Sharding is the term given to a method used in databases that increases their efficiency. A horizontal portion of a database that is stored in an individual server instance is called a shard. By sharding data, data load is spread across servers evenly, making the database function more effectively.
When talking in terms of the Blockchain, sharding of data will mean that every node of a Blockchain network will have only a part of data. It won’t be in possession of the entire information of that Blockchain.
Nodes maintaining a shard will maintain information only on that particular shard. This will be done in a shared manner and within the shard, so the decentralization is still intact. The nodes do not load the entire Blockchain data, hence aiding in scalability.
Blockchains that have implemented sharding can’t achieve consensus through POW consensus mechanism. This is because it is impossible for all participating nodes of a Blockchain to validate transactions when they are in possession of information of only one shard. They use the Proof of Stake (PoS) consensus algorithm.
Although the concept of sharding is relatively new, some projects have already adopted this concept like the Shard Coin (SHARD). Another project that holds great potential, is planning to employ sharding for swift transactions. It is Telegram Open Network (TON) that is presently in its private token sale phase and is being developed by Telegram (popular encrypted messaging app). The cryptocurrency of TON, i.e., GRAM, will be used to transfer money across borders at negligible remittance fees.
The Blockchain and crypto developers need to focus on a crucial area to enable wider incorporation of sharding. Although a shard allows smooth communication in between its nodes, cross-shard communication is tedious. Developers need to develop a separate protocol to enable inter-shard communication. If this challenge is addressed, sharding will witness an increase in its adoption by multiple folds that’ll result in increased scalability of Blockchain and greater transaction amount.