What is Sharding in Ethereum?

Sharding is the process of distributing data across multiple computers in a database cluster to create a system that can self-manage and scale. This article focuses on discussing sharding in Ethereum. The following topics will be discussed here:

1. What is Sharding?
2. Features of Sharding
3. Why Does Ethereum Need Sharding?
4. When Will Sharding Go Live On Ethereum?
5. Is Sharding Secure?
6. Challenges To Sharding

Let’s discuss these topics in detail.

What is Sharding? 

Sharding involves identifying which parts of the database are too much for one computer to handle and which will be done best by using multiple computers. 

• Sharding is actually very similar to partitioning, except that it’s used on systems where data doesn’t have one central location but rather can be spread out over many machines depending on its complexity.
• The word “sharding” is derived from “dividing”. In a blockchain, sharding refers to the process of dividing the network into smaller blockchains. The nodes within each individual blockchain are identical and hence, operate in a similar fashion.
• Combined with other techniques such as pruning, sharding results in the blockchain handling more transactions at higher speeds while also reducing storage requirements. 
• It also makes it possible for nodes to only process transactions that pertain to their area of interest (e.g., if you want updates about Bitcoin Cash instead of Bitcoin). This greatly increases security and avoids overloading any single node with information that is irrelevant to it.

Features of Sharding

• In a nutshell, when blockchains are running out of capacity they can implement “sharding”. Essentially this is a method where nodes (computers) share the load of mining and verifying transactions across shards – or subsets – so that the system supports more activity with less demand on each node. This allows transactions to confirm faster, which reduces latency and unwanted bloat.
• Sharding allows for a blockchain to be divided up into smaller groups with each group associated with a specific purpose.
• Each blockchain can have its own shard, which can also be replicated on multiple nodes.
• It is easier and cheaper to maintain decentralization while scaling up the number of transactions.
• Maintaining data consistency across the system becomes more easily attainable: by grouping transactions into separate chains, the probability that one chain will interfere with another is minimized. The result is that there is no possibility of systemic risk as it relates to transaction accountability.

Why Does Ethereum Need Sharding?

The Ethereum network is processing a lot of transactions. In the future, Bitcoin will have to process around 10 million transactions per day to remain relevant. One of the solutions for Ethereum to cope with this is to use sharding.

Sharding could allow for significantly lower transaction fees and faster confirmation times in the future by splitting up the blockchain into multiple “shards” that are each capable of processing just one or two transactions per second, dramatically lowering the load on mainnet and freeing it up for more important tasks such as smart contract development.

When Will Sharding Go Live On Ethereum?

•  Sharding is currently in the research phase, and a concrete date has yet to be decided upon. 
• Developers have said that sharding is at least two years out, but for now, it remains one of the biggest priorities for Ethereum.

Is Sharding Secure?

⨀ Cross-shard attacks are a major threat, where a malicious actor could potentially target multiple shards and harm the overall network.

⨀ For this reason, security is a major priority for sharding development. There are multiple protocols being developed to ensure that transaction data cannot be accessed by undesired parties.

Potential Solutions to make Sharding secure:

⨀ The most common solution so far is the off-chain proposal. Most transactions are performed on a private chain, and only periodically “close” their state on the public Ethereum chain. This is primarily done via an update to Ethereum’s signature algorithm called zk-SNARKs which allows for transactions on a private chain without revealing their content.

⨀ Sharding via secret contracts is a new approach that improves upon current efforts and allows for sharding much more quickly.

Conclusion:

⨀ This technology has the potential to transform businesses and major industries in order to make them more efficient by creating shared value networks that are accountable for their decisions. It also allows for arbitrage opportunities. The ability to quickly settle transactions between different parties in such networks leads to lower costs and higher profits for everyone involved as fewer intermediaries are required.

⨀ If one shared database was targeted by hackers, they would have to attack every single node in the network to get the data they wanted.

It’s the most famous and biggest concern in the Cryptocurrency community. The scalability problem is one that plagues many blockchain networks today. This challenge has given rise to new technologies such as sharding which have been proposed as a solution to solve this problem. Blockchain networks are secure yet very inefficient due to the high computation costs that have led people to call them “expensive” compared to centralized databases. With hundreds or even thousands of nodes that need to verify and confirm transactions, it is no surprise that scaling it will be costly, especially on emerging technology, which the blockchain currently is.