The Role of Sharding in Improving Ethereum 2.0 Scalability

July 28, 2021 Quick read

Blockchain technology development is the focal point for every cryptocurrency growth. The measure of a digital coin's growth is based on the innovative solutions its developers have implemented. Just as every other cryptocurrency, the scalability of Ethereum is a vital aspect of its development, which has helped reach a larger audience. There is a need to identify how fast and efficient it grows with technology and its position in the financial market.

Ethereum is the second-largest cryptocurrency, competing with the first currency, bitcoin. Ever since, many currencies have joined the peer-to-peer network, drawing more competitors like Cardano to Ethereum. However, the easy scalability of Ethereum allows it to stand out among others.

Cryptocurrency scalability means a digital currency's ability to adopt new technologies and implement them in the supply chain. However, Ethereum achieves scalability through sharding. Furthermore, this article discusses the importance of sharding and how it has helped improve Ethereum 2.0 efficiency.

What is Sharding?

Sharding means the distribution of verification tasks between nodes to improve efficiency and scale up resources. This Ethereum architecture permits each node to access the development of another, improving the security rate. Also, this process improves overall capacity by allocating data verification tasks. Hence, Ethereum is ahead of bitcoin since it implements an alternative to PoW's slow transaction rate.

Why Sharding?

Scalability is an essential condition for cryptocurrencies, especially when its founders want to launch into business space such as FinTech. Hence, sharding enhances the peer-to-peer network to ensure the scalability of Ethereum. When comparing the benefits of cryptocurrency, it is crucial to consider the rate of transaction. Although Bitcoin and Ethereum are close competitors, they have a similar performance issue: their reliance on the Proof of Work (PoW) mechanism. PoW is highly secured, but it takes a long time to validate transactions and consumes a large amount of energy. As a result, it incurs a high cost of production. New cryptocurrencies now adopt a cheaper and faster transaction mechanism known as Proof of Stake (PoS). The PoS mechanism is an excellent push for new currencies that are struggling to survive the market. To ensure the scalability of Ethereum, developers implement sharding, which was launched as ETH 2.0. This allows a less complex and efficient mechanism. Sharding also plays a significant role in verifying the authenticity of users' transactions. Since illegal activities are becoming rampant today, here is a means to save the main benefit of cryptocurrency: transparency. By doing so, governments can monitor illegal activities and every terrorist-related fund.

The new changes in Ethereum were revealed in mid-2020 which has, since then, generated more users than ever. Before Ethereum developers launched sharding to the public, it went through several tests to confirm its capacity to create a new era. Fortunately, sharding has proven to yield great results.

So far, Ethereum has proven to be scalable from the implementation of several smart contracts. At the same time, Ethereum developers explore the sharding advantage and employ means always to make it better. Hence, providing users with utmost satisfaction should be the ultimate goal of every cryptocurrency.

These days, many cryptocurrencies come into the picture and do not last long in the market due to a lack of value. With the rapid increase of digital investors, users are perplexed about what blockchain technology brings on board. Following a previous or stale routine can push a cryptocurrency forward because blockchain technology is a great innovation that needs to be frequently worked on. Crypto enthusiasts and influencers are showing their support. Although the market is often unpredictable because of cryptocurrencies' high volatility, a coin with a large community would bounce back at a fast rate. This means that people's response on social media or over the internet influences the growth of a cryptocurrency.

In 2020, Ethereum recorded the most significant transaction rate, thanks to the multiple layers its developers keep exploring. Moreover, we all can anticipate a Big Bang before the next decade. This is also the same for other top cryptocurrencies like Bitcoin, Litecoin, Ripple, and many others, provided there is an appropriate scaling system.


Recently, many people argue about the type of cryptocurrency to dominate the digital market. Although Bitcoin seems to top the list currently, it may be overtaken by Ethereum sooner than we think. One major factor that may cause bitcoin to lag is the scalability of Ethereum.

Having discussed the importance of sharding in this technology age, hopefully, you realized why you need an efficient coin to diversify your cryptocurrency portfolio.