A decorative piece, fun.
Step 1: Start With a Beacon
Start with a functioning beacon with a base made of suitable materials: diamond, gold or iron. My example has a 3 x 3 iron base. As long as the beacon lights up, any variation is functional.
Step 2: Add Color
You may expand this model as you see fit. In my example I have tried to recreate the 7 traditional rainbow colours, Red, Orange, Yellow, Green, Blue, Indigo and Violet. If you have no idea how piston feed takes work, never mind and copy my example exactly.
These are stained glass blocks. If you didn't know, hold shift to place blocks without interacting with the beacon.
Step 3: Build a Frame
Add a border as shown and pistons (non-sticky). The gap is left intentionally for toggling the piston feed clock on and off.
Step 4: Wire Up a Clock
If you don't know what a clock is, it's a circuit that runs on loop. This feed system powered one piston at a time, around a circle. I've found that the best interval for this setup is five ticks; one repeater set all the way back to four ticks and another set to the default one tick. If you are copying my design, all the repeaters are facing a clockwise direction.
Step 5: On/Off Pistons
The Inner piston will cover ad uncover the beacon, effectively cutting the beam on and off. The outer piston will open and close the clock. These will allow the rainbow beacon to turn on and off. I guess this is optional.
Step 6: Make the Switch
This is how a switch can be added, there is a torch at the end of the redstone line, as indicated. This gives the "beacon blocking" piston "ON" or "blocking" as the default position.
The sticky piston to the right of the lever is part of a signal length shortener. The repeater is facing away from the piston and is set to two ticks (the minimum signal length for a piston to function).
The lever cannot be replaced by a redstone line. Where, the dot of redstone before the piston is must be a signal towards the piston. replace it with a repeater facing into the piston if you want to put the lever elsewhere.
You may now test the circuit. While the rainbow beacon is now functional by itself, you will notice that the beacon beam will flash white between the color changes. This is due to a bug that makes moving blocks "invisible". The next few steps will fix this.
Step 7: Another Layer
Build another layer of stained glass blocks, pistons and border. This second layer will be similar the the lower one however, this clock will run a tick slower. This fixes the problem by making sure that there is always a stationary block over the beacon.
Step 8: Wire Up Another Clock
Bring the signal up using top half slabs. Top slabs can have redstone above and through them, solid blocks won't work. The repeater immediately after the slabs is set to one tick.