Directed Acyclic Graph (DAG)

Vertices and edges make up directed acyclic graphs. In contrast to a blockchain, there are no blocks. The alternative is to record transactions as vertices that are stacked on top of one another. Similar to a blockchain, the DAG receives transactions from nodes. A node must finish a Proof-of-Work task in order to submit a transaction.

Similar to how blocks on a blockchain contain references to earlier blocks, every new transaction in a DAG must refer to earlier transactions in order to be allowed onto the network. A transaction is confirmed when it is cited in another transaction. That transaction needs to be referred to by another transaction for it to be confirmed, and so on.