Sharding is a layer one solution that could possibly solve the scalability problem of many cryptocurrencies. The development of layer two solutions (e.g. Lightning, Raiden Network) is important. However, layer one solutions, i.e. that is scaling solutions that work on the blockchain will always have priority as layer two solutions rely on the blockchain. Thus, with growing adoption of a cryptocurrency the first layer will always have to scale at least to a certain degree. You can only use the Lightning Network e.g. by opening a channel with a regular Bitcoin transaction.
What Is Sharding?
Simply explained sharding is simply the process of breaking up tasks that a blockchain has to platform. If you imagine the network of Ziliqa or any other cryptocurrency as a network of nodes, all those nodes need to perform the same tasks to maintain the blockchain. Sharding separates those tasks and splits the computers into different groups. Each of those groups has to perform certain tasks on the blockchain.
The advantages of this are that the sharded network processes multiple transactions in parallel. The normal Proof-of-Work network lets every node perform the same tasks simultaneously. Thus, sharding allows the network to retain all the positive features that standard on-chain processing. It is as transparent, secure and decentralized but makes the network faster and more secure.
How Tasks Are Sharded
Hypothetically spoken, Ziliqa relies on two different chains to enable sharding. The ‘first chain’ focuses on reaching consensus. This chain is organized by the sharding committee that assigns the different tasks to the actual nodes that process transactions.
a directory service committee, a group of nodes (XXX randomly selected), that organizes the other nodes that process transactions. Another group of nodes on that ‘first chain’ consists of so-called lookup nodes. Ziliqa separated these nodes in a distinct group of nodes for security reasons.
The ‘second chain’ has director service committee (DS committee), a group of randomly selected nodes. This DS committee is in charge of organizing the block storage on Ziliqa’s actual chain. The actual blockchain is stored on only some nodes of the network. To a standard user of Ziliqa storing the whole blockchain is of no interest in even more of a burden. However, exchanges and other companies or services do have an interest to store and monitor the actual blockchain. Therefore, it is, of course, possible for them to connect to the actual blockchain.
How Effective Is Ziliqa’s Sharding Solution?
Ziliqa’s main net has now launched about two months ago. As of now, there has still not been a comprehensive stress test. So the Ziliqa developers cannot give a definite answer on how many transactions Ziliqa can handle as of now. The CEO Ziliqa, Xinshu Dong, estimates that the network could currently handle several thousands of transactions per second. However, this is a claim that many other crypto projects have made before.
Currently, the project is in the phase of seeking strong partners that will help with the adoption of Ziliqa. ICOs, the tokenization of assets, games and the creation of useful apps are one condition for this. If Ziliqa is really capable of handling as many tx/s as it claims, it has good arguments for strong developers and businesses to build on Ziliqa.