Ever since its announcement, Shardeum has made a buzz among blockchain/crypto enthusiasts by claiming to be the solution that provides an answer to the blockchain scalability concerns. The most prominent reason for all this excitement is Shardeum’s use of Sharding methodology for scaling. While the use of the sharding method in the blockchain world is not unique to Shardeum, the way they are deploying it is novel and promising.
Why are we talking about scalability issues?
Before we delve into sharding, let us look at why scaling is one of the biggest problems blockchain technologies face on their path towards mass adoption.
According to a recent report by crypto.com, the total number of global crypto owners stood at 295 million at the end of 2021, almost tripling since the start of the year. Extrapolating a similar growth rate over 2022, we may have over a billion crypto owners by the end of this year.
When we think about the network infrastructure needed to support a community of billion+ crypto owners and users, the solutions of today come up short. The current layer one (L1) blockchains were not designed for mass adoption of this magnitude. The two biggest blockchain networks Bitcoin and Ethereum handle only around 3-7, and 15-25 transactions per second (tps) respectively. Compare this to the two biggest traditional finance payment processing network companies, Visa and MasterCard, capable of processing 24,000 and 5,000 tps respectively, and we realize how much further we need to go from here.
While there have been numerous attempts by other L1 blockchains at scaling, they end up compromising on the decentralization or the security aspect. Other measures like increasing the block sizes, or having layer two (L2) solutions have problems of their own.
The world has already realized that vertical scaling i.e., committing more hardware resources is not enough to take blockchain and cryptocurrency technologies towards a mass adoption phase. It can be safe to say, that blockchains have brought us to a juncture where the fabled Moore’s law is no longer applicable to the world of distributed computing networks.
This lays the ground for our next question: How can Sharding be the panacea to such a formidable scalability problem
Sharding by Shardeum: How does it attack the scalability issue?
In simple DBMS (database management system) terms, sharding is defined as a type of DataBase partitioning in which a large DataBase is divided or partitioned into smaller datasets, known as shards. In the blockchain world, sharding means partitioning to distribute the network’s computational and storage workload, so that each node doesn’t bear the whole entire network's transactional load. It breaks the job of validating and confirming transactions into small, manageable bits. Each node only maintains information related to its, and processes transactions for its own partition or shard.
Shardeum is not the first blockchain to attempt Sharding. One of the prominent examples of sharded chains is Polkadot, which itself acts as a layer zero (L0) solution, while multiple heterogeneous shards (parachains in this case) attach themselves to the Polkadot base layer and execute different transactions. Polkadot provides security and communication across parachains. Another example is Zilliqa, which claims to be the world’s first L1 blockchain to use the sharding method. This raises the question: what makes Shardeum ground-breaking? The answer lies in consensus by transaction.
Earlier sharded blockchains like Zilliqa are grouping transactions into blocks and do transaction processing or consensus at the block level. With this, they are able to achieve higher efficiency, but it is not the most amenable way for sharding. Since consensus is achieved in blocks, a transaction may have to wait for the shard responsible and may need to go through multiple shards.
On the other hand, Shardeum achieves consensus by the transaction. So, a transaction does not have to go through multiple shards for processing. This, in turn, allows for a number of network features, which together make Shardeum one of the most scalable L1 solutions:
Dynamic sharding: The network doesn’t have a static group of nodes as fixed shards. Nodes in the Shardeum network are free to move around and accommodate more data as dynamic shards.
Linear scaling: Every single node that gets added to the network will increase the transaction throughput right away. It doesn’t have to wait for a fixed number of nodes to be added to the network to create a new shard.
Auto scaling: It is designed to auto-scale, i.e., the network maintains consensus on how many nodes it needs based on the traffic. It can allow more nodes to be added to the network based on bandwidth required, as well as shrink down when it doesn’t have enough traffic.
Shardeum pioneers a new approach with the sharding method. With such powerful features packed in a single blockchain, it is designed to be inherently scalable. Though time will tell, its architecture appears to be ready to be able to on-ramp billions of new users onto the crypto space.
Shardeum: The L1 that was promised?
Shardeum with its unique approach to sharding is operating in unchartered territories in the blockchain space. It promises infinite scalability while maintaining true decentralization. If successful, it may well be considered equivalent to or even greater development than Ethereum introducing smart contracts to the world of blockchains.
References:
Shardeum: Live with Omar and Nischal (YouTube video)
Crypto.com report, ‘Crypto Market Sizing: Global Crypto Owners Reaching 300M’ January 2022 (Link)
‘What is Transactions Per Second (TPS): A Comparative Look at Networks’ Author: Jeffrey Craig Date: November 2, 2021 (Link)
Investopedia: Moore’s Law (Link)
Polkadot v1.0: Sharding and Economic Security, January 21, 2022 (Link)
GeeksforGeeks: What is Sharding? (Link)