Solving the Scalability Problem: How Hash Technology Works in Blockchain

Executive Summary

Sharding represents one of the most important proposed solutions to address the scalability constraints in layer one blockchain networks. This technique divides the network into multiple “shards,” allowing for parallel transaction processing. The result: higher speed, lower costs, and improved network performance. However, sharding is not without its security and technical challenges that must be handled with care.

The Fundamental Challenge: The Triple Blockchain Dilemma

Blockchain technology faces an inherent contradiction: decentralization, security, and scalability cannot be achieved simultaneously. This is known as the “trilemma.”

Traditional networks have chosen to sacrifice scalability in favor of maintaining security and decentralization. Each node keeps a complete copy of the data, which ensures security and transparency but significantly slows down processing.

Here comes the role of segmentation as a strategic solution that seeks to achieve a balance between these three elements.

What is hashing exactly?

Sharding is a concept inspired by modern database management. The idea is simple: instead of processing all transactions sequentially, the network is divided into independent sections called “shards.”

Each part functions as a separate unit, capable of:

• Processing its transactions independently
• Implementing smart contracts
• Data validation
• All of this in parallel with other parts.

Applying this model to blockchain networks achieves two main goals: improving speed while maintaining decentralization.

How to Apply Hashing Practically

From serial to parallel ###

In the traditional model ( sequential processing ), each node in the network is responsible for:

• Processing each transaction
• Verify its validity
• Store all complete data

This provides high security but creates a real bottleneck in performance.

Sharding changes this scenario entirely. Instead of a single linear process, multiple processes occur simultaneously on different shards. This means a much larger number of transactions processed per second.

Horizontal partitioning: the technical foundation of sharding

Segmentation relies on what is known as “horizontal division” rather than vertical.

Horizontal Partitioning: Data is divided by rows and distributed across different nodes. Each node maintains an independent subset of data. This ensures that the integrity of the information is not lost.

Vertical Partitioning: Data is divided by columns (properties). Each node retains all properties for a specific set of entities. This is less efficient for blockchain.

Why is horizontal partitioning optimal?

Three main reasons:

1. True Scalability: Each component operates independently, greatly increasing the number of transactions processed.
2. Preserved decentralization: More nodes can join because the computing and storage requirements are much lower.
3. Data Security: Each part retains its complete transactions, preserving the integrity of the data.

Tangible Benefits of Fractionalization

radically accelerate transactions

Instead of waiting for the first transaction to be completed before starting the second, thousands of transactions can be processed at the same moment on different parts.

Practical example: The Ziliqua network is already using hashing and processes thousands of transactions every second. This was impossible with the traditional model.

reducing computational and financial burdens

The traditional model imposes on each node:

• Full data chain storage
• Processing each transaction
• Verify each transaction

This means that participating in the network requires massive resources and very high costs.

With sharding, each node processes only a portion of the total data. The result: ordinary users with regular devices can become validators. This enhances true decentralization and maintains the democratic nature of the network.

Improving the overall performance of the network ###

In traditional networks, as the number of nodes increases, performance decreases ( because communication between them becomes more complex ).

Sharding reflects this trend. Each shard operates in parallel, and new nodes are added to specific shards rather than the entire network. The result: better performance as the network grows, not degradation.

Challenges and Risks That Cannot Be Ignored

the weakness of individual components against attacks

In the proof-of-work model, the computational power required to control one portion is much less than controlling the entire network.

This opens the door for the “one percent attack”: an attacker with relatively limited resources may be able to control a single part. This is a real security threat that requires strong additional protection mechanisms.

transaction complexity between parts

When a single transaction involves data from multiple parts, things become very complicated.

Problem: The risk of double spending. If one part does not accurately track the state of the other part, users may exploit this to spend the same funds twice. Managing this scenario requires very complex protocols.

provides data and network

If some parts become unavailable (, offline contracts ), the network may face issues retrieving and verifying complete data. This can disrupt the entire network.

imbalance between the parts

If data and processes are not evenly distributed among the parts, some parts may become overloaded while others remain idle. This harms overall performance.

Delay in synchronization between nodes

Data sharing and updating between thousands of different nodes takes time. If there is a node with a slow connection speed or weak processing, it can disrupt the entire process.

The Role of Segregation in Ethereum: The Path to the Future

Ethereum plans to implement sharding as part of the Ethereum 2.0 upgrade, also known as Eth2 or Serenity.

The goal: to improve the speed and efficiency of the network, allowing for the processing of many more transactions and reducing congestion.

Stages:

• Phase one and two: incremental improvements
• Final stage: Complete application for fragmentation

Ethereum developers hope that this upgrade will solve scalability issues and high costs. However, the application requires very thorough testing to ensure that security and decentralization are not compromised.

Summary: The Future of Blockchain is Fragmentation

Sharding represents a serious step toward solving the blockchain trilemma. Despite the real technical challenges, the potential is enormous:

• Real expansion without sacrificing decentralization
• Competitive transaction speeds
• More democratic and equitable networks

Many other blockchain chains are seriously studying sharding. The success of Ethereum in implementing sharding will be a model to follow.

However, as with any emerging technology, true success will depend on continued investment in research and development and rigorous testing before widespread application.