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The Blockchain Trilemma refers to a widely held belief that decentralized networks can only provide two of three benefits at any given time with respect to decentralization, security, and scalability.
Public blockchains manage a widely distributed network of nodes to achieve data consensus over an infrastructure that is resilient to outside attack while maintaining transparency and equitable, open access. It’s a challenge. For example: while Bitcoin is decentralized and secure, it is only able to process approximately seven transactions per second (TPS). Enterprise blockchains like Hyperledger’s Fabric are secure and can handle high transactional throughput, but are centralized, with a highly limited number of consensus-achieving nodes. Blockchains that are fast and decentralized — but more insecure — are vulnerable to hacks that are untenable in the long term
Achieving a network that features watertight security over a widely decentralized network while being able to manage internet-scale transactional throughput is the holy grail of blockchain tech.
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.
The major benefit of sharding applied to the 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. Faster transactions can help blockchain-based fintech companies to compete with centralized payment applications.
Additional benefits of sharding include better accessibility to users and higher network participation. In Ethereum, sharding is expected to lower the hardware requirements to run a client, so that it would become possible to do it on a personal computer or phone. This way, more people will be able to participate in the network.
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3 Comments
You should define each concept. What does "security" mean in this context?
The Monero community is hard-forking again later this year to improve security and scalability in a big way. They already win the privacy war & have been pretty good at scaling versus most projects. But the devs do confirm that bandwidth is the bottleneck that makes extreme decentralization a hard nut to crack. Fiber to the home is only being deployed quickly in a few select areas and the hybrid fiber/copper infrastructure creates bottlenecks regardless.
Storage prices and capacity are not an issue, and CPU & RAM is not usually an issue for processing, but no one has 325 gbps bandwidth which would be needed for Visa at 65k TPS. 2.5 gbps up and down to the home is available in a fair number of regions, but bandwidth for huge transaction volume is nigh impossible. 10 gbps is available for rack mounted servers in data centers, so decentralization remains possible to a fair amount of transactions.
The only good news is that on average Visa only processes 1,700 TPS, but at stress testing levels it's north of 65,000 TPS, so the Transactions Per Second needed to process average volume is not impossible for a level one ledger, but Black Friday type day volumes are nigh impossible in a truly decentralized manner, so level 2 side chains may be needed for stress test levels of transactions.