Popular networks like Ethereum and Bitcoin are limited to fewer than 20 transactions per second - nowhere near the transactional demands of mainstream finance and commerce. This leads to network congestion, spiraling fees, and questions of whether blockchain can truly power global-scale applications.
Enter sharding. This technique offers a leading solution to blockchain's scaling trilemma by partitioning networks into parallel subsections that can handle transactions concurrently. Shards significantly expand throughput capacity to possibly exceed the processing speed of traditional payment rails.
The Scalability Bottlenecks Throttling Blockchain Adoption
Public blockchains face acute technical constraints around scaling transaction volume. Issues include:
Transaction Speed Limits
- Bitcoin's theoretical limit is ~7 transactions per second (TPS)
- Ethereum caps out at 15 TPS before upgrades
- Compare to Visa's capacity for 65,000 TPS!
Network Congestion
- Bottlenecks and clogged throughput as demand grows
- Leads to long confirmation times for transactions
Soaring Fees
- Scalpers exploit congestion charging +$50 transaction fees
- Pricing out smaller users and use cases
These deficiencies have curtailed mainstream adoption of blockchain across finance, gaming, metaverses, and Web 3.0.
Introducing Database Sharding
For decades databases have leveraged a technique called sharding to enhance system performance. In basic terms, sharding involves horizontally partitioning to spread data across multiple servers.
Each database server (a "shard") only needs to process a subset of the overall data, enabling parallelization and greatly improved speed.
So how can we apply database sharding principles to scale blockchains?
Shard Chains: Partitioning the Blockchain State
A sharded blockchain divides its network into separate partitions called "shards". Each shard chain acts as an independent subdomain that handles its own transactions and computational load.
This subdivision of labor unlocks vast parallel processing power for global networks. Some key capabilities unlocked by shard chains include:
Parallel Transaction Processing
- Allows thousands of transactions per second
- Removes computational bottlenecks
Increased Throughput
- Expands total workload handled by chain
- Reduces individual shard loads
Fast Confirmations
- Transactions confirm rapidly within shards
- Time-critical dApps and payments feasible