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The smart contract required for triggering the first phase of the long-awaited Ethereum 2.0  has secured enough funds to begin activation. The Ethereum 2.0 deposit contract met its threshold of 524,288 ETH, with just a few hours to spare, after more than 150,000 ETH were deposited within a 24 hour period. This secures the Beacon Chain genesis for 1 December 2020. The Beacon Chain is the first addition to the network, and will coordinate the network and introduce proof-of-stake to Ethereum.

Ethereum, the second largest crypto by market cap, and largest by nodes in operation, will begin the shift from a proof-of-work consensus mechanism, to a proof-of-stake consensus on 1 December 2020, with the hopes of solving various issues, including scalability. The transition to proof-of-stake will provide Ethereum with more security against coordinated attacks. In proof-of-stake, the validators securing the network are required to stake a significant amount of ETH, and if they were to try and attack the network, the protocol may automatically destroy their ETH.

The Beacon Chain activation is regarded as the first of four phases of the migration. It will begin with the introduction of validators, which will be followed by  the introduction of shard chains and the start of the transition from proof-of-work to proof-of-stake, allowing validators to create blocks on the blockchain. This will then lead to the full transition of all users and decentralised applications (dapps) to the new Ethereum 2.0 network.

Once the transition commences on 1 December, the network won’t yet be fully proof-of-stake, as it will take a considerable amount of time to move the entire network to the new POS algorithm.

The primary stakeholders of the Beacon Chain genesis at the Ethereum 2.0 launch will become validators. To become a validator, a user is required to stake a minimum of 32 ETH through the deposit contract, which will be locked up until phase 1.5. These validators will earn rewards on the network, in exchange for processing transactions and creating new blocks.

Feature image by Ahmet from flickr