What Is Blockchain Sharding?

Sharding – One of the main barriers to a wider adoption of blockchain technology in various sectors is its lack of scalability. Sharding can assist blockchains become more efficient and scalable, which would increase their competitiveness versus the existing centralized systems.

What is Sharding?

Public, permissionless blockchains are decentralized, secure distributed ledgers that can store any type of data. Since there is no central authority in the network, all data must be processed by each node individually, and new data is only added to the ledger after consensus among the nodes. By doing this, the network makes sure that the data is saved accurately and cannot be tampered with by one or more malevolent nodes.

Blockchain technology’s decentralized nature lends it its appealing quality—resilience to malicious data modifications—but it also leads to one of the main barriers to its wider adoption—a lack of scale.

The system’s latency, or slowness, drastically rises as more nodes are added and the volume of data in the ledger increases. Consider a distributed payment system. It takes time to update the data across all network nodes whenever a new transaction needs to be handled. Here, centralized networks offer a clear benefit. One such example is the Visa payment system, which states that it can handle more than 65,000 transactions per second.

One approach to the issue of blockchain scalability is sharding. It denotes the division of the database into so-called “shards,” where each shard is in charge of processing just a portion of the network’s data. 

How it works?

Sharding involves “slicing” the database into smaller parts by grouping the network nodes into these groups and distributing the data contained in the network among them (shards). So that the shards can be recognized from one another, each shard stores data with specific properties.

Splitting the database horizontally, or into rows, is one method of sharding. In this manner, the rows make up the shards that can hold particular kinds of data. Shards may be divided, for instance, according to the kinds of digital assets or smart contracts they support.

The alternative method of sharding involves setting up network nodes in such a way that a central relay network serves as a conduit for communication with all other “side networks” or shards. In this manner, shards can store and process any type of information that is necessary for their tasks, and this information can be made available to other shards over a relay when necessary.

In order for any user of the network to have access to all the data contained in the blockchain, shards must somehow be able to connect with one another.

What are the benefits?

Improved scalability is the main advantage of sharding as it relates to blockchain technology. Sharding enables a blockchain to link more nodes and store more data without significantly slowing down transaction rates. This might hasten the adoption of blockchain technology across a variety of industries, not the least of which is finance. Fintech businesses using blockchain technology can compete with centralized payment systems by offering faster transactions.

Greater network involvement and improved user accessibility are other advantages of sharding. In Ethereum, sharding is anticipated to reduce the hardware requirements for running a client, making it possible to do it on a smartphone or personal computer. More people will be able to join the network this way.

Sharding may increase some hazards in addition to its possible benefits. The takeover of a shard or collusions between shards are among the security issues. As a result, information may be lost partially or whole, or a malicious shard may introduce corrupted data into the network. By randomly allocating nodes to shards and reassigning them at random intervals, Ethereum 2 addresses this security problem.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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