Sharding in crypto: What is sharding, and why is it important?

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One may ask, is there a need for sharding in blockchain?

Blockchains have had scaling issues since their inception.

Several ideas, technologies, and scaling solutions are integrated with the Blockchain to help it scale further than ever before.

All while maintaining decentralization and security features that have made the technology stand out.

Now, suppose blockchain networks want to achieve more scalability, like some centralized entities like visas that do about 1,700 transactions per second TPS. In that case, they’ll need to do more in scalability.

Visa is still significantly faster than bitcoin and most other blockchains.

There is no reason bitcoin and other blockchains cannot reach much higher speeds and levels of throughput without compromising their security, but this will take time and tech. 

We can implement Blockchain scaling in a range of ways, from increasing the block size to layer two solutions like zk-rollups, optimistic rollups, DAGs, and scalable A consensus algorithms like DPOS, to name a few, have been built and integrated on the Blockchain.

All to make it scale by using techniques such as sharding, all of which carry various trade-offs. 

Since their inception, blockchains have faced this classic ‘trilemma‘ of simultaneously achieving scalability, security, and decentralization.

Most Blockchains only have the best of both, it’s either they’re sacrificing decentralization for scalability and security by having a “fixed Decentralization”, or sacrificing scalability for decentralization and security thus having a lagging Blockchain with low throughput and so on.

Decentralization is blockchains’ core and intrinsic nature, and security is an essential property, whereas scalability is the main challenge. 

What is sharding?

Sharding is a database partitioning technique that can be integrated into the Blockchain to increase scalability by processing more transactions per second. 

Shards are different Blockchains, i.e., sub-chains built over the main Blockchain. We can think of them as branches of a tree, with the tree being the main chain and its branches the shards. These shards comprise a network of nodes that keep them running.

Shard chains are independent, meaning they can have their consensus mechanism and handle their security.

Sharding technology has long been available. It has been used in centralized databases long before blockchain technology and is primarily used to optimize large commercial databases.

The idea is to divide the data in the database into many data fragments and then distribute these fragments to different servers for storage.

As a result, there will be no server overload because of many data access requests in a short period.

We regard sharding as the most practical solution for horizontally scaling blockchain systems.

How does it work?

When the system accumulates transactions on the main chain, a number of these transactions are distributed to the sharded network (shard chains).

This method helps to reduce the tension on the main chain, attaining faster transaction times.

With these shard chains handling/verifying and recording tons of transactions, this will increase the scalability of the Blockchain regarding throughput, thereby creating an avenue for accommodating more nodes on the network.

Why is it important?

Each node must confirm transactions in the traditional blockchain network to ensure security, which is one of the main reasons increasing transaction speed is difficult.

Most blockchains are single-chain structures, i.e., “single block-single chain,” and in a proof of work POW enabled Blockchain, all miners compete to add a block to the chain, and blockchains have a fixed average time for generating blocks.

Consider Bitcoin, which generates a block every 10 minutes.

As more miners join the mining ranks, the Blockchain will automatically increase the mining difficulty to ensure that the block generation speed remains constant at one block every ten minutes.

Increased computing power cannot improve transaction speed, so Blockchain is not scalable.

Sharding technology applies to the blockchain network and divides the network into different partitions (or shards).

The technology will assign the data and transactions stored in the network to each shard randomly.

As a result, each node only needs to process a small portion of the work, and it can process transactions from different shards in parallel, increasing network transaction speed.

Sharding is one of the most practical solutions for scaling a blockchain system, as it allows for parallel calculation, storage, and processing.

Capacity and throughput may be proportional to the number of shards or nodes taking part.

Blockchains that use sharding.

Ethereum

Ethereum, a prominent permissionless blockchain, is on the frontline of testing sharding as a scaling solution. 

It plans to roll out 64 new shard chains, which are where the Ethereum Mainnet will “merge” with the Beacon Chain proof-of-stake system.

Sharding in Ethereum will increase scalability and capacity, as they allow Layer-2 solutions to offer low transaction fees while maintaining Ethereum’s security.

Ethereum has combated the potential of a shard attack by randomly assigning nodes to specific shards and constantly reassigning them at random intervals. 

This random sampling would make it difficult for hackers to know when and where to corrupt a shard, making the Blockchain highly secure.

Polkadot

Polkadot deals with a network of diverse blockchain shards. Sharding, in this context, deals with dividing the work that occurs into multiple sub-blockchains known as parachains.

Heterogeneous means each Blockchain has its state-transition function explicitly designed for a particular use case. 

Different transactions have different homes, allowing for specialized chains that efficiently serve their users.

Polkadot parachains rely on the relay chain for its consensus layer and, hence, security.

Computations performed by each shard on Polkadot are inherently independent, resulting in increased network capacity.

Zilliqa

Another blockchain network that uses network sharding is Zilliqa. Sharding allows it to be truly scalable.

The ability to process transactions in parallel is because of the sharded architecture, which ensures that an increase in the network size will lead to a corresponding increase in throughput. How amazing is that?

Exponential scalability grows because of increased processing power and information distribution around the network.

Bottomline

All blockchain networks, as well as businesses and industries, strive hard to overcome their limitations.

Blockchain technology will become much more adopted by an even wider audience by addressing these scalability inconsistencies. 

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One thought on “Sharding in crypto: What is sharding, and why is it important?

  1. Very informative piece