Beacon Chain
In short: The Beacon Chain is the coordination chain of Ethereum 2.0, the name once used for Ethereum’s move to proof of stake.
The Beacon Chain is the coordination chain of Ethereum 2.0, the name once used for Ethereum’s move to proof of stake. It launched as a separate proof-of-stake chain, later merged with the original Ethereum chain in the upgrade known as the Merge, and now serves as Ethereum’s consensus layer.
Why it matters
The Beacon Chain keeps track of validators and the ETH they have staked. It divides time into slots and epochs, randomly selects validators to propose blocks, collects their votes, called attestations, and decides when blocks become final. It also applies rewards and penalties, including slashing for validators that sign conflicting messages. For users, this is the machinery behind ETH staking and behind the finality that many exchanges and apps consider before treating a transaction as settled.
Example
A user who stakes ETH runs a validator. In some slots, the Beacon Chain chooses that validator to propose the next block, and in every epoch it assigns the validator to attest to blocks proposed by others. Honest, timely participation earns rewards, being offline costs small penalties, and signing two conflicting blocks can lead to slashing and forced removal from the validator set.