DAG-BLOCK: A Novel Architecture for Scaling Blockchain-Enabled Cryptocurrencies

With the rapid development of blockchain technology and industries, scalability has been widely realized as one of the primary and urgent concerns for the large-scale adoption of blockchain, especially for cryptocurrencies. In this respect, directed acyclic graph (DAG) proves to be an elegant solution to scaling blockchain but suffers from weak consistency and security issues. In this article, we designed a novel DAG-BLOCK architecture for blockchain-enabled cryptocurrency markets in order to improve the scalability. In our work, DAG is used to replace the Merkel-tree-based transaction structure within the block, and a novel design of open blocks is proposed to enable user nodes to participate in verifying the transactions in blockchain systems. On this basis, we designed a new segmented market structure, in which each miner serves only a group of users instead of all users, so as to reduce miners’ workload and thus scale transaction processing capabilities. Our work can help improve the scalability of cryptocurrencies via evolving the underlying blockchain systems to graph-based distributed ledgers and is expected to shed new light on designing blockchain-based decentralized markets.