Up until now, the Ethereum blockchain has been plagued with the scalability issues that have led to congestion, resulting in reduced transaction times. Bitcoin successfully addressed the issue by activating Segwit and hard forking into Bitcoin Cash.
It now appears that Ethereum is gearing up to address the issue once and for all, but in a different way. Ethereum Founder Vitalik Buterin has indicated that they intend to begin testing a new scaling tech dubbed ‘Sharding’
What is Sharding?
Simply put, Sharding is the process of splitting a database to benefit from the computing of more than one server. Ethereum developers intend to break the network’s blockchain into parts that would run on different servers.
By splitting the blockchain into parts and hosting them on different servers, Buterin believes they will be able to harvest this computing power to increase the transaction times. An additional benefit of the split is that it should also result in reducing the processing fees.
Sharding implications are starting to become clearer by the day. Coders have already started to introduce protocol level redesigns, thanks to the upgrade. According to Phil Daian, a researcher at Cornell University’s initiative for Cryptocurrency and Contracts, Sharding will provide an opportunity to redesign the economic models and other aspects of the system.
Daian and a team of other researchers have embarked on what they call ‘Project Chicago’ with the aim of redefining the Ethereum network to make it work more efficient. For instance, the project will try to identify the types of commodities traded at the core of Ethereum.
They intend to achieve the same by isolating network elements like gas, storage, and UTXO transaction data to implement protocol level markets.
“We want to look at all of the services and resources the network is providing and say, ‘OK, how do we create a market-based system for price discovery and the incentivization of this,” said Mr. Daian.
The researchers have also developed a tool called GasToken that allows users to store gas on the network when it is cheap and sell it later when its price rises. Project Chicago should also pave the way, for other financial mechanisms such as futures for Ethereum.
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