The crypto world has changed dramatically since its initial inception in these last 11 years. From humble beginnings of Bitcoin being the only cryptocurrency, to over 2,000 cryptocurrencies and growing and has now risen to over $300 Billion in market cap.
As cryptocurrencies began disrupting the finance world however, the blockchain technology that crypto is built on, encountered a challenge that it wasn’t anticipating, scalability issues. The technology is currently limited to the number of transactions it can process every second, which hinders its progress. The solution though could potentially be right around the corner, called “Sharding”.
What is Sharding?
Sharding, in essence, is the process of dividing up the workload into smaller groups so that the workload can be processed a lot faster and efficiently.
The term sharding refers to the process of partitioning the nodes on a blockchain network into smaller groups also knows as “shards” and giving each group in the network dedicated roles.
Through organizing the nodes into smaller groups, the blockchain can streamline the verification process as it only needs a select group of nodes to verify a specific transaction block and not the entire network, as done currently, which creates a bottleneck effect.
How Sharding can Solve Current Blockchain Challenges
Currently, the Ethereum blockchain can process about 10-20 transactions per second (TPS) whilst standard credit-card TPS numbers are a lot higher than that.
The issue is that regardless of how many more nodes you add to a network it does not increase your TPS, as every transaction needs to be verified by the entire network.
With blockchain sharding, you can theoretically break up the network into 50 smaller shards running simultaneously, which would increase your total TPS by 50 times. It would mean that the blockchain can make exponentially more transactions than currently possible, even theoretically overtaking current card-based payment systems.
The Future of Sharding
Sharding is relatively a new concept for blockchain technology however, there is no doubt that the implementation of sharding will unlock even further possibilities of cryptocurrencies and take blockchain technology to new heights.
There have been a few projects that have incorporated sharding in their blockchains, such as Shard Coin’s coin and most recently Zilliqas’s blockchain technology platform, which is looking to progress the technology.
Social Media giant Facebook, recently brought blockchain technology back into the spotlight with the announcement of their new Cryptocurrency Libra, which will incorporating elements of blockchain sharding into it. Facebook also made an initial move to spearhead this space when they purchased the blockchain sharding tech company Chainspace.
Sources: coinmarketcap.com, etherscan.io, forkast.news, coindesk.com