A common pattern in the cryptocurrency industry is that it is Ethereum that has the biggest scalability problems. Of course, in terms of the cost and time it takes to complete a given transaction.
The case of Ethereum is not isolated, however. Scalability issues are experienced by most blockchains. We have already written about this impediment of the blockchain network here. For this reason, many developers are working to solve this problem. One of their proposals is a multiphase update, called Sharding. What is Blockchain sharding, and why is it so important?
Blockchain Sharding
Sharding is one method of increasing the scalability of blockchain. It involves partitioning the databases that are used in a given ecosystem of blockchain technology. This allows them to perform more transactions per second.
To put it more simply – sharding is dividing the entire blockchain network into several smaller ones, called shards. One shard contains unique data and is independent of the others. As a result, storage in the peer-to-peer network is not so overloaded. So, nodes can perform more transactions, in a faster time. After sharding, each node stores only the data that pertains to its department or shard.
The sharding process is also non-invasive to the entire blockchain ecosystem. Information contained in individual shards can be shared with other nodes, while keeping the distributed order book secure and decentralized. Why? Because after splitting still, any shard can view any ledger entry without retaining data about it. In this way, we avoid overloading the network.
The sharding process is an excellent solution in reducing transaction delays.
How does sharding on blockchain work?
We mainly apply sharding to blockchains, having a great deal of data, but a single base. A perfect example of this would be Ethereum – many developers, working on various projects.
There are more than 300 dApps working on the Ethereum blockchain in addition to developers, which even forces the ecosystem to take advantage of sharding to increase scalability.
The sharding process makes it easier to spread out the stored data, which in turn makes rollups even more cost-effective, while simplifying node support. As a result, Layer 2 solutions benefit from Ethereum while being secure and less expensive.
The sharding process helps divide the entire network into smaller modules, each of which increases the TPS of the network. The whole process seems simple, but it has quite a few important elements in it:
- Nodes.
Each node in the blockchain network processes or manages a transaction that occurs within the ecosystem. Nodes, that run on blockchain technology, are autonomous. Their job is to store all the data that the decentralized network generates. We’re talking about account balances or records of individual transactions.
Through this approach, all transaction processing is very slow. However, it retains a high level of security, since each transaction is stored in each node of the network. The slow speed of transaction processing is not encouraging for potential users.
Therefore, sharding is used to reduce the transaction load. It effectively relieves the burden on nodes, which no longer need to manage or process the entire transaction. Through the sharding process, node management can be more efficient.
- Horizontal Partitioning.
Horizontal division of databases. Also, it can be used to perform sharding. For example: the task of one shard could be to store transaction history and current address status. Another would store data on account balances and so on.
Moreover, with Horizontal Partitioning, shards could be partitioned according to the type of digital assets that are stored in each individual shard.
Why is Sharding so important in the blockchain ecosystem?
There are three, main reasons why sharding is so essential.
- Compression of used data.
As we mentioned in the paragraphs above, each node has a copy of itself, which contains the full history of the network. This is why it is so difficult for hackers to take control and potentially modify transactions. However, maintaining this comes at the expense of the scalability of the entire blockchain network.
- Scalability.
This is the most important advantage of sharding applications. Increased scalability. Through this process, blockchain can split nodes and store more information. And this without slowing down the transaction time!
As a result, developers have already aired the potential. With sharding, more industries can implement blockchain technology in their operations. Finance, FinTech, banking can take advantage of blockchain and compete with centralized counterparts.
- Availability.
Improved accessibility for network users is an additional benefit of sharding. Using Ethereum as an example, sharding reduced the amount of hardware required to run the network. This can easily be done on consumer devices. The result – more people participate in the network.
Sharding, and security
Sharding, like most blockchain scalability solutions, is only in the testing phase. However, its advantages are undeniable.
A problem that can occur during sharding is the collision of shards. One shard can take control of another. As a result, the information in it may be lost. We also consider that malicious shards can introduce blockchain damaged data into the network.
If we look at Ethereum, such a danger is very limited and virtually impossible to occur.
Another danger to consider is a cyberattack on a single shard. After such an action, fraudulent transactions can be introduced into the network. However, this possibility has also been minimized. In the case of Ethereum, nodes have been assigned to specific shards.
Examples of blockchain networks using sharding.
- NEAR
NEAR focused on real-time cross-shard transactions. At the same time, he wanted to keep the network load light for users. How did he do that? He allowed each low-end device to run a node as part of the overall network.
Consequently, each such device helps process a subset of transactions. The Sharded Proof of Stake blockchain NEAR has greater scalability and allows network nodes to run on low-end devices. With this solution, the network gives access to many additional devices, and these improve the speed of the entire ecosystem.
- Ethereum Beacon Chain
Beacon Chain, is the main chain in Ethereum 2.0. Its job is to process cross-links and “store” active validators waiting in a queue. It also helps process the block by block consensus in Ethereum. Functions include:
- Management of validators and their rates.
- Implementation of existing consensus principles.
- Organizing voting on proposed changes.
- Assign rewards and penalties to validators.
- It records the states of the shards and is responsible for transactions between them.
Polkadot Parachain
This is another interesting project, which we wrote about here. It’s a very intriguing use of shards in a distributed database. The whole ecosystem offers a simplified perspective of the blockchain network. It is also worth mentioning that Polkadot has highly specialized parachain, which we have already written about.
Summary
The process of sharding is undoubtedly a fascinating and noteworthy solution, improving the scalability of a given blockchain network. Admittedly, the desired results are far from being achieved, but developers are working to optimize the entire process. They are solving any obstacles that may arise, while working to improve security.
