What is a Beacon Chain? Read the explanation

Beacon Chain functions as Ethereum's proof-of-stake (PoS) layer , governing consensus among Ethereum stakeholders responsible for validating and strengthening the network, all in exchange for staking rewards.

Get to know what a beacon chain is

Launched in December 2020, Beacon Chain represents the initial phase of Ethereum 2.0 , a comprehensive upgrade aimed at increasing Ethereum's capacity to sustainably manage transaction volume.

Although the Beacon Chain operates independently, running parallel to Ethereum's execution layer, it is expected to connect with the Ethereum mainnet in an important event known as The Merge.

After The Merge, Ethereum's consensus mechanism will undergo a permanent transition from proof-of-work (PoW) to PoS. Those interested in contributing to Beacon Chain validation can participate by staking their ether (ETH). As a validator who secures the network, responsibilities involve storing data, processing transactions, and adding new blocks to the blockchain.

The shift away from traditional block mining means that Ethereum miners will become obsolete over time. Additionally, token issuance via mining rewards will stop, resulting in an estimated 90% drop in ETH issuance.

Beacon Chain forms the basis for various scalability solutions, such as The Merge, The Surge, The Verge, The Purge, and The Splurge. These solutions aim to overcome the Scalability Trilemma, a concept proposed by Ethereum founder Vitalik Buterin.

The Scalability Trilemma suggests that a blockchain can only achieve two of three basic principles—security, scalability, and decentralization. A planned series of upgrades aims to enable Ethereum to cope with increasing transaction loads by increasing transaction throughput without sacrificing security or decentralization.

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