Chainalysis – a commonly used blockchain data company – recently invested in an unspecified amount of Bitcoin. The investment comes as Bitcoin's price creeps ever closer to all-time highs and surpasses its market cap record from May. Chainalysis Plans to HODL The data provider announced its latest investment in a blog post today and simultaneously confirmed a new partnership with NYDIG. NYDIG is a Fintech service provider for banks, corporations, and institutions. The financial company has allowed Chainalysis to add…
The crypto world is growing, and as such, blockchains are increasingly facing scalability issues as crypto adoption increases. For instance, Bitcoin is currently the largest crypto market capitalist, and it completes more than 299 thousand transactions daily. Due to its vast growth, bitcoin’s network experiences regular downtimes.
However, bitcoin is not the only blockchain with scalability issues; Ethereum, the second-largest crypto market capitalist, faces similar issues. The scalability problem is, therefore, menacing the entire crypto world and requires urgent solutions.
A new algorithm dubbed sharding might be the answer to scalability questions that is on the rise. But what is sharding, and how does it work? Here is a complete guide on sharding.
Sharding in a Nutshell
Sharding, horizontal partitioning optimizes the database by breaking it down into smaller operationally independent chunks called shards. The shard’s independence means that the database’s operation can be spread across multiple servers, including computers, ultimately bolstering its storage and operational capacity. Horizontal partitioning is quite distinct from vertical partitioning, which adds more computing power to the machines, including RAM, and better CPU functionality.
The basic idea of database sharding is distributing the dataset operable in one node to several nodes. When applied to the blockchain, sharding bolsters the blockchain’s functionality and ends the year-round scalability menace.
Take, for instance, the Bitcoin blockchain, which currently operates about five transactions per second. To improve Bitcoin’s transaction processing speed, developers can choose to break computations into different shards rather than focusing on increasing computing power. Then the Bitcoin developers will add more operational computers to serve the database. Using sharding in any blockchain will vastly increase the number of transactions per second.
Although shards are independent, their continued working together boosts the functionality of the blockchain. Developers should ensure the entire database remains up to date with the most recent transactions.
Types of Sharding Techniques
Key sharding, commonly known as hash sharding, uses the newly released hash value to determine the shard to place data. The release of a hash value occurs when a numbered input goes through a hash function. Key sharding distributes the data to bits, avoiding cases where relative values go into the same fragment. That utterly ensures that there are no hotspots, thus balancing the blockchains transaction processing.
Range Based Sharding
Range-based sharding is probably the most straightforward sharding algorithm to implement. It only involves dividing data or items based on a value range, i.e., price range, weight range, etc. However, this sharding doesn’t protect the uneven distribution of data. Thus the database will ultimately end up with hotspots that slow download database general operations.
Geo Based Sharding
Geo sharding first involves the breakdown of data based on geological locations. After this breakdown, the database uses either of the two sharding techniques, as mentioned above, to create shards.
Benefits of Sharding
Sharding comes with a vast array of benefits, foremost being its ability to provide an opportunity to add more machines. Adding machines ensures that there are no machine overloads since work is evenly distributed.
Increased machines lead to faster transaction completion in the blockchain. Therefore, in Bitcoin’s case, the transaction per second would vastly increase if the platform decided to merge sharding techniques in the blockchain.
The independence of shards also comes with the benefit of the blockchain’s full dependability mainly because there are no blockchain downtimes. Non-Sharded databases on blockchains experience outages that lead to the unavailability of the whole platform. However, in sharded databases, if one shard experiences downtime, the rest remain functional.
Another core benefit of the sharding technique is the overall security of the sharded platform. Hackers will never fully access the full database; instead, they’ll control a single shard while the rest enjoy services.
Disadvantages of Sharding
Although this technique is promising for blockchains, it comes with several disadvantages. Foremost is that users may lose important information since system backups that existed on earlier non-sharded databases are unusable in a sharded database.
Moreover, depending on the attributes or techniques used, sharding may bring about an imbalance of blockchain service provision. For instance, some database shards with fewer users will operate faster than the hotspots with more users, leading to the database’s partial unreliability.
The complexity of implementing sharding techniques is also another thing that hinders its adoption. Additionally, sharding can lead to the rise of security concerns commonly referred to as a shard takeover, where one shard attacks another.
Although many blockchains, especially giant ones, face scalability problems, merging sharding onto their databases could help end the crisis. The technique works by distributing data into small independent partitions which are operable in other computers. Sharding comes in different forms, including key, range, and geo sharding, all with the advantage of increasing resources for operational efficiency.
Moreover, sharding ensures maximized speed and complete reliability of the blockchain by mitigating the chances of downtimes. However, sharding comes with its fair share of challenges including complexity, and imbalance in providing services.
Several blockchains, including Ethereum, are still unable to introduce the technique in their blockchains formally. Whether to use or not to use sharding in blockchains is a question of the benefits vs. the cons.