Understanding Ethereum’s Pledge Deposits and Beacon Chain in 2021

On April 25th, according to data on the Tokenview chain, the current Ethereum pledged deposits have exceeded 19.25 million ETHs, and 1.67 million ETHs have been unlocked and withdrawn. Over the past week, the Ethereum Beacon Chain has pledged a total of 539000 ETHs.

Data: The cumulative pledge amount of Ethereum reached 19.25 million ETHs, with a total withdrawal of 1.67 million ETHs

Introduction

Cryptocurrency enthusiasts and investors often get introduced to different terms, technologies and trends in the industry. One of the latest buzzwords in the blockchain space is Ethereum’s pledged deposits and Beacon Chain. In this article, we will discuss the significance of these terms, and understand how the blockchain ecosystem is evolving with the use of these technologies.

What are Ethereum’s Pledged Deposits?

Before we dive into Ethereum’s pledged deposits, let’s first understand what Ethereum blockchain is. Ethereum is a decentralised blockchain platform that enables developers to build decentralised applications (DApps). To use the Ethereum platform, developers and users need Ether (ETH), the cryptocurrency that powers Ethereum.
Ethereum’s pledged deposit is a way to secure the Ethereum network and to earn rewards in return. It is a commitment by validators to stake a predetermined amount of ETH as collateral to validate transactions on the Ethereum blockchain. Validators are responsible for confirming the transactions on the blockchain and ensuring its safety and security.
Validators need to pledge a minimum of 32 ETH to participate in Ethereum’s pledge deposits. Ethereum’s pledge deposit system is based on proof-of-stake (PoS) consensus, which is much more eco-friendly compared to proof-of-work (PoW) consensus used by Bitcoin.
According to data on the Tokenview chain, current Ethereum pledged deposits have exceeded 19.25 million ETHs, and 1.67 million ETHs have been unlocked and withdrawn as of 25th April.

What is the Ethereum Beacon Chain?

The Ethereum Beacon Chain is the backbone of the Ethereum 2.0 network. It is a new chain that is running parallel to the existing Ethereum network. It is designed to make the Ethereum network more efficient, faster and cheaper.
The Ethereum Beacon Chain uses a PoS consensus mechanism that is different from the PoW consensus mechanism used by the current Ethereum network. The main advantage of the PoS mechanism is that it does not require a lot of computing power, as validators do not need to solve complex mathematical equations to validate transactions.
Over the past week, the Ethereum Beacon Chain has pledged a total of 539000 ETH’s. This shows that the Ethereum community is slowly but surely transitioning to Ethereum 2.0, the next phase of Ethereum.

Benefits of Ethereum’s Pledged Deposits and Beacon Chain

The main benefits of Ethereum’s pledged deposits and Beacon Chain are as follows:
– Increased scalability: The Beacon Chain enables the Ethereum network to process more transactions at once, without increasing network congestion.
– Improved security: The pledged deposits system ensures that validators have a vested interest in maintaining the security of the network.
– Reduced energy consumption: The PoS consensus mechanism used by the Beacon Chain is more eco-friendly compared to the PoW consensus used by Bitcoin.

Conclusion

Ethereum’s pledged deposits and Beacon Chain are innovative technologies that are designed to improve the Ethereum network’s performance significantly. The transition to Ethereum 2.0 is a crucial phase for the development and adoption of blockchain technology. With these new technologies, it is expected that the Ethereum network will become faster, more efficient and more secure, paving the way for a new era of blockchain-based applications.

FAQs

1. What is the difference between PoW and PoS consensus mechanisms?
– PoW requires validators to perform complex calculations to validate transactions, while PoS requires validators to hold a certain amount of cryptocurrency as collateral.
2. Can I participate in Ethereum’s pledged deposits?
– Yes, any user can participate in Ethereum’s pledged deposits by becoming a validator and pledging a minimum of 32 ETH.
3. How does the Beacon Chain improve the scalability of the Ethereum network?
– The Beacon Chain enables the network to process more transactions simultaneously without increasing congestion.