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What is Graphchain?

Graphchain is a "Layer-1" Directed Acyclic Graph (DAG)-based protocol. It was originally introduced in an academic paper by Xavier Boyen, Christopher Carr, and Thomas Haines, first written and disseminated in 2016 and subsequently published in 2018. This is one of the first to write about the application DAGs in blockchain technoligy.

Graphchain has been under development into a working system since 2021, currently has an operational testnet and a mainet going live planned for early 2025. Since

DAGs?

DAGs are relatively simple to understand, and we display them visually circles (nodes) and arrows (edges). The term is taken from the matemtaical area of Graph Theory. If we think of the Bitcoin blockchai structure, it is also a DAG but with more restictions.

What is a DAG?

DAG stands for Directed Acyclic Graph. A DAG idea is taken from the matemtaical area of Graph Theory. It consists of:

  • Nodes (vertices): Usually represented by circles or squares, representing data points, such as transactions or blocks in cryptocurrencies.
  • Edges (arrows): Representing relationships between the nodes.

Key Properties of a DAG

  1. Directed:
    Each edge has a specific direction, indicating the flow or relationship between nodes.
  2. Acyclic:
    There are no loops or cycles, meaning you cannot traverse the graph in a way that leads back to the starting point.

A Graph Example

Below is a DAG-like diagram 

  DAG graph directions;
  A   -->   B;
  A   -->   C;
  B   -->   D;
  B   -->   E;
  B   -->   F;
  C   -->   D;
  D   -->   G;
  E   -->   G;
  F   -->   G;

graph LR
  A[A]   -->   B[B];
  A[A]   -->   C[C];
  B[B]   -->   D[D];
  B[B]   -->   E[E];
  B[B]   -->   F[F];
  C[C]   -->   D[D];
  D[D]   -->   G[G];
  E[E]   -->   G[G];
  F[F]   -->   G[G];

A traditional blockchain (like Bitcoin) can be thought of as a restrictive DAG, where blocks form a single linear chain. Graphchain expands on this by allowing a more generalized DAG structure, enabling multiple parallel paths and reducing bottlenecks.

Why use DAGs?

Graphchain uses a DAG-based infrastructure that is similar to Bitcoin, but offers much greater scalability. This scalability comes with different, more complex, security assumptions, which relies on rational actors.

Nonetheless, DAGs have several advantages over traditional linear blockchain structures. The two most prominent are:

  • Scalability: A DAG structure supports parallel transaction validation, allowing the network to process many transactions simultaneously without waiting for a single block to complete.
  • Efficiency: The absence of a linear block structure eliminates the need for mining races, reducing computational overhead and energy consumption.

Bitcoin’s blockchain is also a DAG, just with additional restrictions which make it linear. Graphchain uses the full potential of DAGs to improve scalability without compromising on key features like decentralisation.