Closer Look At Beacon Chain – The Start Of Ethereum 2.0
BeaconChain the first stage of upgrade ETH 2.0. The Ethereum 2.0 roadmap involves interconnected protocol upgrades that will make the network more scalable, more secure, and more sustainable. These upgrades are being built by multiple teams from across the Ethereum ecosystem.
The Ethereum upgrades
Ethereum 2.0 is a new version of the ETH blockchain that will utilize staking to verify transactions using a proof of stake consensus mechanism. The ETH 2.0 upgrade process has a huge amount of work, so it is divided into 3 small stages: Beacon Chain, The Merge and Shard Chain.
What is Beacon Chain?
Baecon Chain is the first stage to upgrade ETH 2.0 successfully. The Beacon Chain is responsible for storing validator details, doling out rewards to good validators and slashing the ETH of bad validators. It also (randomly) selects a validator committee that votes to include/discard blocks proposed by the validators and oversees their performance. In a nutshell, the Beacon Chain enforces the rules established under the Proof-of-Stake (PoS) consensus mechanism.
The Beacon Chain is a ledger of accounts that conducts and coordinates the network of stakers. It isn’t quite like the Ethereum Mainnet of today. It does not process transactions or handle smart contract interactions.
Deployed on November 27, meaning the Beacon Chain started producing blocks on December 1, 2020, is the first stage to transition Ethereum from Proof-of-Work (PoW) consensus mechanism to Proof-of-Stake (PoS) mechanism. During this period, the Ethereum network will have 2 parallel chains, ETH1 (using PoW) and Beacon Chain (using PoS). During this phase, to participate in staking starts October 14,2020 users need to use a min of 32 ETH and cannot withdraw until the next stages are completed. Once The Merge happens, validators will be assigned to secure ETH Mainnet.
What will the Beacon Chain do?
The beacon chain doesn’t change the Ethereum you use today. You can still send ETH to a friend, swap tokens on MetaMask or Uniswap, play with your Axies, mint NFTs on Mintbase, and yield farm on your favorite DeFi protocol. Ethereum as you know it is still live and fully functional, and will continue to be so until it merges with the new Eth2 blockchain and becomes a separate shard. Meanwhile, a massive new structure is being built alongside Ethereum. The core of this structure is the Beacon Chain, which reforms the consensus model from Proof of work to Proof of Stake. The Beacon Chain is now alive.
The transition to proof-of-stake will make Ethereum significantly more secure and decentralized by comparison. The more people that participate in the network, the more decentralized and safe from attacks it becomes.
More about transaction Baecoin Chain: CLICK HERE
Relationship between Baecon Chain with The Merge and The Shard Chain
Beacon Chain and The Merge
The Beacon Chain, at first, will exist separately to the Ethereum Mainnet we use today. But eventually they will be connected. The plan is to “merge” Mainnet into the proof-of-stake system that’s controlled and coordinated by the Beacon Chain.
Beacon Chain and The Shard
Shard chain would contain a portion of the data and handle a portion of the transaction processing responsibilities. Shard chains are like a collection of mini-blockchains that operate independently, and to preserve security, each shard chain submits a record of transactions to the main chain (Beacon Chain) at regular intervals through the Validator Manager Contract (VMC). Sharding can only safely enter the Ethereum ecosystem with a proof-of-stake consensus mechanism in place. When merged with Mainnet will pave the way for sharding to help further scale Ethereum.
The effects of The Baecoin on the cryptocurrency market
The Beacon Chain, the backbone of Ethereum’s future Proof-of-Stake network with the first blocks on December 1, 2020 use Proof-of-Stake (PoS) mechanism. During this phase, to participate you need to stake 32 ETH and cannot withdraw until the next stages are completed. Currently the number is 13.2M ETH with 412k unique Validator. Get over 10% Circulating Supply of ETH.
Looking back at history, the amount deposited into the contract also increases the confidence of investors in Ethereum 2.0: Since the announcement of the deposit contract address in November 2020, the amount of ETH deposited has increased gradually. Get the 2M ETH by Jan 2021. Only in the next 2 months was the number 4M ETH. Looking at the price history, every time ETH 2.0 is successfully upgraded, ETH will have a new ATH. Despite the market pump dumps, the number of people trusting and depositing ETH continues to increase, showing great confidence in the success of ETH 2.0.
Lido leads with 4,140,448 ~31%, followed by Kraken with 1,120,480 ~ 9% and Coinbase with 1,018,528 ~8%. Going deeper, it can be seen that Lido (Lido Finance – the leading staking solution on Ethereum is leading, followed by two exchanges Kraken and Coinbase.
Recently with the news surrounding Celsius, Lido and ETH 2.0 affected the market by stETH. However, looking at the chart we can see that it does not affect confidence in the success of Ethereum 2.0, as indicated by the amount of ETH staked continues to increase.
Readmore about overview Roadmap Update Ethereum 2.0: CLICK HERE
So now we are in the 2nd phase -The Merge, but the ETH devs have faced many difficulties and had to delay the mainnet 7 times. They promise to mainnet in August 2022. When the manine succeeds Ethereum will enter a new era. Whether it will help ETH develop as much as Vitalik Buterin’s vision or not, it takes time to evaluate. Follow Coincu to get the latest information.
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