Research Guide on Transaction Sharding of Blockchain Transactions

Research Guide on Transaction Sharding of Blockchain Transactions

Glossary

Term DefinitionsBlockchainA distributed database that records transactions and maintains a continuously growing list of transaction records. Blockchain ShardingThe process of dividing a blockchain network into smaller networks (called shards), with each shard processing a portion of transactions to improve scalability. CryptocurrencyA digital or virtual currency whose transaction security is guaranteed by cryptography. Cryptocurrency TransactionThe act of transferring cryptocurrency between different accounts. Complex Accounting StructureA transaction structure involving multiple input account addresses and/or multiple output account addresses. Transaction Sharding breaks down complex transactions involving multiple inputs and outputs into multiple simpler, peer-to-peer transactions. Simple cryptocurrency transactions are transactions involving only one input account address and one output account address. Shard ServerA server or network node responsible for executing transaction sharding. Input Account AddressAn account address that initiates a cryptocurrency transaction. Output Account AddressAn account address that receives a cryptocurrency transaction. Temporary Account AddressA temporary account address used as an intermediary in the transaction sharding process. Cryptocurrency FeeThe fee associated with processing a cryptocurrency transaction. BlockA block of data in a blockchain that contains multiple transactions. Hash AlgorithmAn algorithm that converts data input of arbitrary length into a hash value of fixed length. Hash value A fixed-length value generated by a hashing algorithm that represents a unique digital fingerprint of data. Blockchain ledger A complete record of all verified and added blocks to the blockchain. Wallet A digital wallet used to store, send, and receive cryptocurrencies. Cloud service provider A third-party entity that provides cloud-based blockchain services. Cloud-based blockchain services Transaction sharding and cryptocurrency transaction processing performed by a cloud service provider on behalf of a client. Service request A message sent to a shard server by a client requesting a cloud-based blockchain service. Service response A message sent back to a client by a shard server in response to a service request. Refund mechanism The process of returning funds to an input account if any simple cryptocurrency transaction fails. Payer account address An account address to pay crypto fees associated with a transaction shard. Entry points Another form of payment for accessing or using a transaction shard service. Cryptocurrency holding instruction An instruction to temporarily hold a specific amount of money in an input account or output account during the processing of a transaction. Electronic database A database used to store and index transaction details associated with simple cryptocurrency transactions. Federated server A network node that processes, records, maintains the blockchain, and verifies transactions. Cryptographic proof A cryptographically generated evidence used to verify the authenticity of a transaction or account balance. Chain identifier A unique identifier used to distinguish between different blockchains. Data Layer Servers Servers responsible for generating and managing data records in the blockchain data layer. Blockchain Data Layer The layer that stores structured data related to transaction shards and other transaction details. Data Records An entry in the blockchain data layer that represents a specific piece of information or event. Public Blockchain A blockchain whose transactions can be accessed and verified by anyone. Public Blockchain Ledger A complete transaction history of a public blockchain. Directory Blocks A block of data in the blockchain data layer that contains data records generated within a certain time frame. Entry A basic unit of data in the blockchain data layer that represents a specific data point. An entry block contains a block of data that contains multiple entries belonging to a specific chain or identifier. Time Window A specific time period used to group data records and include them in a directory block. Short Answer Question

What is transaction sharding and how does it solve the scalability problem of blockchains? Transaction sharding is the process of breaking down complex cryptocurrency transactions involving multiple inputs and outputs into multiple simpler, peer-to-peer transactions. This approach improves the scalability of blockchains by breaking complex transactions into more manageable chunks, reducing processing and verification time.

What is the difference between complex and simple cryptocurrency transactions? Complex cryptocurrency transactions involve multiple input account addresses and/or multiple output account addresses, while simple cryptocurrency transactions involve only one input account address and one output account address.

What role does a shard server play in the transaction sharding process? A shard server receives a complex cryptocurrency transaction, determines its complex accounting structure, and breaks it down into multiple simple cryptocurrency transactions. It then scatters these simple transactions to other servers in the network for processing.

What is the purpose of a temporary account address? Temporary account addresses are used as intermediaries in the transaction sharding process to simplify the transfer of funds between input and output accounts.

Explain how cryptographic fees are charged in the transaction sharding process. Cryptographic fees can be charged for various aspects of the transaction sharding process, such as authorizing, implementing, and processing simple cryptocurrency transactions.

What happens if one or more simple cryptocurrency transactions fail during the transaction sharding process? If any simple transaction fails, a refund mechanism can be initiated to return the funds to their original input account addresses, possibly subject to a fee.

How does transaction sharding improve the security and efficiency of e-wallets? Transaction sharding allows e-wallets to operate as a thin client because it does not need to process the logic of complex transactions. This reduces the resource requirements of the e-wallet and improves security by reducing the time spent processing sensitive data.

What is the role of the blockchain data layer in transaction sharding? The blockchain data layer stores structured data related to transaction sharding and other transaction details, providing a transparent and verifiable record of services that have been performed.

How can public blockchains be used to verify transaction sharding services performed by cloud service providers? Cryptographic proofs and data records related to transaction sharding can be published to a public blockchain as a timestamp and immutable record of service execution.

Explain the role of cryptocurrency holding instructions in transaction sharding. Cryptocurrency holding instructions ensure that specific amounts in input or output accounts are temporarily reserved while a transaction is being processed, thereby preventing transactions from failing due to insufficient funds.

Paper Title

Discuss the impact of transaction sharding on different blockchain architectures such as public, private, and consortium chains.

Analyze the pros and cons of using transaction sharding versus other scalability solutions such as sidechains, state channels, and sharding.

Study the impact of transaction sharding on cryptocurrency transaction speed, throughput, and latency.

Design a security framework that incorporates transaction sharding for processing cryptocurrency transactions. Consider factors such as data privacy, transaction integrity, and network security.

Explore the potential use cases and benefits of transaction sharding in decentralized finance (DeFi) applications such as decentralized exchanges, lending platforms, and stablecoins.