As crypto and blockchain grow, scalability is a popular word when discussing the future of the same. Blockchain has outgrown the crypto niche, and it is currently poised to revolutionize supply chains, fintech, real estate, and other industries. For blockchain to perform its best, it must overcome the limitations preventing people from choosing it. One of them is the time-consuming transaction processing which is also a hurdle for scalability. Sharding is a process developed and tested by startups, developers, and blockchain platforms like Ethereum to solve the issue.
Sharding crypto means splitting the database in the blockchain horizontally or vertically as ‘shards’ to distribute the load. Crypto tokens that encounter severe traffics in transactions can prevent network congestion and increase the number of transaction per second.
The sharding process involves splitting the database into smaller partitions or shards to reduce the computational and storage workload across a peer-to-peer (P2P) network. The individual computers that run the blockchain are called nodes. During sharding, data is split and distributed to the nodes, so the nodes don’t have to check every transaction. They only need to process the transaction of its type or the one assigned to in the partition.
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Blockchain sharding works based on the system of division of labor. This is achieved through the processes of horizontal partitioning and vertical partitioning. The database is divided into rows in horizontal partitioning and is distributed across multiple nodes. Each row is called a shard. Vertical partitioning separates shards based on columns.
A database is split based on its type and the data contained here. Sets of nodes are assigned for different types of shards, split vertically. A particular shard might carry the transaction history of a specific kind of address. It will be labeled separately. Shards are also divided based on the type of asset stored in them. A combination of nodes that approve those shards is required to conduct a digital asset transaction.
Take a look into some of the popular sharding methods explained in layman’s terms:
A distributed ledger is a record-keeping system that stores data on different servers located in different locations. The blockchain is based on a decentralized distributed ledger system, and its function is to transmit transactions across multiple networks based on mutual consensus. Every transaction is recorded, and the copies are sent to the network immediately as proof.
Even if there is one fraudulent activity, the network participants can identify it. Each node in a blockchain must process all the network transactions. The nodes are critical to bringing about account balance and maintaining transaction history. Blockchain technology with nodes and distributed ledger help reduce the number of cyberattacks and other frauds online.
Even though this process in the distributed ledger ensures security, it considerably slows down the transaction speed. In the future, when blockchain will bear millions of transactions, we cannot afford to lose time. You can implement sharding on the data contained in the distributed ledger, which typically includes transaction time, hash and block, amount of currency, and the public identity of the sender and receiver.
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The process of partitioning helps spread out these databases such that the load on each node decreases. Moreover, this leads to an increase the transaction speed and volume.
Blockchain developers care about the three main aspects, decentralization, scalability, and security. As more people join the peer-to-peer network, the load affects the efficiency of the blockchain. Network latency is the time lag in getting the first approval for a transaction. Latency is big trouble to be addressed before adopting blockchain universally.
Scalability is the ability of a blockchain to cope with large amounts of transactions in little time. Ever since the inception of Bitcoin, scalability has been repeatedly brought up as a key concern. Partitioning and systematically distributing the transaction data through sharding will help blockchains scale higher.
The individual computers linked to a blockchain are called nodes. Presently in the blockchain, every node in a network must process all transactions and record all the history. Such nodes are called archival nodes.
They are the primary reason for the top-level security offered by blockchain. Every node must process, record, and broadcast a transaction to the next node. The process becomes tedious for large networks like Ethereum or Bitcoin.
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Sharding compartmentalizes the nodes into categories based on the data or digital assets they carry. This way, every node in a blockchain does not have to authorize every piece of data. The nodes assigned for each type will do the job, but the rest of the nodes will still get to view the transaction history.
Every single shard, the partition, or the portion of the database that is split, can be shared among other shards. Even though we are classifying, every user in the blockchain will still be able to view all the transactions in the ledger. This is called Shard sharing.
Sharding crypto is necessary to increase scalability, which also increases speed. Blockchains have a consensus protocol that demands every data to be processed by every single user or a node in the network. The users validate the authenticity of data through a blockchain.
Consensus protocols like proof-of-work (PoW) are intense computing processes that take time and energy. In bitcoin, you can process new transactions if most nodes authenticate it. This makes transactions slow and tedious.
Currently, bitcoin can process upto seven transactions per second. Ethereum can process upto 30 transactions per second. At the same time, VisaNet of Visa can process 1,700 transactions per second.
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Partitioning data reduces the load on each node so that every node does not need to authenticate every transaction. Reduced load leads to increased speed and an added advantage of different digital asset compartmentalized transaction records.
Thus, sharding crypto is necessary to provide high-speed instant transactions to users while also maintaining and organizing the database into categories.
The most important reason why splitting the data in crypto is necessary is to increase the number of transactions per second and speed. With the scale at which blockchain is being adopted worldwide, latency in data processing needs to be prevented—sharding brings a novelty in data transmission, maintenance, and segregation.
One of the issues that come up here is regarding security. Each shard in a blockchain is separate and only processes its data (or kind of data). One shard could take over another, causing information loss. A hacker could cause a cyber attack by introducing false data into the separate shards in the shared blockchain.
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But records of such instances are very few. Universally, this concept has been adopted to manage all kinds of databases. Compartmentalizing makes it easier to backup, store, transfer and optimize data.
Popular blockchains that have adopted this process are as follows:
Ethereum’s sharding approaches are aimed at increasing scalability and capacity. It is a multi-phased upgrade with layer two solutions enabled. It is expected to be introduced in 2023 as a development in Ethereum 2.0. The layer 2 solutions offered by Ethereum will also be aided by data splitting to enable low transaction fees and high security.
NEAR uses a protocol called Nightshade for scaling. Nightshade allows the blockchain to grow continuously while storing only a portion of the blockchain on each shard. NEAR has gone ahead by building a mechanism to split a shard into multiple parts. It is done through live upgrades and is said to hold the baton for dynamic resharding.
Polkadot splits the blockchain into sub-blockchains, also called heterogeneous shards. All parachains uphold security and also have messaging facilities between attached shards. Every heterogeneous shard has specific functionality. Polkadot follows dispersed mining, and each shard functions independently.
The process of sharding does pose a doubt for security. Each shard is interconnected, but each shard network also acts as a separate blockchain. It has become the solution to many latency-related processes and has been widely adopted. The concept of compartmentalizing data is relatively new, in the crypto world and despite a few improvement needs, companies have already put their money into it.
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