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If you move in the world of cryptocurrencies you will know that there are countless projects capable of moving the world. Sometimes we only look at the top ten coins in terms of market capitalization, however, there are some projects worthy of being studied and known. That is why today we will tell you all about what Beacon Chain is.
To get an idea of the importance of this project, we should know that Beacon chain is a new blockchain that has PoS or Proof of Stake. This algorithm implements the Casper FFG consensus protocol.
The Beacon Chain was one of the blockchains launched on the Ethereum network with the goal of accelerating the adoption of Blockchain technology at the enterprise level. This network helps the development of the Ethereum network as it would result in enterprises to start using the Ethereum network in a secure and scalable way.
Simply put, it sits at the core of Ethereum 2.0 storing and managing a registry of validators while coordinating shard chains.
Why was Beacon Chain created?
This was one of the most anticipated enhancements to Ethereum. Beacon Chain went live on December 1, 2020 and its start meant a before and after for the platform. This is because Eth2’s Beacon Chain ensures increased scalability and its capacity across the network.
The benefits of Beacon Chain go beyond the Ethereum network, since as we mentioned above, it boosts the adoption of blockchain technology in companies. Moreover, this chain is a further step in the development of Ethereum 2.0 as it represented phase 0 of the planned evolutions in that project.
The Beacon chain was created under several definitions, including the backbone that supports the entire new Ethereum 2.0 system, the engine that keeps the system alive and the coordinator of all the parts. Below we will see how this novel system works.
How does the Beacon Chain work?
The Beacon Chain is continuously scanning, validating, collecting and collecting certain rewards for validators who correctly check locks, decreasing rewards for users who are not online and for users who act maliciously.
The main function of this blockchain is to manage the Proof of Stake protocol and all the shard chains in the Eth2 network. This job entails functions such as managing the validators and their stakes and naming the chosen block manager on each shard and at each step.
Through the Beacon Chain, validators are organized into committees where they vote for the proposed blocks, applying the rules of consensus and applying the necessary rewards and sanctions to the validators themselves. In addition to all these functions, which are not few, this chain works as an anchor point where the shards register their states facilitating cross-shard transactions.
It should be noted that, despite being able to execute so many functions, it is not possible to execute smart contracts. Instead, fragment chains will be used.
Another important aspect to keep in mind is that the blocks do not store account balances or token locations or the status of dApps or any information stored by the Proof of Work blockchain. On the other hand it is capable of storing the list of validators, committee votes and the statuses of the so-called “shards” or fragments in Spanish.
What components make up the Beacon Chain?
The Beacon Chain has countless functions. Therefore, it is composed of various tools that help to carry out each task. Among these tools are:
- Block Proponents. While the Beacon Chain manages its own PoS protocol there are block proponents that are chosen randomly in order to prevent them from manipulating the blockchain data.
- Committees. Committees are made up of sets of validators called “Attesters”. These are chosen at random and vote on which blocks will be validated. The validators within each committee cast an up or down vote in a maximum time of 6.4 seconds. The Beacon Chain counts the votes per committee and validates the winning block.
- Randomness generator. The Beacon Chain is responsible for generating randomness throughout the system. To maintain it, a distributed, verifiable and indispensable source of randomness is needed.
- Rewards and penalties system. This is another of the main functions of the Beacon Chain. This system works by tracking and updating validators’ deposits.
- Cross-linking. When a block reaches a sufficient number of votes by a committee it can be added as a cross-link in a Beacon Chain block.