In order to perform a transaction on Blockchain today, all computers, or nodes, in the network must validate the transaction or execute a smart contract, a piece of code stored in the network that delineates the conditions necessary for the transaction to be carried out. If all nodes achieve the same result and reach a consensus, the transaction is confirmed. As you can imagine, this takes time.

Sharding, on the other hand, runs on the parallel processing power of multiple networked machines that split up the workload of verifying transactions. It automatically divides networks into smaller sections, or “shards,” each of which runs a smaller-scale consensus protocol.

Processing in parallel, such a network is capable of churning out hundreds of transactions per second per shard, for a total of thousands of transactions per second.

As more nodes join, the network will become increasingly faster at validating transactions. Once such a network is as large as that of Ethereum, it will be able to handle so many transactions per second that it makes it faster and potentially cheaper than VISA.

If such systems achieve the speed necessary to take on the workload of our current banking system without sacrificing the permission-less nature of distributed networks, dApps that make use of everything from auctions to payments will be able to operate on its robust, secure, and efficient protocol. Sharding may help facilitate a major breakthrough in solving Blockchain’s scalability crisis.