# Hash-Based Sharding

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To efficiently distribute transaction data across the network, Teranode employs a technique known as **hash-based sharding**. Each transaction is assigned a unique identifier through the **SHA-256 hashing algorithm**, which ensures that every transaction ID is distinct and minimizes the risk of collisions.

The sharding process involves:

1. **Hashing the Transaction**: Each transaction's inputs, outputs, and metadata are hashed to generate a unique transaction ID.
2. **Distributing Data**: The transaction ID is used to determine which shard (or node) will store the transaction data, ensuring an even distribution across the network.
3. **Scalability**: This method allows Teranode to achieve a throughput of approximately **3.5 million database transactions per second**, accommodating the influx of one million Bitcoin transactions while efficiently managing updates and deletions.

By utilizing hash-based sharding, **Teranode enhances its scalability and performance**, making it well-suited for high-demand environments.


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