A blockchain that coordinates shard chains, manages staking and the registry of validators in a PoS cryptocurrency, such as Ethereum 2.0.
What Is a Beacon Chain?
The Beacon Chain lies at the core of Ethereum 2.0; it stores and manages the registry of validators and coordinates the shard chains. The Beacon Chain went live on Dec. 1, 2020 at noon UTC.
The Beacon Chain is a brand-new, proof-of-stake blockchain. It can be poetically described as the spine that supports the whole of the new Ethereum 2.0 system, the heartbeat that keeps the system alive, the conductor coordinating all the players. Another good metaphor is to think of the Beacon Chain as of a big lighthouse, rising above a blue sea of transaction data. It’s constantly scanning, validating, collecting votes and doling out rewards to the validators that correctly attest to blocks, deducting rewards for those not online and slashing the ETH rewards from malicious actors.
The key function of the Beacon Chain is to manage the proof-of-stake protocol itself and all of the shard chains. There are a number of aspects to this: managing validators and their stakes; nominating the chosen block proposer for each shard at each step; organizing validators into committees to vote on the proposed blocks; applying the consensus rules; applying rewards and penalties to validators; and, being an anchor point on which the shards register their states to facilitate cross-shard transactions. The important note though is that the Beacon chain cannot run smart contracts, that’s what the shard chains will be for.
The Beacon Chain is the coordination mechanism of the new network, responsible for creating new blocks, making sure those new blocks are valid and rewarding validators with ETH for keeping the network secure. Proof-of-stake has long been part of Ethereum’s roadmap, and addresses some of the weaknesses of proof-of-work blockchains such as accessibility, centralization and scalability. Instead of miners expending energy to validate blocks, randomly selected validators (each containing their stake of 32 ETH) propose new blocks, which are voted on by other validators.
With the Beacon Chain and proof-of-stake system now in place, the next stage of Ethereum 2.0 is establishing shard chains, which will upgrade Ethereum’s data capacity, making the network faster and more scalable. Ethereum 2.0 will spread the network load across 64 separate shards, with one Beacon Chain to rule them all.