How Do Different Blockchain Architectures (E.g. DAGs) Handle Transaction Confirmation and Finality?
Traditional blockchains use linear chains where confirmation relies on depth. Directed Acyclic Graphs (DAGs) like IOTA or Nano, however, do not have blocks or a single chain.
Instead, transactions confirm other transactions, forming a graph structure. Finality is achieved through a different mechanism, often a voting or consensus process among nodes on the transaction's validity and placement within the graph.
This can lead to near-instantaneous probabilistic finality, but they face their own unique attack vectors.
Glossar
Blockchain Architectures
Framework ⎊ Blockchain architectures encompass the fundamental design choices regarding consensus mechanism, ledger structure, and smart contract virtual machine that dictate the performance and security characteristics of a platform hosting financial derivatives.
Directed Acyclic Graphs
Topology ⎊ Directed Acyclic Graphs represent a computational model where nodes connect via directed edges, precluding cyclical paths; within cryptocurrency, this structure underpins block validation and transaction ordering, ensuring a verifiable and immutable history.
Confirmation Mechanism
Consensus ⎊ The confirmation mechanism, rooted in the network's consensus protocol, provides the final arbiter for transaction validity and order execution across the ledger.