In cryptocurrencies, parallel execution usually refers to the simultaneous processing of several transactions at once. The concept is strongly related to parallel computing, which involves running several processes simultaneously to increase productivity and performance. It is also referred to as parallelization.

Parallel execution differs from serial/sequential execution which involves orderly execution of transactions. Blockchains like Ethereum use serial execution.

Solana is the first blockchain to experiment with parallel execution. Other EVM-based chains building on the concept of parallelization have emerged since then. Some are Sei, Sui, and Monad (not yet live).

Types of Parallel Execution

Transaction Parallelization: Blockchain networks frequently sequentially handle transactions. In this case, parallel execution refers to investigating ways to validate and handle several transactions simultaneously, increasing the network's performance.
Consensus-Level Parallelization: In proof-of-work (PoW) or proof-of-stake (PoS) consensus mechanisms, the steps involved in reaching consensus (e.g., block validation) could be parallelized. This could enhance the efficiency of reaching consensus and reduce block confirmation times.
Smart Contract Parallelization: In platforms that support smart contracts, parallel execution could involve the simultaneous processing of multiple smart contracts. This can enhance the overall efficiency of decentralized applications (dApps) on the blockchain.

Different Approaches to Parallel Execution

Sharding: Sharding is a process of splitting a blockchain into smaller parts called shards, and each shard can process transactions independently. Sharding is a form of parallel execution that aims to improve scalability by allowing multiple parts of the network to work in parallel.

An example of a blockchain looking to implement sharding as a form of parallelization is Shardeum.

Pipelining: Pipelining is a method in which several instructions (or transactions) are executed simultaneously. Pipelining improves the flow of instructions overall. Monad aims to take the pipelining approach.

One important benefit of parallel execution is improved throughput. Parallel execution allows for multiple transactions to be processed at once, hence, increasing a blockchain’s transaction-per-second (tps) rate.