The cryptocurrency industry consists of a vast and complex landscape, where hundreds of little gears work together to run a well-oiled machine. There are so many things that can be done on or within a given blockchain, but the blockchain itself can also be divided into multiple parts. This is called fragmentation. But how does blockchain sharding work and what exactly is its purpose?
What is blockchain sharding?
when many of us think of a blockchain, we imagine a long line or chain of information. So let’s apply this idea to better understand chunking. A typical blockchain consists of a chain of blocks and works as an individual network that stores data in a decentralized way. While this is not a very flawed system, the growing popularity of cryptocurrencies and blockchains poses a serious problem for decentralized organizations: scale limitations.
As the number of transactions taking place on a blockchain increases, a backlog of unvalidated blocks begins to form. This is a major issue on the Bitcoin blockchain, where users have to wait a frustratingly long time for their transactions to be processed.
Bitcoin scalability issues they are partly the fact that their block sizes are quite small, coupled with the fact that the Bitcoin blockchain is so popular that developers and miners simply can’t keep up with the gargantuan transaction volume. This is the reason why blockchain companies are now looking for scalability solutions so that they can better support their users and provide them with a more convenient experience. And, when it comes to scalability, sharding can certainly come to the rescue.
The sharding process involves dividing a blockchain into multiple “shards”. The process itself involves a few steps, including the horizontal partitioning of databases, through which each blockchain is given its own function or purpose. For example, one blockchain could be used to store data in a given token, while another could be used for network governance.
It is important to note that sharding is not the same as a hard or soft fork as no change is made to the protocol when the blockchain is split. Instead, each blockchain shard uses the same protocol, while processing and storing its own unique data that can still be shared between other nodes. By dispersing data storage across blockchains in this way, efficiency levels can be greatly increased.
While sharding sounds like a great solution to the scalability problem, it does present a security risk. The risk of one shard being corrupted and taken over by another is a concern and could have catastrophic consequences for any blockchain and its users.
Also, there are some issues around consensus mechanisms within any network that uses blockchain shards. Consensus is an integral part of any blockchain as it keeps your decentralized ledger secure and unalterable. But when a blockchain is split into multiples, not all nodes have to authenticate all transactions. Instead, only nodes on a blockchain shard will have to validate the transactions that take place on that specific shard.
So, in this case, the entire network is not decentralized. Instead, only each chunk of the blockchain is. A typical blockchain does not have this problem and more clearly aligns with the idea of decentralization in all areas.
Although blockchain sharding has its potential drawbacks, several large companies are already using it or considering adopting it to improve scalability. So which big names have or will welcome sharding on their network?
Which cryptos use blockchain sharding?
Ethereum, the world most popular blockchain to build decentralized projects, it will use sharding to increase the number of transactions processed each second. This big upgrade will involve several steps, with the first blockchain shards appearing in 2023.
But some blockchains already use sharding, like Zilliqa. One of Zilliqa’s key attributes is its ability to provide scalability through the sharding process. Zilliqa currently has four individual blockchain shards, and every transaction within the network is validated by the nodes within one of these shards.
Zilliqa’s scalability makes it one of Ethereum’s competitors, although Ethereum’s decision to embrace sharding will cement its place as the most popular smart contract blockchain for the foreseeable future.
Fragmentation could soon become commonplace in the crypto industry
With scalability limitations being one of the biggest issues in the decentralized world, it’s no surprise that many companies are considering sharding to avoid latency. While fragmentation does present some risks, it can offer networks the ability to reduce transaction times and increase user satisfaction – a win-win for both businesses and customers!
What is a blockchain and how does it work?
About the Author