Ethereum 2.0 which has long been due has finally been announced today through ConsenSys’s official blog. The whole process of Ethereum 2.0 will contain four different levels of chains which include the existing Proof-of-Work (PoW) Main Chain of Ethereum, and add Beacon Chain, Shard Chains and Virtual Machine layer.
Ethereum 2.0 will begin with the deployment of Beacon Chain which is a proof of stake Blockchain. Beacon Chain is said to be completed by the end of 2018, with the main testnet in Q1 of 2019. The other two chains which are Shard Chains and Virtual Machine chain will be developed after Beacon Chain is deployed successfully.
What is Beacon Chain?
The key function of the Beacon Chain is to manage the proof-of-stake Blockchain along with all shard chains. Thus Beacon Chain acts as the main backbone of Ethereum 2.0 ensuring the right coordination. It helps manage the validators and their stakes, nominates the chosen block for each shard at each step, organises the validators into committees to vote on the proposed blocks and applies the consensus rules along with rewards and penalties to validators.
The Beacon Chain have the following functions:
- Managing Validators – a function that allows nodes to join the validator and make sure they are rewarded properly
- Proving Randomness – Its using the RANDAO way of combining contributions (individual random numbers) provided by different participants into a single output number.
- Block Proposers – A way of choosing the creator of the next block randomly
- Committees – A way of voting which blocks create the true history of the chain
- Rewards and penalties – A function designed to eliminate the bad actors (validators) that doesn’t respect the rules
- Crosslinks – Recording the ”combined data root” into a Beacon Chain block.
Shard Chain may be the most important factor in Ethereum 2.0 given that it helps improve the scalability of Ethereum.
However without the Beacon Chain, it won’t be coordinated efficiently, and so the whole process of Ethereum 2.0 is seen to be crucial for an end product that can help Ethereum get back in the favourites list of crypto enthusiasts. Sharding can be explained as the concept of breaking ETH network into hundreds, thousands or even millions of sub-chains so that they are collatable.
The final part of Ethereum 2.0 is the VM layer which will help in the execution of contracts and transactions.
You can read more about the active dev teams that are building Ethereum 2.0.
Image Source – Flickr
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