Beacon Chain

Understanding the Beacon Chain

The Beacon Chain is an essential part of Ethereum 2.0, serving as the storage and management system for validators and facilitating the coordination of shard chains. It was launched on December 1, 2020, at noon UTC.

As a proof-of-stake blockchain, the Beacon Chain acts as the backbone of the Ethereum 2.0 system. It plays a crucial role in keeping the system operational, functioning as a conductor that orchestrates various elements. An apt comparison is to envision the Beacon Chain as a towering lighthouse amidst a vast sea of transaction data. Its continuous scanning, validating, vote collection, and reward distribution to validators who accurately attest to blocks are vital. It also penalizes validators who are offline or engage in malicious activities by reducing their ETH rewards.

The primary function of the Beacon Chain is to manage the proof-of-stake protocol itself and oversee all shard chains. This includes managing validators and their stakes, nominating block proposers for each shard, organizing validator committees to vote on proposed blocks, enforcing consensus rules, applying rewards and penalties to validators, and serving as an anchor point for shards to register their states and facilitate cross-shard transactions. It is important to note that the Beacon Chain does not support smart contracts; this functionality is reserved for the shard chains.

The Beacon Chain acts as the coordination mechanism for the new network. It is responsible for creating and validating new blocks, as well as rewarding validators with ETH for maintaining network security. Proof-of-stake addresses the limitations of proof-of-work blockchains, such as accessibility, centralization, and scalability. Instead of miners expending energy to validate blocks, the Beacon Chain randomly selects validators (each with a stake of 32 ETH) to propose new blocks, which are then voted on by other validators.

With the Beacon Chain and proof-of-stake system in place, the next phase of Ethereum 2.0 involves establishing shard chains. These shard chains will enhance Ethereum’s data capacity, resulting in a faster and more scalable network. The Beacon Chain will govern and coordinate all 64 separate shards.