What is Sharding in Crypto?

What is Sharding? – Sharding involves dividing blockchains into smaller, separate blockchains to handle specific data segments. This helps distribute the workload across multiple chains instead of relying on one chain for all transactions and interactions. Each separate blockchain is called a shard and has its own ledger.

Shards have the ability to handle their own transactions, while a beacon blockchain or main chain oversees the communication between shards. It’s a Layer 1 network scalability enhancement, as it modifies the mainnet of a blockchain. By implementing shards, the scalability of the network significantly improves compared to using a single network. Ethereum’s developers are incorporating sharding into the upgrade process of Ethereum to create a scalable Proof of Stake network.

Ethereum will have a Beacon Chain overseeing 64 separate shards. The current Proof of Work chain will combine with the Proof of Stake Beacon chain, with sharding coming at a later time.

Sharding a network makes it easier to run a node because the data is divided into smaller parts, so validator nodes don’t have to store the entire blockchain history. Validators only need to confirm data integrity.

Networks that do not use sharding usually turn to rollups to enhance scalability. Rollups gather transactions off-chain and validate them collectively on the main chain. Sharding can actually boost the efficiency of rollups, rather than being a rival. In a sharded network, rollups can communicate their status more effectively, thus enhancing their performance.

The main concern with sharding is the risk of malicious individuals gaining control of a shard. This shard could then have a detrimental effect on other areas of the network. Without proper precautions and regulations, it is easier to take over a shard than to take over an entire network that is not sharded.