Sharding is a process that splits the network into several shards, each taking a portion of the smart contracts, transactions, and other applications. Typically, as the number of nodes joining the network increases, the efficiency of the network decreases since the ledger of all transactions is stored on every node, and the number of transactions increases. This process helps to improve the scalability of the blockchain by easing the strain on the main network. Additionally, the transactions per second could increase dramatically while also reducing the gas fees required for transactions and other applications.
One of the key aspects of blockchains is that all the nodes hold all the data, but with sharding, users hold only a portion of the data, considerably reducing the amount of data stored by each node. This is done by splitting the blockchain data among different nodes, thereby allowing different nodes to process transactions simultaneously. With more shards, more transactions can be processed at a time.
There are a few key aspects of sharding:
- Decentralization: Compared to other scaling mechanisms, this mechanism allows the system to scale while still being decentralized, as it doesn’t favor any group and maintains power with the single nodes.
- Participation: Because sharding reduces the amount of data nodes have to store, it allows more people to take part in the blockchain. This increased participation also leads to more decentralization as computing power move
- Efficiency and Performance: The transactions per second will increase substantially as transactions can now be processed in parallel. This higher TPS will also lead to a reduction in gas fees.
Part 2 will discuss the hurdles of Sharding and more on Ethereum Sharding.
If you want to learn more, check out the links below:
Sharding: What it is and why many blockchain protocols rely on it
Ethereum Sharding 101: What Is It & How It Works?
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