Is sharding really a solution to Ethereum's woes?

Leo Zhang

By Leo Zhang

The Ethereum network is facing a scalability bottleneck. As the network continues to grow and host more Dapps, it has begun to strain under the load. In April, Ethereum founder Vitalik Buterin revealed sharding, a proposal that might be able to increase transaction processing capacity on-chain. Simply put, sharding splits the blockchain into several sub-networks, and each "shard" processes transactions simultaneously. Vitalik states that, implementing sharding will make Ethereum cheap enough for for more sophisticated mechanisms such as Plasma. Ethereum researcher Vlad Zamfir has even claimed that "sharding is the only true blockchain scaling solution". However, not everyone shares the same optimism on the proposal. In a fiery post below, Bitcoin engineer StopAndDecrypt dissects some of the security issues sharding may encounter.

Sharding centralizes Ethereum by selling you Scaling-In disguised as Scaling-Out
(StopAndDecrypt)

"I think the most important takeaway out of this entire article is the section on Bitcoin’s network of fully validating nodes, inherent decentralization, and how this compares to everything else out there when people try to sell you 'scaling solutions'. So let’s compare this to Sharding. This is where it gets fun because even Vitalik hasn’t clearly outlined what the topology is going to look like. I’m going to try my best because Sharding takes the concept of 'all nodes are equal and do the same job' and completely abolishes it."

Reddit discussion thread on sharding

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Technical & Updates

Parity Ethereum client issue report
(Parity Tech)

"In the worst case, submitting a certain malformed transaction (coming from a 0xfff...fff address) to a mining Parity Ethereum node could have caused that node to produce a malformed block, which would still be treated as valid by other affected Parity Ethereum nodes."

FOAM and the dream to map the world on Ethereum
(CoinDesk, by Alyssa Hertig)

"As such, FOAM developers want to build a technology that mirrors GPS but is instead an open technology that anyone can contribute to. And to do this, the team needs a particularly resilient map of the entire world, which they plan to devise with the help of ethereum smart contracts."

Classifying Ethereum users using blockchain data
(Matthias De Aliaga)

"And if that’s not surprising enough — the top 10 addresses own 11.4% of Ether holdings. This concentration of Ether among a small group makes tracking the top accounts even more valuable."

Detecting ASIC miners in Zcash (draft v1.1)
(University of Luxembourg, by Alex Biryukov and Daniel Feher)

"Analyzing this information, we can see that even though the fraction can change over time, it was quite constant in the last 5 months (Jan-May 2018). Prior to that there is another period of about 5 months (Jul-Nov 2017) when the fraction of large miners was slowly increasing and then suddenly switched from 0.6 to 0.4. The switch might be explained by miners switching to BTCG or ZCL but could potentially be a slow growth due to ASICs."

Apples to apples, Decred is 20x more expensive to attack than Bitcoin
(Zubair Zia)

"In reality, accumulation of any substantial amount to reduce the hash power requirements would drastically increase the demand, sky rocketing both the token price and the internal ticket prices, making a real attack significantly more expensive."

Sia releases video streaming feature

News & Commentary

The future of digital collectibles: can physical goods drive Smart Contract value?
(Hackernoon, by Reza Jafery)

"I’m enthralled with the concept of digital collectibles, I see them as the easiest way for new people to start interacting with blockchain technology. The trick is making them user friendly enough for new users to give it a try. If executed correctly this could spur increases in market capitalization as new users clamor to get Ethereum and purchase their digital masterpieces."

Quebec halts Bitcoin mining power requests amid booming demand
(Bloomberg, by Frederic Tomesco)

"Regie de l’energie, as the provincial regulator is called, will be instructed to reserve a block of energy for cryptocurrency miners and to set a specific rate for the industry while considering issues including peak winter demand. Quebec wants to make sure Hydro-Quebec can maximize revenue while ensuring economic benefits such as job creation."

NYDFS chief defends state regulator's crypto approach
(CoinDesk, by Nikhilesh De)

"'While some state and federal regulars are taking time to create rules for the industry, 'it certainly hasn't taken New York long to establish a framework" for regulating cryptocurrencies, Vullo said in her opening statement, referring to the state's controversial BitLicense."

Op Ed: Venmo offers the ultimate cryptocurrency experience
(Bitcoin Magazine, by Erik Kuebler)

"Technically, all payment systems can support any currency (barring regulation). Even Bitcoin, which supports the BTC currency natively, could for example support USD or EUR through colored coins. Perhaps more importantly, while Bitcoin is not currently a user-friendly payment system, it doesn’t have to be, because the underlying BTC currency can be used in other payment systems as well."

Was the gig economy overblown?
(WSJ, by Eric Morath)

"Anyone who has ridden in an Uber, noticed a contractor working alongside them or taken a temp job to make ends meet might say the nature of work is shifting. But new Labor Department data show the share of workers who are independent contractors, in short-term jobs or otherwise in “alternative employment arrangements” is little changed since 2005."