What is Sharding and How Does it Work in the Crypto World?

Sharding is a process of horizontal partitioning of data in a database. It is a popular technique used in the crypto world to improve transaction speed and scalability.

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Introduction to sharding

In recent years, scalability has been a big issue for blockchain projects. The Bitcoin network, for example, can only process around 7 transactions per second (TPS). This is not enough to meet the demand of a global currency. The Ethereum network is only slightly better, processing around 15 TPS.

What is sharding?

Sharding is a horizontal partitioning method used to divided a database into smaller, faster, and more manageable parts. In the crypto world, sharding is a scaling solution for blockchains that improves transaction speed and opens up new use cases by increasing network capacity.

In a traditional database, all data is stored in one centralized location. This can lead to performance issues as the database grows in size. Sharding solves this problem by dividing the data into smaller pieces, called shards, and distributing those shards across multiple servers.

Sharding allows blockchain networks to scale horizontally, which means that they can add more nodes to the network without sacrificing speed or security. This is in contrast to vertical scaling, which involves adding more powerful nodes to the network.

One of the benefits of sharding is that it enables blockchains to process more transactions per second (TPS). For example, Ethereum’s current network can process 15 TPS, but with sharding, it could potentially process millions of TPS. This would make Ethereum’s blockchain much more usable for decentralized applications (dApps) and other use cases that require high transaction throughput.

Sharding also has the potential to make blockchains more secure. By distributing data across multiple nodes, sharding makes it harder for attackers to compromise the network.

There are several different types of sharding solutions being developed for blockchain networks. Some of the most popular include state sharding, transaction sharding, and account-based sharding.

State sharding is a type of sharding that splits the blockchain state into multiple shards. The Ethereum team is currently working on a state sharding solution called “Ethereum 2.0” that would increase Ethereum’s scalability by orders of magnitude.

Transaction sharding is another type of sharding that splits transactions into multiple shards based on account nonces (unique numbers associated with each transaction). Zilliqa is a blockchain platform that uses transaction sharding to achieve high transaction throughput while maintaining security and decentralization.

Account-based sharding is a type of shading that creates shards based on account addresses. This type of shading was proposed by Vitalik Buterin, the co-founder of Ethereum, as a way to improve scalability without sacrificing decentralization or security..

How does sharding work?

A full node stores the entire history of a blockchain — every transaction that has ever taken place on that blockchain. This requires a lot of storage space and processing power, which can be expensive.

With sharding, each node only needs to store a small portion of the blockchain (called a “shard”). The shard contains all of the transactions that have taken place on that particular blockchain.

In order for this to work, the nodes must be able to communicate with each other and update their respective shards when new transactions take place. This communication is made possible by something called “cross-shard transactions”.

Cross-shard transactions are essentially like regular transactions, but they involve multiple shards. For example, if someone sends 10 ETH from Shard A to Shard B, the transaction will be recorded on both Shard A and Shard B.

The main advantage of sharding is that it can help improve the scalability of a blockchain. Since each node only needs to store a small portion of the blockchain, more nodes can be added to the network without increasing storage or processing requirements too much.

Sharding can also help improve the security of a blockchain because it makes it harder for attackers to takeover the network. If an attacker wants to take over Shard A, they would need to control more than half of the nodes in that shard. But since there are multiple shards, they would also need to control more than half of the nodes in at least one other shard — which is much harder to do.

The benefits of sharding

By spreading the data and transaction load across multiple machines, sharding can help reduce the strain on any one database. In the cryptocurrency world, this can be especially helpful when there are spikes in transaction volume. Let’s take a closer look at how sharding works and the benefits it can offer.

Increased scalability

Sharding is a process of horizontal partitioning of data in a database. In the crypto world, sharding is seen as a scaling solution that could potentially be used by blockchains to increase their transaction throughput without compromising security or decentralization.

The idea behind sharding is to split the total state and history of the blockchain into multiple pieces called shards. Each shard would then be able to process transactions in parallel, potentially increasing the scalability of the blockchain.

One of the key challenges with sharding is ensuring that the different shards remain in sync with each other. If one shard were to become compromised, it could potentially disrupt the entire network.

Another challenge is that sharding can introduce new security risks, as it would be possible for an attacker to target a specific shard in order to disrupting the network.

Despite these challenges, sharding remains a promising scaling solution for blockchains and could potentially allow them to support thousands of transactions per second without compromising security or decentralization.

Improved performance

Sharding is a type of database partitioning that separates very large databases into smaller, more manageable parts called shards. Each shard is then stored on a separate database server, allowing the workload to be distributed and scale horizontally.

One of the main benefits of sharding is improved performance. By spreading the data and workload across multiple servers, sharding can greatly increase the speed and efficiency of database operations.

In addition to improved performance, sharding can also provide other benefits such as increased security, improved scalability, and reduced costs.

Sharding is a popular technique in the crypto world as it can help improve the performance of blockchain applications. For example, Ethereum’s upcoming upgrade to ETH 2.0 will include sharding as a way to improve scalability.

Reduced costs

Sharding can reduce the costs associated with validating and storing transactions on a blockchain. For example, if the cost of validating and storing a single transaction is $0.01, then 10,000 transactions would cost $100 to store on a blockchain. With sharding, these 10,000 transactions could be split into 100 shards, each of which would only need to store 100 transactions. This would reduce the cost of storing the entire dataset to $1.

Sharding can also help reduce the resource requirements for running a node. For example, a full node on the Bitcoin network currently needs to download and verify around 200 gigabytes of data. This is a significant barrier to entry for many potential users. However, if Bitcoin was sharded into 1,000 shards, each node would only need to download and verify around 200 megabytes of data. This would make it much easier for people to run full nodes and participate in the network.

Sharding can also improve the scalability of a blockchain network. For example, if each shard can process 10 transactions per second (tps), then a blockchain with 1,000 shards could theoretically process up to 10,000 tps.

The challenges of sharding

In computer programming, sharding is a type of database partitioning that separates very large databases the into smaller, faster, more easily managed parts called data shards. The main objective of sharding is to improve performance and increase scalability. In the crypto world, sharding is used to improve the efficiency of blockchain networks. However, there are some challenges that need to be addressed.


When it comes to blockchain technology, one of the most frequently used terms is “sharding”. It is a type of distributed ledger technology that enables horizontal scaling of databases. In other words, it allows a blockchain network to be partitioned into multiple smaller sub-networks (called shards), each of which processes transactions in parallel.

One of the main challenges with sharding is implementation. In order for a blockchain network to be partitioned into shards, each node in the network must be aware of the other nodes in its shard as well as the set of validators for that shard. This can be a difficult and time-consuming process, particularly for large networks.

Another challenge with sharding is that it can lead to increased centralization if not properly implemented. For example, if all the nodes in a shard are located in the same geographic region, then that shard is susceptible to censorship or being taken offline by a government or other entity.

Finally, sharding can also make it more difficult to achieve consensus on the state of the ledger. This is because each shard maintains its own view of the ledger and there is no guarantee that all shards will arrive at the same consensus state at the same time. This can lead to delays in confirmations and/or forks in the chain.

Despite these challenges, sharding is still considered to be one of the most promising scaling solutions for blockchain networks. With proper implementation, it has the potential to enable horizontal scaling while still maintaining decentralization and security.


Sharding is a process of horizontal partitioning of data in a database. In traditional databases, all data is stored in a single file or table. This can lead to performance issues as the database size grows. With sharding, data is divided into multiple smaller tables, each residing on a different server. This allows the system to scale more easily and handle more traffic.

Sharding comes with its own set of challenges, though. First, it can be difficult to maintain data consistency across the different shards. Second, if one of the servers go down, the entire system may be unavailable. And third, sharding adds complexity to the system, which can make it more difficult to manage.


While sharding is a relatively new concept in the world of cryptocurrency, it shows a lot of promise as a way to improve the scalability of blockchain networks. By breaking up transactions into smaller pieces and processing them in parallel, sharding has the potential to greatly increase the speed and efficiency of cryptocurrency transactions. However, sharding is not without its challenges, and it remains to be seen whether it will be able to live up to its potential in the long run.

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