Cointime

Download App
iOS & Android

What Is Ethereum Sharding? A Beginner’s Guide

By Laura Shin
The Ethereum developer community has been keen to address the blockchain’s prevalent scalability challenges via development updates. Following the shift to proof of stake (PoS), the next scalability step is Ethereum sharding.

Read on as we define sharding, explain how it works on the Ethereum network, and highlight its importance.

What Is Sharding?

Sharding is a scaling solution aimed at improving the Ethereum network’s capacity and transaction speed.

The Ethereum “mainnet” is divided into smaller, interconnected networks called “shards.” Each shard processes its own transactions and smart contracts parallel to the others, significantly increasing the network’s throughput and helping to reduce gas fees.

Sharding also helps to decentralize the Ethereum network as it reduces the load on individual nodes by distributing the transaction load across many nodes.

How Does Ethereum Sharding Work?

Ethereum sharding starts with the division of the network into multiple sections. Each shard handles a set of nodes that process transactions. Consequently, the nodes in each shard process transactions that belong to that shard. The validators on each shard verify the transactions and maintain the state.

Allocation to a shard is random and requires validators to have a stake to participate. Under the proof of stake consensus mechanism, a validator stakes a certain amount of ETH for their participation.

The sharding technique departs from the current transaction processing format, where all nodes are involved in every transaction. Cross-shard communication prevents role duplication, with shards sharing information about their transactions.

Currently, full nodes take up plenty of space and continually increase in size as more users join the platform. Sharding reduces node sizes since users only need to store a part of Ethereum’s transactional information.

Benefits and Drawbacks of Sharding Ethereum

Sharding Ethereum presents various benefits and drawbacks. Here’s a look at the most significant ones.

Pros

Increased Efficiency & Scalability

Instead of a single chain processing transaction, sharding enables parallel processing, which increases the number of transactions. This will go a long way in rivaling Web2 transaction speeds. Payment systems such as MasterCard and Visa process up to 24,000 transactions per second (TPS), while Ethereum currently stands at 20-30 TPS.

Increased Participation

Sharding offers the opportunity to scale without compromising transaction security. Ultimately, people can validate transactions without specialized hardware or high electricity consumption.

Cons

Attack Vulnerabilities

With transaction processing broken down to the shards level, attackers could potentially target a single unit. If such an action were successful, the bad actors could share information on invalid transactions with other shards, potentially compromising the entire network’s security.

Centralization Concerns

The possibility of collusion arises with the splitting of nodes into smaller groups. Such collusion could potentially lead to a form of centralization that goes against the ethos of Web3.

However, danksharding is a possible solution to the challenge of ensuring diversity and randomness in the composition of the committee members.

Smart Contract Compatibility

Developers may need to modify their smart contract codes since not all may be compatible with sharding. For those already live on the network with no upgrade option, that may present a challenge in their execution due to the incompatibility.

Why Is Sharding Important?

Sharding offers a solution to the high gas fees and low transaction speeds that hinder the use of the Ethereum mainchain from mass adoption.

Overly optimistic projections suggest sharding could help hit 100,000 transactions per second. Such speeds would present Ethereum as a convenient payment infrastructure that could rival mainstream payment rails.

With the number of participating nodes increasing, the power distribution also increases (provided there’s no collusion). This would lead to increased security as a highly decentralized network lacks a single point of failure.

Successful sharding implementation could open up new use cases for Ethereum as more businesses could choose to embrace the fast and secure transactions the network could provide. However, the successful implementation of sharding relies on the Ethereum developer community identifying potential challenges and developing solutions.

Comments

All Comments

Recommended for you

  • Web3 game developer Seeds Labs completes $12 million seed round of financing, with participation from Solana Foundation and others

    According to Cointelegraph, Web3 game developer Seeds Labs has announced the completion of a $12 million seed round financing, with participation from Avalanche's Blizzard Fund, Solana Foundation, Krust, Hashkey Capital, UOB Ventures, Signum Capital, IVC, and Emoote.It is reported that Seeds Labs, a Solana ecosystem game infrastructure developer, was established in 2021, and its Web3 game Bladerite is scheduled to be released this month.

  • The total subscription volume of Hong Kong Bitcoin ETF yesterday was 101.6, and the Ethereum ETF showed net redemption for two consecutive days

    The Hong Kong Bitcoin spot ETF had a net purchase of 101.6 bitcoins and a total holding of 4350 bitcoins on May 8th. The daily trading volume was 2.67 million US dollars, and the total net assets were 270 million US dollars. The daily BTC purchase came from Bosera HashKey and Huaxia Bitcoin ETF.

  • Trump announces he will accept cryptocurrency donations for his presidential campaign

    Donald Trump announced that he is accepting cryptocurrency as a form of donation for his presidential campaign.

  • Uniswap founder: Founders and VCs need to stop valuing startups and pre-coin crypto projects at more than $1 billion

    Uniswap founder Hayden Adams posted on social media that cryptocurrency founders and venture capitalists need to stop valuing projects at over $1 billion in the early stages of development and before tokens have been released, until they are truly worth that valuation. Building something worth 7-9 figures is an incredible achievement, and not every project needs to be a unicorn at launch. Additionally, Hayden Adams said, perhaps it's naive, but I think raising funds as a founder at a fair valuation (real talent wants upside) and investing at a fair valuation as a VC (LPs want upside) can make more money. It's just harder to do it that way.

  • Trump: The US will stop being hostile to cryptocurrencies and embrace them

    According to Watcher.guru on X platform, former President Donald Trump stated that he will stop the hostility towards cryptocurrency in the United States and embrace it.

  • Crypto mining company Core Scientific mined over $175 million worth of Bitcoin in the first quarter

    Encrypted mining company Core Scientific reported on Wednesday that it mined 2,825 bitcoins in the first quarter of 2024 (worth over $175 million at current prices).The company also reported a net profit of $210.7 million, compared to a net loss of about $400,000 last year. Its stock has resumed trading on Nasdaq after emerging from bankruptcy.

  • Fed's Collins: Reaching 2% inflation may take longer than expected

    The Fed's Collins stated that it may take longer than expected to reach a 2% inflation level; the policy is appropriately restrictive for risks; rates should be maintained until confidence is strengthened; the full impact of restrictive policies may not yet be seen; high uncertainty reinforces the need for the Fed to remain patient; it is necessary to slow down the US economic growth in order to put inflation on the path towards a 2% decline; there has been no sign of inflation falling back since 2024; demand is expected to eventually slow down, but there is uncertainty regarding timing.

  • U.S. House of Representatives passes resolution to overturn SEC cryptocurrency accounting standards announcement

    The US House of Representatives passed a resolution overturning the SEC's announcement on cryptocurrency accounting standards, with a vote of 228-182, showing clear partisan divisions. The announcement requires banks to record customer cryptocurrency assets as liabilities, causing industry controversy and concerns that it may hinder services. Republicans support the resolution, but the White House has stated that the President will veto the move, fearing it may cause financial instability. Democrats accuse the move of potentially weakening the SEC's authority. The resolution will now go to the Senate for review, facing more partisan controversy.

  • Rwanda’s central bank continues to advance retail CBDC project

    The National Bank of Rwanda (BNR) has opened its just-completed feasibility study on retail central bank digital currency (CBDC) to solicit public opinion. BNR is considering launching a national digital currency that combines technological innovation and is suitable for local conditions.

  • The 133rd Ethereum ACDC meeting: The goal is to complete the devnet within 7-10 days

    The Ethereum developers held their 133rd ACDC conference call. First, they outlined the latest research on Ethereum protocol confirmation rules. Then, they discussed Pectra updates related to EIP-7547 and CFI states, and decided to put them on hold temporarily. They also updated the v1.5.0-alpha.1 specification. Regarding the implementation updates for devnet-0, most teams are making progress, but there are also some unexpected complexities. The goal is to complete devnet within 7-10 days.