What Is Sharding In Crypto?

June 10, 2022

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Lack of scalability has been an issue in the cryptocurrency industry, especially among large blockchain networks. Surprisingly, adding more computers to the peer-to-peer network further degrades the whole system’s efficiency. So, what can cryptocurrencies adopt to boost scalability and address latency issues?

While there have been numerous concepts, technologies, and solutions aimed at helping blockchains scale, sharding promises to be the ultimate solution to the problem of scaling blockchain networks. At its core, sharding is the technique of partitioning a large blockchain database into multiple databases of the same type with the aim of scaling the platform so it can accommodate many more users.

This post will comprehensively cover sharding in crypto, emphasizing how it can help improve their scalability and efficiency.

What is sharding?

A multiphase upgrade to improve crypto scalability, sharding is a way of partitioning a blockchain network into smaller partitions known as shards. The process helps spread out the computational and storage workload across the peer-to-peer network, allowing the network to effectively process more transactions per unit of time.

Typically, blockchain networks comprise multiple full nodes, where each node records copies of the entire blockchain’s history. For any piece of information to be recorded in a ledger, all the nodes within the network must agree on it. Keeping the entire network’s transactional load in multiple nodes helps ensure that the data cannot be corrupted, which guarantees decentralization.

Sharding promises to help reduce congestion by partitioning the network such that not every node will process and store all data related to the entire network’s transactions. Instead, this technique focuses on relieving the nodes, so each node (computer) only maintains information related to its shard (or partition). By relieving nodes of some computational burden, sharding helps increase transactions per second. Most interestingly, sharding does not compromise the network’s privacy and security.

How does sharding work?

Sharding is considered a viable solution to the latency and scalability issues facing blockchain networks. However, in reality, it is harder than it sounds. For instance, after partitioning a network, each shard should be able to know the data coming from all other shards; otherwise, it can be tricked, which can lead to serious threats. So, how does this fascinating technology work?

In the world of cryptocurrencies, sharding occurs when network nodes are divided into shards, and the data stored in the network is split to be stored in the partitions based on their unique characteristics. The process primarily involves splitting the network database horizontally and assigning each partition a specific function. Unlike typical nodes, which store all network’s transactional load, shards store data with certain characteristics or specific types of information.

Notably, sharding needs to be done such that all shards can functionally communicate with each other. This helps maintain security and decentralization, key aspects of blockchain technology. The integration ensures that shards process and store the information their functions require while making the information readily available to other shards when needed.

Precisely, shard sharing allows blockchain network users to access all the information stored in the blockchain, meaning splitting a blockchain does not result in any change in protocol.

Sharding can be implemented in blockchain databases to reduce the burden placed upon nodes, thus, allowing the system to function efficiently without the need to beef up network bandwidth, computing power, and storage.

Advantages of implementing sharding

Sharding is designed to spread out the workload of networks to allow for lots of parallel transactions to happen simultaneously. Here are the benefits a blockchain company can get for implementing sharding:

  • Improved scalability: Sharding not only allows for parallel transactions but also helps ensure transactions are processed and validated faster. Reducing transaction processing time means that the networks will process more transactions every second.
  • Better accessibility and participation: With the implementation of sharding, lower hardware will be required to run a client, which will allow users to accomplish virtually anything, it will ensure accessibility, and more people will participate in the network.

Sharding seems helpful, especially for blockchain projects with considerably large networks. However, not with a few concerns.

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Sharding and security

There have been concerns about whether or not the implementation of sharding will affect the security of blockchain users. Well, while each shard works separately to process and store data specific to its functions, guarding against shard takeovers is needed to sustain blockchain’s security.

Shards could be corrupted, which can lead to permanent loss of the associated portion of data. Thankfully, sharding does not cause any change in the consensus protocol. Because individual shards use the consensus protocol and mechanisms utilized within the entire network, the network’s complete (unpartitioned) nodes will download, combine, and store the transactional load. As such, when sharding is implemented, enough nodes can be maintained to ensure the system’s security properties while giving it the ability to process more transactions per second.

On the other hand, random sampling can help address the issue of individual shards being attacked. With random sampling, nodes are randomly assigned to a shard and again reassigned to other randomly chosen shards at random times. This trick makes it hard for an attacker to predict the shard that will be assigned to which node.

With the right measures, sharding can address scalability and keep pace with blockchain’s security and decentralization. This can go a long way to ensuring that a blockchain functions effectively and faster.

Overall, it is safe to say that sharding is secure. However, this is only true when the right measures are put in place to prevent possible malicious activity.

Where is sharding being used?

Sharding is still under development, and its developers are studying how they can effectively implement it in networks. Other cryptocurrencies have been quick to adopt the technique and have already implemented it on their blockchains.

Sharding of Ethereum is arguably the prominent use case of sharding in the crypto world. The implementation of sharding on Ethereum, the second-largest cryptocurrency, is part of its Ethereum 2.0 upgrade and is set to appear in 2023. When implemented, the technique will provide this long-standing cryptocurrency with more capacity to store and access data.

As Ethereum (ETH) anticipates showcasing the power of sharding, some blockchains have already adopted this impressive technique. Zilliqa is one of the truly scalable cryptocurrencies, thanks to the implementation of sharding. Currently, it deploys four blockchain shards, where all the transactions are validated by the nodes within one of their shards. Zilliqa’s blockchain shards are capable of processing transactions in parallel and are constantly making it more competitive.

Polkadot (DOT) is yet another blockchain network using the sharding technique to enhance scalability. The blockchain uses heterogeneous shards, where the shards are ordered around the main network and have a state-transition function specific to the use case.


Sharding is progressively becoming a major subject for discussion around cryptocurrencies, especially where improving scalability is a major concern. At its core, the technique involves splitting a network database into portions called shards intending to spread out the network’s functions like computational and storage workload. When done correctly, sharding can help ensure a lot more transactions are completed in a second as it allows for parallel processing of information.