What is Shredded Storage?

Shredded storage is a new data platform improvement in SharePoint 2013 related to the management of large binary objects (I.e. BLOBS such as Microsoft PowerPoint Presentations, Microsoft Word Documents, etc.)

With Shredded Storage feature enabled, every document and the Changes made to the document, is stored in SQL as multiple “Shredded BLOBS“. Whenever a new Version of a document is Created, only the BLOBs of the document that Corresponds to the Change are saved as opposed to the entire document as a new version.This feature helps to lower down the amount of storage required for saving files.

How it Works - 
Every Document in SharePoint 2013 is now stored as multiple “shredded BLOBS” in the new “DocStreams” data table.Whenever a new Version of a document is created, a new Record is written in this data table that contains only the “Shred BLOB” of the original document that corresponds to the Change, merged with the new Changes.In other words a new Blob with Changes is added as a new row in the table.Each BLOB that gets added Contains a numerical Id that represents the source BLOB.At the end it is the job of BLOB Index to keep the track of Blobs and to create a full file with the Combination of entries that point to the unchanged shreds of the previous version(s) and the entries that point to the newly added Changed shreds.