Understanding Ethereum Sharding: A Comprehensive Guide

Zebpay
3 min readFeb 10, 2024

Definition of Sharding

Sharding involves dividing the Ethereum network into multiple shards, each functioning as an independent state with its own set of smart contracts. It is a complex scaling solution planned for Ethereum most likely in 2024.

Benefits of Implementing Sharding in Ethereum

Sharding addresses the high gas fees and enhances transaction speed on the Ethereum network. Gas fees, which are required for completing transactions, are reduced by sharding, as it decreases competition for network resources. The aim is to increase the network’s throughput from 15 transactions per second (TPS) to 100,000 TPS, although this number may vary until sharding is fully implemented.

How Sharding Works?

Overview of Database Sharding

Sharding draws inspiration from database management systems, breaking a blockchain network into smaller pieces or shards. Each shard holds unique transactional data and processes transactions in parallel, reducing the computational burden and enabling greater scalability.

Sharding in Ethereum

Previously, all nodes processed every transaction on the Ethereum network, leading to scalability issues. Sharding divides nodes into small groups called shard chains. Transactions on the Ethereum network will be processed through these shard chains, which communicate with each other to validate blocks and reach a consensus. The proposed Ethereum sharding system will consist of 64 linked databases, with each shard having a committee of 128 validators responsible for validation every twelve seconds.

Comparison with Other Scaling Solutions

The Ethereum network employs both off-chain and on-chain scaling solutions. Off-chain solutions, known as L2 or layer two, involve external execution layers. On-chain scaling solutions like sharding make direct adjustments to the blockchain network. Rollups, a type of off-chain solution, process transactions on their execution layer but post the data to the underlying blockchain network. Side chains, which are independent blockchains, can also act as external execution layers. Vitalik Buterin suggests combining rollups and sharding for enhanced scaling gains.

Will Sharding Reduce Gas Fees?

Gas fees are units of measure for calculating transaction fees on a blockchain network. Sharding splits the network into shard chains, which theoretically reduces congestion and increases transaction throughput. This process aims to lower gas fees and, combined with layer two innovations, allows users to experience lower gas fees while utilizing the base security layer.

Scaling Blockchain Using Ethereum Sharding

Blockchain scalability challenges arise from the need for consensus among all nodes on transactions. Sharding eliminates the requirement for nodes to store the entire transaction history, thus increasing efficiency and supporting more users on the network.

Conclusion

While network security is a concern during blockchain upgrades, Ethereum’s protocol addresses potential security issues with sharding. The goal is to create a decentralized, scalable, and secure blockchain network. Sharding has the potential to drive mass adoption and create new opportunities in various industries, such as DeFi and global supply chains, by enhancing network efficiency.

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