What is Cosmos (ATOM): An Introduction to the Cosmos Blockchain Network
Cosmos is a decentralized blockchain ecosystem that enables developers to connect their blockchain to an interoperable network of other blockchains.
To fully appreciate Cosmos’ usefulness, it’s necessary to examine how other similar blockchain ecosystem ventures fail.
Bitcoin (Blockchain 1.0): When Bitcoin began in 2008, it was the first to use the blockchain only for the purpose of creating a peer-to-peer digital money. Due to the difficulty of developing a decentralized application on Bitcoin due to a variety of basic blockchain factors, a project such as Ethereum emerged with a solution.
Ethereum (Blockchain 2.0): Ethereum, the king of the castle since 2014, introduced smart contracts and the Ethereum Virtual Machine to the party, enabling developers to construct permissionless applications on top of its blockchain rather than needing to build their own.
Ethereum was created as a unified blockchain that serves as the foundation for a huge network of decentralized apps. Similarly, the Binance Smart Chain was. Additionally, Cardano. Additionally, Solana. Additionally, NEO. Each blockchain has distinct advantages (and disadvantages) over the others, and each caters to a certain group of developers and consumers.
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What if you want to create a decentralized application (dAPP) that utilizes ETH, NEO, and ADA?
The majority of blockchain ecosystems are incompatible with one another. This “my way or the highway” mentality has created friction and competitiveness among developers, but it has also spawned an industry of “interoperability” projects aimed at connecting various endeavors.
Additionally, blockchain 2.0 has limits in terms of scalability, usability, and sovereignty:
Scalability: Because Ethereum is limited to 15 transactions per second, gas prices might become quite expensive.
Usability: Because the EVM must support all possible use cases, it optimizes for the most common use case. Certain developers are forced to make concessions in order to fit the template.
Sovereignty: The ETH platform, for better or worse, rules all applications.
The Cosmos objective is to usher in “Blockchain 3.0,” allowing developers to create a network capable of effortlessly transmitting transactions to and from other nodes. This “Internet of Blockchains” would enable creators to retain sovereignty while also interacting with the broader blockchain ecosystem.
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Essentially, Cosmos (and competitors such as Polkadot) looked at the Blockchain 1.0 and 2.0 mess and said, “Let’s just start from scratch with the interoperability functionality.”
Thus, the Cosmos project is an ecosystem comprised of numerous blockchains that are intended to coexist and flourish harmoniously. This “Internet of Blockchains” that connects them all has enormous promise.
Everything is powered by the Cosmos ATOM coin.
Cosmos, as a proof-of-stake chain, utilizes ATOM to reward stakeholders and enable the operation of the network’s numerous applications.
The Cosmos (ATOM) Team’s Background
Cosmos was founded in 2014 by developers Jae Kwon and Ethan Buchman when they were developing Tendermint, the Cosmos network’s fundamental consensus mechanism. Additionally, the project received support from The Interchain Foundation (ICF), a non-profit organization based in Switzerland that invests in open-source blockchain projects.
The ICF raised $17 million through a two-week initial coin offering (ICO) for the ATOM token in 2017. Tendermint Inc would go on to raise an additional $9 million in 2019 in a Series A transaction.
Cosmos was launched in 2019.
Although the Cosmos original team disbanded in 2020, the project gained pace and now functions decentralized on a proof-of-stake network.
The Protocol for Inter-Blockchain Communication
The most significant Cosmos adaption is the Inter-Blockchain Communication (IBC) protocol, which enables users to trade digital assets and data across many sovereign, decentralized blockchains.
The Cosmos Hub serves as the network’s economic hub. It is effectively the hub of an interconnected universe of blockchains.
The Cosmos Hub’s products include the following:
Users can exchange digital assets across the Interchain with cheap transaction fees and rapid confirmation.
Connect chains via IBC links and decentralized bridges to other chains like as Bitcoin and Ethereum.
The hub might act as a custodian for digital assets from several chains.
The IBC connects Cosmos Zones to the Cosmos Hub, enabling information to flow quickly and cost-effectively–the majority of transactions on Cosmos cost $0.00.
All zones connected to the Cosmos Hub are interoperable, which means that any independent dapp, validator, or consensus mechanism can communicate with any other zone.
Tendermint:
Tendermint is the engine that powers the entire Cosmos machine, and it performs a multitude of functions.
To begin, it enables developers to quickly and easily create interoperable and operational blockchains. This lowers the entrance barrier for new developers looking to join the ecosystem.
The Tendermint Byzantine Fault Tolerance (BFT) technique enables a network of computers running the Cosmos software to maintain and secure the network, validate transactions, and add new blocks to the blockchain using the Tendermint algorithm. This consensus process is based on proof-of-stake (PoS) and requires validator nodes to power the blockchain and vote on network modifications by staking ATOM.
To become a validator in the Cosmos network, a node must be one of the top 100 nodes staking ATOM.
Finally, Keep an Eye on Cosmos (ATOM)
If Bitcoin established money as a monetizable network and Ethereum established computing as a monetizable network, Cosmos is one of the initiatives attempting to monetize the interoperability of different blockchains.
In other words, Cosmos is a blockchain development toolkit that enables developers to easily install their own blockchain for a specific use case and instantly connect it to a flourishing and rapidly growing blockchain ecosystem for a fraction of the cost of running on a network like Ethereum. It is more than simply another blockchain network; it is intended to serve as an environment and toolkit for the development of a variety of blockchains.
Cosmos does three tasks:
It enables developers to easily integrate their applications into a blockchain network through the use of Tendermint BFT and the Cosmos SDK. A world in which blockchains coexist peacefully!
Through the IBC, blockchains can transfer wealth while retaining their sovereignty.
Cosmos applications can scale without incurring enormous network fees. Lastly, Cosmos vs. Ethereum is a more accurate comparison than Cosmos vs Polkadot.
