In 2015 Ethereum was released to loads of promise with its virtual machine on a blockchain is the first and pioneering smart contracts which allowed for the ICO boom of 2016/17. Ethereum looked to be hitting its stride with more dapps coming board and using its network supported by miners from around the world.
As the popularity of the network grew, more wallets were coming online, and transactions were moving all over the place between wallets, dapps and exchanges the system naturally saw a price uptake in transaction costs and a slow down of the network.
As core projects have stalled, Dapps have failed to attract users we've seen Ethereum’s price has fallen its peak of 51% of Bitcoin’s market cap to around 17%.
Image source: - blog.sfox.com
Failed to scale
For all its promise and wonder the Etheruem blockchain hit its first snag, it failed to scale and maintain performance and cost to keep its use attractive. To live up to its potential Ethereum has to solve critical problems around scalability and performance.
One of the solutions to scalability that has been talked about heavily is a concept called sharding.
How Ethereum creates bottlenecks
A full node on the Ethereum network stores the entire state of the blockchain, including account balances, storage, and contract code.
Nodes on the network do not have special privileges and all act in the same way — every node in the network stores and processes every transaction. As a result, the network is only as fast as the individual nodes rather than the sum of its parts, which has and will put severe constraints on improving the system.
What is sharding?
Sharding helps to alleviate these issues by providing an exciting yet sophisticated solution. The concept involves grouping subsets of nodes into shards which in turn process transactions specific to that shard.
This splitting up of nodes allows the system to allocate its resources better so that many transactions can be done in parallel.
A more straightforward way to put it would be from a quote by the Ethereum co-founder.
“Imagine that Ethereum has been split into thousands of islands. Each island can do its own thing. Each of the islands has its unique features and everyone belonging on that island, i.e., the accounts, can interact with each other AND they can freely indulge in all its features. If they want to contact other islands, they will have to use some protocol.” - Vitalik Buterin
How will sharding help build Ethereum 2.0?
While Sharding sounds excellent in theory, there are a number of potential vulnerabilities that it opens the blockchain to such as malicious code. One specific attack on single-shard could ruin the network. The Ethereum core developers point to random sampling as a potential solution, but this is still being developed.
Sharding is also much easier to implement on a proof-of-stake chain than it is on a proof-of-work chain, and this is why ETH will be migrating to a stake based system. This will result in even more changes to its codebase to build a platform for sharding to be built on top of it.
ETH is slowly making progress with its main network and its exciting to see what they have planned and if their proposed solutions will take the project to the next level and bring back confidence into the blockchain space.
Make your Eth bet
Do you hold any Ethereum? Have you been using any ETH based dapps? What do you think about Ethereums future? Let me know in the comments.
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Written by @chekohler