Private Sharding for Business Explained
One of the key blockchain characteristics is its unique transparency that allows us to analyze all the transactions that are going on in the ecosystem. However, many enterprises working with sensitive private data or new technologies might find it really concerning.
To solve this issue, several companies would usually unite into a consortium and build a blockchain that would disclose only approved information. No need to say, it is a costly and long process to start from scratch, so, blockchain enthusiasts had to come up with another solution to make technology more business-friendly with scaling and privacy features among other benefits. It’s called private sharding. Let’s check out how it works on the NEAR protocol, and how it is different from the consortium solution.
This article was written with the help of Calimero private shard experts. Before diving in, please, check out our sharding basics explainer.
Private Sharding benefits
Private sharding makes blockchain more scalable and gives more opportunities to users. On NEAR, you can start your private shard with a node on AWS or AliCloud.
In comparison with the consortium model, this technology allows businesses to:
- Set control over the information publicity
- Reduce transactions costs (to make scaling easier)
- Create their own validators to process fast and free transactions
- Seamlessly reach compatibility with Dapps on Ethereum and many other Layer 1 protocols (in other words, private shards are EVM compatible)
Via special private sharding companies like Calimero, many of these features can be easily implemented with a comprehensive dashboard.
How does Private Sharding work?
Private Shards can call into public shards and vice versa. It works the same way as an ordinary cross-sharding routing, and no additional work is required from the developers’ side. Public contracts don’t even need to know they are interacting with private ones.
Private Shards can interact with each other via shared identity space. No need to reach out to the public blockchain, security is preserved.
Each private shard gets its own name, similar to domains on the web. For instance, Ana-Maria Hospital in Georgia and Saint-Patric Hospital in the US will have “anamaria.ge” and “saintpatric.com” accounts.
Inside their private shards, specific applications will get a sub-account. For example, they might use a special app to analyze the patient diagnosis: “analyse.anamaria.ge” and “analyse.saintpatric.com”. If they need to transfer the diagnosis analysis about a patient to one another, it would require a cross-private shard transaction. If a patient wants to make this data public, they can settle this info on the public chain.
All in all, this system enables businesses and users to interact in an easier way which makes NEAR blockchain so user-friendly.
Private sharding use cases
Business to business (enterprises)
For scaling or privacy purposes, Web3 businesses can move to a private shard or, as an option, transfer there only some parts of their businesses. Here are some solution examples:
- DAOs. Manage treasury and pay out the contributors via money streaming and bounties.
- Gaming. Improve in-game transactions and mechanics.
- DeFi. Create Dark Pools and scale a marketplace order book.
- Transportation. Verify the logs and make them interoperable between different parties of the supply chain.
Business to government
Imagine a private hospital and a public university. Their databases meet different requirements, so, in the consortium model, they would have to build two different blockchains that would not be able to connect to each other. They would not be interoperable. The university would not be able to get the student’s health data from the hospital.
On the NEAR blockchain, each of them can have a private shard with the ability to connect to the public blockchain and publish needed information there. That way a hospital might publish verified identities of the doctors with their education and working experience so a university from another country could get information about who examined their student at home.
