefits over Bitcoin. However, these aren’t one-sided. Bitcoin too has its importance and features and more importantly market cap.
Of course, with the crypto market being all volatile, it’s not definite who will rule the industry in the coming years.;
For now, I’ll say DAG is not only a major competitor but also a threat to Bitcoin to some extent. You can always look at platforms like Quantum 360 GPT for more in-depth knowledge,
Do note that nothing in this article is financial advice, always do your research before investing.
