What is Ethereum Sharding? Its Function And Challenges

What is Ethereum Sharding? Its Function And Challenges

Ethereum News
March 6, 2023 by Diana Ambolis
1959
Since its start in 2009, blockchain technology has changed a lot. Satoshi Nakamoto then created Bitcoin (BTC) as an alternative to centralised financial systems. The goal was to come up with a safe and clear solution. Bitcoin did this with the help of distributed ledger technology (DLT) and blockchain technology, which let the network come
What is Ethereum Sharding? Its Function And Challenges

Since its start in 2009, blockchain technology has changed a lot. Satoshi Nakamoto then created Bitcoin (BTC) as an alternative to centralised financial systems. The goal was to come up with a safe and clear solution. Bitcoin did this with the help of distributed ledger technology (DLT) and blockchain technology, which let the network come to an agreement without a central authority. But this also meant that as the network got more users and transactions, it got slower and harder to expand.

The Ethereum network has fixed Bitcoin’s main problem through a series of development updates: its inability to grow. One of the most important changes to the network is that it has switched from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) consensus mechanism, which is similar to Bitcoin’s.

This upgrade, called “the Merge,” successfully combined Ethereum’s old execution layer with its new PoS consensus layer, making the switch from “proof of work” to “proof of stake.” The Merge has cut Ethereum’s energy use by 99.5%, fixing one of the biggest problems with PoW-based blockchains for a long time.

But Ethereum’s efforts to scale don’t end there. The network is currently getting updated so that sharding, a process that will increase the speed and size of transactions, can be added. But what is sharding in the context of blockchain technology and, more specifically, Ethereum?

What is “sharding” of a database?

The idea of “sharding” comes from database management systems from the 1980s. In fact, SHARD was an acronym for a database product from the 1980s called System for Highly Available Replicated Data.

By chance, the word “shard” can also mean “a small piece of something bigger.” Sharding in blockchain technology aims to break up a blockchain network into smaller pieces called shards that are easier to manage. Each shard has its unique subset of transactional data and processes transactions simultaneously on the network.

By splitting a blockchain network into multiple shards, transactions can be processed in parallel, latency can be reduced, and the network can handle more users. The network doesn’t have to do as much work, so it can handle more transactions in the same amount of time.

Ethereum sharding will also help fix one of its biggest problems: the high gas fees on the network. Gas is the name for the fee that a transaction on the Ethereum network must pay. By sharding, there would be less competition for network resources, which would lower the overall cost of gas.

Currently, Ethereum can handle about 13 transactions per second (TPS). With sharding, the goal is for Ethereum to have a throughput of up to 100,000 TPS. Until sharding is fully put into place on the network, the actual number may change, but it’s still a big step up from how fast the network is now.

Also, read – Your Complete Guide To The Technology Behind Bitcoin Blockchain

How does Ethereum sharding work?

Before you can understand sharding, you need to know how nodes on a blockchain network work. Nodes are the computers in a blockchain network that store and share information about transactions. They do this to keep the network going.

With Ethereum’s current PoW consensus system, every node on the network processes every single transaction. This can make it hard for the network to grow as more and more transactions are added.

During sharding, the network’s nodes are split into groups called “shard chains.” Each shard chain is in charge of processing a part of the network’s transactions. These shard chains talk to each other to come to an agreement and verify blocks of transactional data.

In Ethereum, however, there will be shard “blobs” instead of shard chains because of danksharding, which is a newer way of sharding. The sharded system for Ethereum will be made up of 64 linked databases, and every shard will process transactions at the same time and in parallel. There will be 128 validators on each “committee” for each shard. Every 12 seconds, it will be up to these committees to propose new blocks and make sure they are valid.

 

Why is it important to shard a blockchain?

Besides making it easier for a blockchain to grow, sharding also has important effects on how decentralised it is. Sharding makes it possible for more nodes to join the network and process transactions. This makes the network less centralised and gives power to more people. A highly decentralised network doesn’t have a single point of failure, so this could also make it safer.

But sharding also makes decentralisation harder in some ways. Since nodes on a sharded network are split into smaller groups, there is a greater chance that they will work together and become more centralised.

This is where the danksharding solution for Ethereum comes in. It lets the committee members be more random and different, lessening these possible centralisation concerns.

Danksharding will make it possible for Ethereum to check a lot of data by taking samples from a small number of nodes. This will reduce the chance that data has been changed.

Overall, sharding is an important step for blockchain technology to take if it wants to be used by a large number of people and solve scaling problems. Even though it has its own problems, it can help a blockchain network run better and be less centralised if it’s done right.

What is Ethereum sharding?

Ethereum sharding will work with layer-2 rollups, or smart contracts, that process and store transaction data off-chain and are on the mainnet. So, sharding will take care of processing transactions, and rollups will store state data. This will make it easier for Ethereum to grow both on-chain and off-chain.

Even though there is no set date for when sharding will be fully implemented on Ethereum, the Ethereum community has talked about sharding shipping in 2023, and this has been posted on the Ethereum site. The Ethereum team says that plans for sharding are not yet complete, and they are still looking for ways to make sharding as efficient as possible. As was already said, danksharding is one of the top candidates right now. Most people seem to agree that early shard chains will be used to add more data to the network and not yet to handle smart contracts and transactions. Together with rollups, this is expected to give the ability to scale a big boost.

More specifically, rollups will let decentralised applications (DApps) group transactions into one, store them off-chain, and make cryptographic proof to send to the blockchain. When used together with shards, which make more data available, these two methods may make 100,000 TPS possible.

In the long run, the goal is to make Ethereum’s shards very useful. Because of this, they might be able to store and run code in the future and handle transactions. This would mean that each shard would need to have its own set of account balances and smart contracts. To make transactions between shards possible, cross-shard communication would be needed.

As we’ve talked about, though, nothing is set in stone yet, and the Ethereum community is still debating and researching these extra features. Even so, the first option is to get rid of the idea of state execution altogether. In this case, shards won’t deal with smart contracts; they’ll be places to store data.

The second choice is to find a middle ground by making some shards “smarter.” This means that a few execution shards will get new features while the rest will keep running as usual. Another option is to stop talking about how shards work and wait until zero-knowledge snarks are put into place.

Zero-knowledge SNARKs are a type of cryptographic proof that verifies the existence of transactions without revealing any information about them. This could solve the problem of cross-shard communication because zk-SNARKs could make it possible to check transfers between shards without revealing any sensitive information.

Overall, sharding has a lot of potential for Ethereum and the blockchain industry as a whole, but it also has some problems that need to be fixed before it can be used everywhere. But sharding can help the Ethereum network run better and become less centralised if it’s done right. Some of the things about sharding on Ethereum that are unique to the network:

Decentralized operation of nodes

On a split Ethereum, anyone can run a node. Scaling Ethereum doesn’t happen by making the database bigger, which can lead to centralization. Instead, scaling happens by splitting the database into smaller pieces.

On a scaled network with a database that keeps getting bigger, network validators would have to keep up with the technical needs of the network. Some of these are expensive computers, high electricity bills, cooling systems, and the cost of keeping them in good shape.

A system like this could unintentionally lead to centralization, making it hard for new people to join. Sharding, on the other hand, wouldn’t require validators to store all of a network’s state data on their computers. Instead, data techniques (like zero-knowledge Rollups) can be used to determine if the data has been available on the network.

More people taking part

One of the long-term benefits of Ethereum sharding is that more people will use it. The goal is to get to a point where people can run Ethereum on a laptop or mobile phone because the network will be able to grow in a safe and manageable way. In an ideal world, running clients (the software needed to interact with the Ethereum network and see its data) will become much easier to use, which will bring in a larger community of users from all over the world. This goes back to security and decentralisation since an attack or failure is much less likely in a network with less central control.

Better performance and use of resources

Sharding will make Ethereum faster and more useful because transactions won’t have to be processed on just one chain. It is thought that sharding could lead to a rise in the number of transactions on the network per second by. It will grow by orders of magnitude, making it more competitive with payment systems like Visa and PayPal, which can handle thousands of transactions per second.

How safe is sharding?

Security is, of course, one of the most important things to think about when upgrading a network. Sharding breaks Ethereum up into smaller networks, which may worry some people. Cross-shard attacks could be a problem. If someone did something bad, they could target more than one shard and hurt the network as a whole.

But Ethereum’s protocol has been made with ways to deal with these worries, such as random sampling for validators and ways to stop invalid state transitions and dependencies on the order of transactions. The Ethereum Foundation and the rest of the community are also always looking for and making solutions to problems that might come up with sharding. The end goal is to make a safe, scalable, and decentralised network for everyone.

Sharding technology on Ethereum can change businesses and industries by making it easier for many people to use it and by opening up new ways to use blockchain technology. Shared value networks, global supply chains, and decentralised finance are just a few ways to improve efficiency and open up new opportunities.