Every crypto enthusiast has come across the fact that Ethereum is transitioning from its proof of work consensus mechanism to proof of stake. Beacon Chain is the brand new proof of stake blockchain which will lie at the core of the Ethereum upgrade, managing the registry of validators as well as coordinating the shard chains. The beacon chain can also be called the backbone of the Ethereum 2.0 upgrade.
Beacon chain is constantly validating and collecting votes. It doles out rewards to validators who have correctly attested the block and deducts rewards from those doing malicious activities. The primary function of Beacon Chain is to manage the proof of stake protocol itself and all the shard chains. However, Beacon Chain is incapable of running the smart contracts; the shards are used for the same. It is the coordination mechanism for the new network helping in the creation of new blocks and ensuring that these blocks are valid. Once it’s verified, it then rewards the validators with ETH for keeping the network secure.