Sharding is one of the solutions to the problem of blockchain scalability. It implies partitioning of the database into so-called “shards”, where each shard is responsible for processing only part of the data stored in the network. This way, the processing time can be significantly reduced.
Sharding is done by dividing the network nodes into groups and splitting the information stored in the network between these groups, i.e., “slicing” the database into smaller pieces (shards). Each shard stores data with certain characteristics so that the shards can be distinguished from each other.
It is important that shards can communicate with each other in one way or another, so that any user of the network could get access to all the information stored in the blockchain.
One of the most talked about use cases of sharding in the blockchain industry is arguably the sharding of Ethereum. The deployment of shard chains on Ethereum is a part of its upgrade to Ethereum 2. Another case of sharding used to improve scalability is Polkadot, a blockchain project aiming to create an interconnected ecosystem of blockchains.
The major benefit of sharding applied to blockchain is improved scalability. Sharding allows a blockchain to connect more nodes and store more information without slowing transactions too much. This can accelerate the adoption of blockchain technology in many sectors, not the least in finance.