The consensus layer is the main foundation in every blockchain network, playing a crucial role in facilitating agreement between nodes regarding the true state of the blockchain. Without this agreement, networks like Ethereum 2.0 could suffer a downturn.
The consensus layer allows geographically dispersed computers in a network to reach agreement on which transactions and blocks are validated and the order in which they occur.
This agreement is critical to the accuracy and security of the blockchain. The consensus layer also provides a number of important services to the network, including timekeeping, randomness generation, staking operations, governance mechanisms, and others. Improvements to Ethereum's native consensus layer have been key to unlocking the potential for greater scalability, sustainability, and decentralization.
How Does Consensus Layer Improve Ethereum 2.0?
The transition to a new and improved consensus layer has resulted in a number of major benefits for the Ethereum blockchain following the merger. These improvements result in much better transaction speeds and capacity compared to the old proof-of-work system. Fees for users have also been slashed, opening up access to a wider audience.
This increase in the consensus layer also allows the network to more easily expand in the future as demand increases. In terms of security, the high cost for stakers to behave maliciously greatly reduces the likelihood of attacks.
The shift to proof-of-stake also means Ethereum 2.0 consumes an astonishing 99.9% less energy than before the merger. This supports the credibility and sustainability of the network in the future.
The level of decentralization has also increased significantly, as the barriers to participating as a validator securing the upgraded network are much lower compared to the expensive mining equipment previously required. This further solidifies Ethereum's position as a highly secure and resilient blockchain.
Proof-of-work relies on competing miners solving complex computational problems to add new blocks, which consumes a lot of energy. Proof-of-stake changes this by requiring validators to stake existing Ether coins to qualify for a random new block. The role of adding blocks and confirming transactions rotates between validators based on the size of their bets.
This consensus model provides strong financial incentives for good behavior in the form of staking rewards for honest validators who carry out their duties properly. However, validators also face penalties on their stakes for things like being offline, up to full deductions for malicious actions. Thresholds for penalties and deductions are adjusted based on the severity of the offense.
The Role of Beacon Chain in Ethereum Consensus Layer Update
Beacon Chain has literally laid the foundation for Ethereum's integrated proof-of-stake blockchain. Initially, the main goal was to manage the official registration of active validators and their stakes. But after integration with the existing proof-of-work execution layer, Beacon Chain is now solely responsible for securing the entire upgraded Ethereum 2.0 network under proof-of-stake consensus rules.
The Beacon Chain is tasked with coordinating and synchronizing data between the various parallel shard chains expected in future protocol updates.
Why Are Consensus Layer Updates Released Gradually?
Transitioning one of the world's largest and most popular blockchains to an entirely new architecture beneath it always requires careful implementation. Simply put, implementing large changes all at once can compromise stability and introduce risk. The gradual delivery of updates through the initial Beacon Chain, recent mergers, and future shard chains provides a lower risk roadmap.
Breaking the implementation into multiple releases allows for rigorous testing of each foundational element and time for bug fixes before introducing the next update pillar. Think of it like building a multi-story building in stages - testing the foundation first results in the strongest final structure.
The modular nature of this approach will also make updates simpler in the future. That is the explanation of the Consensus layer as the foundation of a blockchain network.
Read More:
What is Distributed Consensus?
What is Ethereum (ETH) 2.0 and how is it different from Ethereum
DISCLAIMER: This article is informational in nature and is not an offer or solicitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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