In the world of cryptocurrencies, sharding can reduce the network congestion as well as increase transactions per second through the creation of new chains
Sharding is the process of splitting a database horizontally in order to spread the load. This is a common concept in computer science.
In the world of cryptocurrencies, specifically in Ethereum, sharding can reduce the network congestion as well as increase transactions per second through the creation of new chains, which are known as shards.
To better define this, sharding refers to splitting the entire Ethereum network into multiple portions, i.e. shards. Each shard would essentially contain lots of its own independent states, and this means that a unique set of account balances as well as smart contracts are in it. Sharding is the most complex solution out there implemented within Ethereum.
Keep in mind that the information which is stored within a shard can still be shared across other nodes, and this keeps the ledger itself decentralized as well as secure due to the fact that everyone can still see all of the ledger entries. The shards simply do not process or store all of the information.
In other words, sharding can be a good way to scale if you want to keep things decentralized as an alternative to scaling up through increasing the size of the existing database. This would make Ethereum a lot less accessible for network validators due to the fact that they would need far more powerful as well as expensive computers. With shard chains, a validator only needs to store the prime or run data for the chard they are validating, and not the entire network. This can in turn speed things up drastically and reduce hardware requirements.