Ethereum beacon chain: The turning point from PoW to PoS

What is a beacon chain?

The beacon chain is the core infrastructure of Ethereum's proof-of-stake consensus layer. In simple terms, it is the “command center” of Ethereum's new consensus mechanism—where all validators' staking activities, consensus decisions, and network coordination take place.

In December 2020, the beacon chain was officially launched, marking the first step for Ethereum towards transitioning to PoS (Proof of Stake). This is the most critical part of the major upgrades in the Ethereum 2.0 series, laying the foundation for the sustainable development of the entire ecosystem.

How Does the Beacon Chain Change Ethereum?

Before The Merge event, the beacon chain operated as an independent consensus layer in parallel. After the merge, Ethereum's consensus mechanism completely switched from proof-of-work (PoW) to proof-of-stake (PoS) — a groundbreaking change.

In the new system, validators (rather than miners) have become the guardians of the network. They need to stake ETH and earn staking rewards by validating transactions, processing data, and generating new blocks. This process is coordinated and managed by the beacon chain.

The End of the Mining Era

The most impactful change is — Ethereum no longer requires mining.

The introduction of the PoS mechanism means that traditional miners will completely lose their place. More importantly, with the complete disappearance of mining rewards, the issuance of ETH is expected to decrease by nearly 90%. This change has far-reaching effects on the entire Ethereum economic model and token supply.

Towards the Future: Solving the Scalability Trilemma

The beacon chain paves the way for Ethereum's subsequent scaling solution. According to the scalability trilemma proposed by Ethereum founder Vitalik Buterin, blockchains often can only satisfy two of the three characteristics of security, scalability, and decentralization at the same time.

To break through this predicament, a series of updates have been planned for implementation:

• The Merge: Completed, consensus mechanism switched to PoS
• The Surge: Increase transaction throughput
• The Purge: Optimize data storage
• The Splurge: Other network improvements

The common goal of these upgrades is to significantly improve Ethereum's transaction processing capacity without sacrificing security and decentralization. The beacon chain is the cornerstone of this technological evolution.