What is Sharding and How is it Helping Blockchain Protocols?

Introduction

With blockchain technology becoming increasingly popular, it is necessary to find solutions that can resolve scalability issues while maintaining the security and decentralization of these systems.

Cryptocurrencies like bitcoin and Ether from Ethereum have scalability problems that are already identified. A distributed ledger needs to find a way to increase scalability and efficiency and identify latency issues if it wants to be implemented by financial technology (FinTech) companies and compete with payment networks hundreds of times faster.

Sharding, or dividing the blockchain into smaller, more manageable pieces, has become a promising method for scaling open blockchains.

What is Sharding?

The concept of sharding is essential because it enables the system to store data in various resources according to the sharding process. The definition of “shard” is “a small component of a whole.” Sharding thus refers to dividing a more significant proportion into smaller pieces. Such shards are not just smaller but also faster, making them easier to manage.

Need for Sharding

Consider a reasonably large database that has yet to be sharded. Consider taking a database of a college, for instance, where all of the student records (past and present) for the entire college are kept in one database. Therefore, it would contain a massive amount of data—say, let’s 100,000 records. Now, each time we need to find a student from this database, it takes approximately 100,000 transactions, which is very, very expensive.

Now imagine that the same college students’ records were broken into more manageable data shards per year. Only 1000–5000 student records will be present in each data shard. As a result, not only did the database become much easier to manage, but sharding also significantly decreased the cost of each transaction. This example explains why sharding is necessary.

Understanding Blockchain Sharding

The extensive use of the technology, which consists of supply chain management and financial transactions, has increased interest in blockchain networks and the relating cryptocurrencies. 

The amount of work and transactions that need to be handled by the network increase along with the popularity of blockchain. Sharding can be helpful if we imagine a blockchain as a shared database where the more data is added, the network should find new ways to process all that quickly and efficiently.

Distributed Ledger

The blockchain’s distributed ledger, which enables transactions to be shared consensually across numerous sites and regions, makes it so attractive. In a short period after a transaction is recorded, copies are transmitted to the shared network, providing public “witnesses.” 

Since everyone on the shared network keeps a copy of the ledger’s transaction data, if one area of the network seems to be the target of fraud or a malicious attack, the other network members can figure out what was modified. Therefore, blockchain technology and its distributed ledger system can help prevent fraud and the damages caused by cyberattacks like hacks.

Scalability

However, one of the main issues with blockchain technology is that as too many computers are connected to the network and much more transactions are processed, the system can get clogged and slow down the process (known as latency). Due to its high latency compared to the present-day electronic payment systems, which operate quickly and effectively, blockchain adoption is currently at risk. In other words, as more and more companies adopt the technology, scaling is a challenging task for blockchain because the networks might need to be more capable of dealing with the increased numbers of data and transaction flow. The sharding procedure is one of the initiatives to achieve latency-free scalability. The blockchain may experience less latency and be able to process more transactions thanks to sharding, which is designed to distribute a network’s workload throughout all partitions.

How does Sharding Work

Sharding divides a blockchain into numerous pieces, or shards, and stores them in various locations. The computational load on each computer can be significantly reduced by storing the data across multiple devices. This enables the network to process a higher volume of transactions significantly faster.

 A typical peer-to-peer (or P2P) network, such as a blockchain, consists of multiple full nodes (or computers), each of which records copies of the complete chain’s history. Sharding allows nodes to work correctly without being required to keep all that data simultaneously.

Let’s take a deeper look at how sharding works.

Sharding divides a reasonably large database of the same kind into several databases. It is possible to use sharding at the application or database level because this results in an algorithm that could be more readily generalized. We are all aware that a blockchain is made up of nodes, and in this case, each node is an essential component of the ecosystem that contributes blocks to the blockchain by sharing its computational resources. For instance, the blockchain network of Ethereum has over 8,200 active nodes that maintain the network’s good conditions.

The linear execution model, used by Ethereum and several other blockchains, requires each node to process each operation. However, sharding can help in this situation. Sharding allows a parallel execution model for transaction processing within a given blockchain. This implies that transactions will be processed concurrently and in parallel on each shard, resulting in a higher network throughput. Likewise, following sharding, network nodes will only process a limited number of operations rather than all of them as they did in the linear model. It is also worth noting that sharding is also known as horizontal partitioning. The term horizontal describes the traditional database layout.

In this, the rows of one table are divided into different tables, also known as partitions. Each partition has the same schema and columns, but each table’s rows are entirely different, so the data stored in each is distinct from the data stored in the other partitions.

Note that a database can be divided vertically, which involves creating a logical division within an application’s data, or horizontally, which involves distributing the same database’s rows across multiple nodes and storing different data in separate databases. And it’s frequently done at the application level, using a piece of code to route commands to a particular database.

How Sharding is Implemented

Sharding is most commonly performed on proof-of-stake (or PoS) networks rather than proof-of-work (POW) networks. Nodes validate transactions in the PoS consensus mechanism based on the number of tokens staked. Sharding would involve stakers working with various shards of the identical blockchain and, as a result, processing a network transaction. 

However, while this may sound simple in PoS, it is not the case in PoW; implementing sharding on proof-of-work (or PoW) networks is extremely difficult. Why? Because network nodes find it challenging to validate transactions using only data from a single shard and not the entire network when it comes to Proof of work, the most prevalent type of node you’ll find is a full node. A full node stores a copy of the blockchain’s entire history on itself.

For more extensive networks such as Bitcoin and Ethereum, this requires a lot of memory and computing power which may not be possible during the scaling stage and can be challenging to manage. With sharding, this problem is mainly solved because full nodes no longer would have to store or process the entire network’s activities. Instead, each node only needs to keep data related to its shard, but how will the other nodes know that a transaction has occurred? The answer is shard sharing, which is a process by which the information of a shard is shared with other nodes. This maintains the network’s security and decentralization because all participants can still see the ledger entries. Still, they are optional to store and process everything up next.

Features of Sharding

• Sharding reduces the size of the database.

• Sharding speeds up the database.

• Sharding simplifies database management.

• Sharding can occasionally be a complex operation.
• Sharding lowers the database’s transaction costs.

• Each shard independently reads and writes data.

• Auto-sharding is available in many NoSQL databases.

• The failure of one shard has no impact on the data processing of the remaining shards.

Why is Sharding Important

Since all nodes must agree on a transaction’s legitimacy before it can be processed, blockchain networks can only process a certain number of transactions simultaneously.

Generally, each blockchain node will store the entire blockchain’s history and process every transaction. As a result, blockchain networks like Ethereum and Bitcoin can be regarded as “decentralized.”

Data Compression

It is much more challenging for hostile actors to hold control over the network and potentially reverse or modify transactions because every node in the network has a copy of the complete history of the network. But scaling the technology means sacrificing decentralization and security in the blockchain.

With the help of sharded blockchains, nodes can avoid downloading the entire blockchain’s history or verifying each transaction that moves through the network. As a result, the network operates more effectively, and blockchains can expand to support more users.

Increased Scalability

Increased blockchain scalability is the main benefit of applying sharding to it. Sharding allows a blockchain to connect nodes and store more data without noticeably halting transaction times.

This may speed up the adoption of blockchain technology across several sectors, not the least among them being the financial sector. If transactions can be completed more quickly, fintech companies may find competing with centralized payment solutions simpler.

Better Accessibility

Sharding may also lead to greater network involvement and better user accessibility. Ethereum’s sharding is expected to lower the hardware needed to run a client, allowing it to do so on a user’s device, like a personal computer or mobile phone. More people will thus have the chance to take part in the network.

Is Sharding Secure?

It’s important to note that sharding in blockchain networks is only in the early testing stages. Sharding may not always provide benefits, and it could even be dangerous at times.

Shard Collision

A shard collision happens when two distinct shards are given the same shard key, which is used to identify which shard should hold a specific piece of data. As a result, data may be stored in the correct shard, producing reliable or valid theories. Shard collisions can also result in data loss or corruption in some cases.

Shard Corruption

Shard corruption describes the possibility of a shard becoming damaged or otherwise unusable due to hardware malfunctions, software bugs, or other problems. This could lead to incorrect or misleading results because the data kept in the affected shard might be lost or inaccessible. In some cases, shard corruption can spread to other shards, causing the entire system to fail.

Is Sharding Necessary?

Sharding does not always require. Those with trouble scaling up are the only networks likely to think of sharding. Additionally, sharding is generally avoided only as a last desperate measure if developers can find a different approach because its introduction can complicate the application even more.

What is Alternate to Sharding in Blockchain?

One other scaling method that has recently gained popularity is layer-2s.

A layer-2 solution controls transaction processing off-chain, apart from the ledger’s base layer. This may shorten transaction times and significantly reduce fees.

The Lightning network of Bitcoin is an example of a layer-2 solution. Here, Lightning enables instant transactions at a pennies-per-transaction cost. 

Another example is the Ethereum network’s Polygon (or MATIC) cryptocurrency. In a nutshell, Polygon serves the same purpose for Ethereum as Lightning does for Bitcoin.

Other options for addressing the blockchain scalability issue include purchasing a more expensive and powerful computer or adding more caches or database replicas to the system, but consider that these are typically used for applications that are restricted by read performance.

Pros and Cons of Sharding

Concluding remarks

Blockchain sharding is a novel strategy that has the potential to alter how blockchain networks function and grow entirely. The implementation of sharding in practical applications, like the Ethereum Beacon Chain, provides strong justification for the growth of sharding-related projects in the future.

However, it is still a relatively new idea, and many technical and security challenges must be solved before it can be widely adopted. Nonetheless, with the introduction of sharding, the future of blockchain technology appears promising, and we can expect to see its continued growth and application in the coming years.

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