The Beacon Chain

The beacon chain doesn't change anything about the Ethereum we use today.

It will coordinate the network.

It introduces proof-of-stake to the Ethereum ecosystem.

You might know this as "Phase 0" on technical roadmaps.

Introducing staking

The Beacon Chain will introduce proof-of-stake to Ethereum. This is a new way for you to help keep Ethereum secure. Think of it like a public good that will make Ethereum healthier and earn you more ETH in the process. In practice, it will involve you staking ETH in order to activate validator software. As a validator you'll process transactions and create new blocks in the chain.

Staking is the act of depositing 32 ETH to activate validator software. As a validator you’ll be responsible for storing data, processing transactions, and adding new blocks to the blockchain. This will keep Ethereum secure for everyone and earn you new ETH in the process.

Staking and becoming a validator is easier than mining (how the network is currently secured). And it's hoped this will help make Ethereum more secure in the long run. The more people that participate in the network, the more decentralized and safe from attack it will become.

Setting up for shard chains

After Mainnet merges with the Beacon Chain, the next upgrade will introduce shard chains to the proof-of-stake network. These "shards" will increase the capacity of the network and improve transaction speed by extending the network to 64 blockchains. The Beacon Chain is an important first step in introducing shard chains, because they require staking to work securely.

Eventually the Beacon Chain will also be responsible for randomly assigning stakers to validate shard chains. This is key to making it difficult for stakers to collude and take over a shard. Well, it means they have less than a 1 in a trillion chance.

Mainnet and the Beacon Chain

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.

Mainnet will bring the ability to run smart contracts into the proof-of-stake system, plus the full history and current state of Ethereum, to ensure that the transition is smooth for all ETH holders and users.

The merge

It's important to remember that initially, the Beacon Chain shipped separately from Mainnet - the chain we use today. Ethereum Mainnet continues to be secured by proof-of-work, even while the Beacon Chain runs in parallel using proof-of-stake. The merge is when these two systems finally come together.

Imagine Ethereum is a space ship that isn’t quite ready for an interstellar voyage. With the Beacon Chain the community has built a new engine and a hardened hull. When it’s time, the current ship will dock with this new system, merging into one ship, ready to put in some serious lightyears and take on the universe.

Once the merge happens, stakers will be assigned to validate the Ethereum Mainnet. Mining will no longer be required so miners will likely invest their earnings into staking in the new proof-of-stake system.

Bibliography:

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https://ethereum.org/en/eth2/beacon-chain/⁠

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