Beacon Chain
The Beacon Chain is a ledger of accounts that conducts and coordinates the network of stakers. It isn't quite like the Ethereum Mainnet of today. It does not process transactions or handle smart contract interactions.
Introducing staking
The Beacon Chain introduced proof-of-stake to Ethereum. This is a new way for you to help keep Ethereum secure. Think of it like a public good that will make Ethereum healthier and earn you more ETH in the process. In practice, staking involves you staking ETH in order to activate validator software. As a staker, you'll run node software that processes transactions and creates new blocks in the chain.
The transition to proof-of-stake will make Ethereum significantly more secure and decentralized by comparison. The more people that participate in the network, the more decentralized and safe from attacks it becomes.
The Merge and the end of mining
While the Beacon Chain (or "consensus layer") is already live, it has existed as a separate chain from Mainnet (or the "execution layer") since its genesis. The plan is to swap out the current proof-of-work algorithm on the execution layer today and replace it with the proof-of-stake consensus protocol that the Beacon Chain provides.
The Merge will have an immediate and profound impact on the carbon footprint of the Ethereum network. It also sets the stage for future scalability upgrades such as sharding.