Security or Decentralization or Transaction Throughput- What Blockchain Must Let GO?

Here’s How one researcher, Sharding, could solve the Ethereum scalability trilemma.

Following the successful Ethereum Merge, all eyes are on the next phase of transition, which will introduce key scalability solutions on the platform, such as sharding. According to market analysts, sharding would be a game changer for the Ethereum network because it would potentially solve the scalability trilemma. Dr. Martin Hiesboeck, Uphold's head of research, explained how sharding could help Ethereum become a truly global network. Hiesboeck believes that sharding will eventually solve blockchain networks' long-standing scalability trilemma. The scalability trilemma states that to scale, blockchains must usually sacrifice one of their three fundamental cornerstones of security or decentralization, with the third being scalability itself.

In layman's terms, sharding would enable the secure distribution of data storage requirements while also making nodes easier to operate. Transactions are processed one block at a time in the current blockchain processing system. However, with the addition of sharding, the network can now process multiple blocks of transactions at the same time. Validators who verify specific blocks will publish signatures attesting to their actions using this mechanism. Meanwhile, everyone else will only have to verify 10,000 such signatures rather than 100 full blocks, which is a lot less work.

Hiesboeck explained that sharding would not only increase Ethereum throughput by a factor of ten but would also reduce gas fees and make the network more energy efficient. He explained that the energy savings and scalability are due to "smaller packets that must be moved as sharding stores datasets in manageable blocks and allow additional requests to be executed at the same time." Previously, Ethereum developers intended to launch 64 shards, which would require approximately 8.4 million Ether (ETH) to be staked in Eth2. However, there are nearly 13.8 million ETH staked as of now, so the number of initial shards could be even higher.

Because nearly 43% of nodes are clustered in the United States, the transition to PoS has raised node centralization concerns, particularly in light of the United States Securities and Exchange Commission's (SEC) jurisdiction claims over ETH. Hiesboeck believes the SEC's claims about Ethereum are incorrect.

Hiesboeck concluded by stating that the Ethereum developer community has a proven track record and has previously demonstrated its resilience, demonstrating that anything can be solved given enough time.