Introducing Beacon Chains and Eth2
In this section, we will discuss how the Beacon Chain works in Eth2, and the key components of the Beacon Chain client.
PoS in Eth2
You may remember that we analyzed both PoW and PoS consensus algorithms in depth in the Anatomizing blockchain consensus mechanisms section of Chapter 1, Blockchain and Cryptocurrency. We discussed the advantages and disadvantages of both algorithms. The main issue with PoW is that it is energy-intensive, has a high cost of mining, and is less scalable.
Eth2, originally known as Serenity, is planned to be the system’s final upgrade, as the entire network transitions from a PoW to a PoS consensus algorithm, and tackles fundamental questions such as scalability, economic finality, and security. It plans to fade out the PoW chain over time via the merge between Eth1 and Eth2.
In its simplest form, with PoW, miners invest in GPU an ASIC, and consume a large sum of electricity as the expense to perform the...