Blog » blockchain » Shardeum – The Blockchain For Billions of People!
Shardeum solves scalability trilemma layer 1 blockchain

Shardeum – The Blockchain For Billions of People!

A new layer 1 and community driven blockchain is on its way! How will it position itself among other layer 1 blockchains like Bitcoin, Ethereum, Cardano, Solana? How will it solve the challenges other smart contract platforms haven’t, retaining scalability, security and decentralization? Although you will get a clue from the name of the blockchain itself — Shardeum, there’s more than meets the eye. With a combination of technology and other factors discussed in this article, Shardeum is aiming to enable the adoption of DApps on a truly global scale. In this article, we will unpack the interesting mechanics behind Shardeum.

As many of us know by now, established layer 1 networks like Bitcoin and Ethereum are currently slow and expensive. More recent layer 1 blockchains claim thousands of TPS (Transactions Per Second) with barely any fees. However they understandably fall short in one or more of the following areas — linear scalability, high security, and efficient storage, which results in repeated outages.

This is where layer 2 solutions such as Polygon, for example, found their value propositions. Remember, layer 1 networks are operating on open source blockchain which allows such layer 2 solutions, that are faster and less expensive, to be built on top of them. Said architectures have quite successfully enabled various solutions such as DeFi, NFT’s and decentralized games for their users and investors. But evidently, not one blockchain thus far is able to address blockchain’s trilemma issue to serve billions of users our decentralized world will bring.

Blockchain’s Scalability Trilemma

Ethereum’s famed co-founder, Vitalik Buterin, coined the term, “scalability trilemma’” The scalability trilemma refers to blockchain’s inability to enable all 3 of its fundamental properties — security, scalability and decentralization — to coexist at the same time. Vitalik maintains that, at best, only 2 out of the 3 properties can coexist at a given time sacrificing the 3rd property.

Now, even if the scalability issue is mitigated with layer 2 applications, there have only been incremental improvements to meet the demands of trending blockchain use cases. What about when billions of other users are on-boarded for use cases in healthcare, supply chain, gaming, metaverse, social media, academia, government applications, etc.? The internet as we know it, Web 2.0, provides an efficient user experience we’re all accustomed to that decentralized applications must improve upon for society to adopt.

There’s More to the Scalability Issue

Consider a decentralized social media application. Today, social media apps host billions of activities and users on their networks. A single person can perform numerous activities such as ‘liking’, ‘sharing’ and ‘subscribing’ to content on them. As users, we also publish audio and video clips instantly on such platforms. Consider the throughput required for such activities produced by 300 million people (just for a second, forget about the rest!). The fact is, even the more recent layer 1 or 2 networks are not close to offering the throughput centralized competitors offer today, and definitely struggle to offer a UX up to par with what society is accustomed to. This excerpt from a recent article on coindesk.com, properly summarizes the situation.

“How many blockchain games have lore or world building? Where is the community-driven content and engagement on social media? It’s difficult to even find YouTube or Twitch gameplay of crypto games that supposedly have hundreds of thousands of users.”

coindesk.com/Zach Hungate/Coley Hungate

With innovation in mind, storage is another area often overlooked by layer 1 blockchains to meet user’s immediate needs. Storage is tied to the three fundamental properties mentioned above. If L1 blockchains continue to overlook the need for an infrastructure that would ultimately include hosting, say, a decentralized social media app, we have quite a few fundamental problems at hand.

Without the ability to effectively scale file storage on a blockchain, businesses and consumers will have to continue relying on centralized platforms such as Google, Twitter, or Facebook (Meta) to handle our PII. Centralized entities are known to have repeatedly abused the power of hosting user PII, which has been a catalyst for decentralization.

One example of said abuse is discriminatory practices. For example, centralized applications have restricted certain demographics of people from accessing their application based on the credentials and personal preferences provided by a user. There’s a reason why hundreds of millions of people still don’t have access to a bank account and basic healthcare. Mistrust developed over time cannot be healed overnight.

In addition to storage issues, a decentralized network’s security must be secure enough to minimize or alleviate malicious hacks to its ecosystem. Blockchains must protect every user, investor and application on-chain.

Shardeum’s Solution to the Scalability Trilemma Issue

When Shardeum was publicly announced by Co-founder, Nischal Shetty, he made it clear that Shardeum doesn’t plan to reinvent the wheel. Rather, Shardeum aims to leverage existing tools and applications such as the EVM to solve scalability trilemma without compromising on security and decentralization. Of course there are unique innovations in Shardeum as the other Co-Founder and Chief Architect, Omar Syed, would say. Shardeum is being developed using Omar’s unique distributed ledger project launched in early 2018, Shardus.

Omar has worked as a Principal Architect at enterprises such as NASA, Yahoo, Raytheon and Zynga (developers of games like Farmville) to build highly secure, fault tolerant, and scalable distributed systems. He was introduced to Bitcoin in 2011 and he has been watching the blockchain space closely since. Omar deeply appreciates the fact that Satoshi Nakamoto introduced decentralization in cryptography through Bitcoin’s blockchain. Bitcoin inspired him to actively work on developing Shardus and other web 3.0 technologies. His ultimate goal is to positively affect unbanked/underserved humans eventually, like some of his other noble peers in the crypto industry. You can also watch the below video to understand what is blockchain trilemma and how to solve it.

Shardeum’s whitepaper, expected by the end of Q1 of 2022, will detail the technical features used to accomplish Shardeum’s solution to the scalability trilemma. In the meantime, let me present some of the top highlights and differentiators of Shardeum at a high level based on my understanding from its recently launched/in-progress website. A side note here – Shardus and Shardeum are two different projects. Shardus is software used to easily spin up a linearly scalable decentralized network, so developers can focus on the application layer. Shardeum is integrating the EVM with Shardus at the application layer.

Distinctive Blockchain

Most of the current distributed ledger protocols have self-imposed scaling limits. The limited scalability is a result of grouping transactions into blocks before nodes commit to validate/update them. The protocols of, say, Bitcoin or Ethereum, or any other typical blockchain today, stipulate maximum size for their blocks and the rate at which blocks are produced.

The aforementioned protocols set a ceiling on the rate at which their network can process transactions. Limiting TPS eventually results in network congestion. As a result miners and validators have to now work harder (through larger computational and/or economic resources) for consensus. When network congestion results in higher costs to operate a node, nodes prioritize transactions in order of highest fees paid instead of processing transactions in the order they were received. These are obvious issues that stifle the scalability of many blockchains.

Although transaction fees are usually burned by these networks to prevent the native coins from experiencing short term inflation, high demand often results in high (gas) fees. Increasing gas fees are a nuisance for users submitting transactions to the network. Imagine buying a NFT worth $200 for $250, ($50 being the transaction fee). That is literally what’s happening today. To clarify, this is due to supply and demand issues more than anything else. This is where projects such as Shardeum step in and advance the blockchain ecosystem.

Transactions on Shardeum’s network are not grouped into blocks before they are committed which provides an early advantage to the network. Only the nodes that hold at least one account mentioned in the transaction will process the account by coming to consensus on the transaction and updating it. The transaction is now committed followed by grouping them into blocks or partitions which are passed on to the archive nodes. Let’s now see how transactions will be validated on Shardeum.

Consensus Algorithm

Transactions are verified/updated through a relatively less complicated and innovative consensus mechanism called PoQ or Proof-of-Quorum. As opposed to PoW and other consensus algorithms in use today, nodes in PoQ validate the transactions individually as soon as they are received with a time stamp (with no possibility of double spends). This is followed by gossiping the transactions to all the other nodes in a consensus group on the network instead of every node on the network (you will know why as we uncover more about Shardeum below).

Every node, essentially, will know that every other node in the group knows about a particular transaction. This enables a trustless collection of votes (or quorum) in the form of receipts. And when there are more than 50% of the receipts, transactions are confirmed/updated on the network. Thereby, finality is reached very quickly with low latency which helps to avoid network congestion.

Auto Scalability, Security & Energy Efficiency

Shardeum will operate by combining both PoQ and PoS (Proof of Stake) for consensus to increase network security which complements Shardeum’s auto-scaling feature. Auto-scaling is crucial because when you build a network, it should ideally be able to self-govern the number of nodes it needs to properly incentivize. Auto-scaling enables a network to scale throughput proportionally to the number of nodes available at any given time.

The consensus algorithm, playing its key role, will assign a ‘node ID’ to Shardeum nodes before they are allowed to join the network. The network will assign node ID randomly to participating nodes on a rotational, leaderless basis to leverage other standby/waiting nodes. In my opinion, this feature coupled with PoQ is good enough for the network to achieve aBFT grade security level, which ranks as the highest in consensus algorithm.

With PoS, security is further fortified. To that point, nodes will need to stake a certain amount of network coins to become a validator so you can expect misbehaving nodes to be slashed when necessary. Shardeum ultimately would not need excessive energy beyond what is necessary to process the transactions which now has the potential to scale limitlessly. 

1 Million TPS : Enter Dynamic State Sharding…

Sharding is not a new concept to the blockchain industry. On the contrary, it is a very well researched solution by top layer 1 blockchains such as Ethereum. In fact the tech industry has recognized sharding centralized databases as a prime solution for scalability in various applications for decades now. How does sharding help with scaling centralized networks? Below you will find an image – it’s a simplified illustration of sharding. In simple words, sharding breaks the job of validating and confirming transactions into small and manageable bits, or shards. While sharding is ultimately the best way to tackle the scalability issue, applying it to blockchain-based networks is not nearly as easy as applying it to centralized databases.

The good news with Shardeum is, as we’ve discussed in the paragraphs above, the transactions are committed first before they are grouped into blocks or partitions. This enables the network to state shard and evenly distribute compute workload, storage, and bandwidth across all nodes on the network. Each node thus, will be able to process ‘x’ number of transactions per second. And a new term is coined thereby, “transactions per second per node”.

Sharding example
Source : devopedia.org/Oracle Docs 2020b, fig. 49-1

Shardeum, further, wants to send out a clear message that anyone should be able to operate a node and join the network with minimal resources and compute requirements to maximize decentralization. This takes us to another key feature Shardeum offers which, as an idea, is practiced widely within the blockchain community. In most blockchains, each node stores a full copy of the ledger which includes sequenced historical transaction records in blocks as well as a state database to maintain the current/global state. Shardeum proposes that validator/consensus nodes would need to maintain only the current state within a shard while the historical data can be handled by archive nodes on the network. This helps the network to achieve a core objective — scaling horizontally with low bandwidth.

Moving on, let’s now review an example of throughput Shardeum foresees itself to achieve quite seamlessly. Let’s say Shardeum can process 100 TPS already and there are 100 nodes in total. That means the network can process ‘1 transaction per second per node’. When 9,900 more nodes join the network, it will be able to scale to 10,000 TPS as the nodes join. And by bringing state sharding, fast finality and low bandwidth into the equation, 1 million TPS will be breached finally! Through linear scaling and robust smart contracts, Shardeum will be capable of handling layer 2 applications (and the throughput they produce) that are developed atop its network at a global scale without impacting its performance and UX.

In Conclusion

‘Efficiency’ is stamped all over Shardeum, in a nutshell. As mentioned previously, the whitepaper is expected to be released by the end of Q1 2022 with exact details on Shardeum’s breakthrough in solving the scalability trilemma. Alphanet is planned for launch in Q2 ‘22 and Betanet in Q3 ‘22. The launch of mainnet and Shardeum’s native coin, Shard, which uses the ticker symbol, SHM, is expected to occur in Q4.

In addition to operating as a decentralized team, Shardeum has openly pledged allegiance to OCC which will form the core mission of the project. OCC is short for Open, Collaborative and Community Driven. OCC’s traits offer anyone anywhere in the world the opportunity to join Shardeum and its movement to transparently operate and achieve its milestones. In the words of the co-founders, Shardeum is not trying to compete with other networks. Instead, Shardeum is keen to compete with itself to improve objectively. This way, the Shardeum Foundation can focus on learning from its peers, while also inspiring others to decentralize industries on a global scale and build DApps that serve billions of users.

In my opinion, Web 3.0 should aim to be as transformational as Web 1.0 or 2.0, but it also should strive to achieve what 1.0 and 2.0 never could. That is, to enable decentralized applications in a scalable and secure fashion. I understand such intentions have become a cliché and overused now. But they are worth the loop. The scalability trilemma is worth exploring until it’s solved. This is what I want to convey at the end of the day – when three core principles of open source blockchain finally get to coexist – we will come closer to the industry’s larger agenda. When a trustless society becomes reality – where you don’t have to necessarily bank on an intermediary to include you or not.

Popular Searches

Layer 1 Crypto Projects 2022 | EVM Wallet Address | Ethereum That Are Compatible With The EVM | Types of DDos Attack | What is AMM in Crypto | Cryptocurrency Career Opportunities | Decentralized Identifiers | Advantages of Consortium Blockchain | What is Cloud Mining  |  Best Place to Mint NFT  |  What is Automated Market MakerHow to Mint CryptoSB Token  |  What is Web 3.0  |  Scalability Trilemma  |  NFT Use Cases 2022 | What is a Blockchain Node  |  What is a Blockchain Bridge  |  What are Peer to Peer Payments  |  Pros and Cons of Blockchain Technology


Opinions expressed in this publication are those of the author(s). They do not necessarily purport to reflect the opinions or views of Shardeum foundation.

About the Author(s) :

Subbu is a fintech blogger @ his website livingstable.com. Through his contents, he seeks to guide people to utilize financial resources online and realize the power they have on their fingertips. Follow him on LinkedIn and Twitter

Gregory Hemmer is a Cryptopreneur and business development professional based in Dallas, Texas. Building decentralization for everyone @ Shardeum and Shardus. You can follow him on Twitter


Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top