Ethereum's scaling bottleneck can be addressed through sharding, a technique that divides the blockchain into smaller, parallel shards. Each shard processes its own transactions and smart contracts, significantly increasing throughput. By distributing the workload, sharding reduces congestion and lowers gas fees, improving user experience. Ethereum's roadmap includes sharding as a core upgrade, complementing Layer 2 solutions like rollups. While sharding enhances scalability, challenges like cross-shard communication and data availability must be resolved to ensure security and efficiency. With proper implementation, sharding could enable Ethereum to handle thousands of transactions per second, making it a robust platform for decentralized applications.