What is Cosmos?
What Is COSMOS?
The Cosmos Network is a decentralized network, of scalable, independent, and interoperable blockchains. As the self-proclaimed, “Internet of Blockchains” Cosmos aims to enable different blockchain networks to coexist and communicate with each other. In today’s world, we see a state of constant competition among different networks, and we see that each blockchain is in itself a world on its own. These blockchain networks are isolated and have little to no communication with the outside world. This is where Cosmos comes in.
By allowing different networks to communicate, and cooperate, the need to have ruthless competition among these networks is reduced. Furthermore, it allows the sharing of data and transactions among these networks which further enhances the capability and real-life application of blockchain networks. Cosmos also offers a streamlined development process that allows users to create their own custom blockchain within a few weeks when otherwise it would take several years to do so.
Who Created COSMOS?
The parent company of Cosmos is a California-based software company, All In Bits Inc, which is commonly known as Tendermint. The founder of Tendermint Inc, is Jae Kwon, a prominent computer scientist. It was created in 2014. Jae Kwon also created The Interchain Foundation in 2016, which is a Swiss Non-Profit, and eventually became the launching pad for Cosmos, as the ICO of its ATOM token was hosted on the Interchain Foundation. This ICO raised over $17 million within 29 minutes. The Cosmos mainnet launched in March of 2019. In February 2020, the team behind Cosmos split, and Jae Kwon stepped down as CEO. In February 2021, Cosmos launched Stargate. This included its first public release of its Inter-Blockchain Communication (IBC) Protocol.
How it Works?
The Cosmos network can be divided into three layers in terms of function. These layers include the Application layer, the Networking layer, and the Consensus layer. The Application layer is responsible for processing the transactions that take place on the network and then update the state of the network. The Networking layer allows for communication and data sharing between different blockchains, which is the crucial function of the Cosmos network. Finally, the Consensus layer involves the agreement of all the nodes on the current state of the system.
The functions of these three layers are achieved through the use of certain open-source tools. The most essential part that makes this layered architecture work, is the Tendermint BFT engine. This allows developers to build blockchains easily, without coding them from scratch. Tendermint BFT is also an algorithm that allows the nodes to secure the network, add blocks to the blockchain and validate the transactions. This algorithm can connect to the applications on the network through a protocol known as Application Blockchain Interface.
The most central aspect of the Cosmos network is known as the Tendermint Core. It is a Proof-of-Stake governance mechanism that keeps the distributed network of nodes in sync. In order to become a validator node, a user has to stake ATOM. However, the catch here is that the validator has to be in the top 100 of nodes, in terms of the quantity that they stake. Only the top 100 nodes can become validators. The voting power of a validator node is determined by the amount of ATOM that they have staked. A great feature for those users with lesser funds is that they can delegate their ATOM tokens to other validators, and earn a share of the rewards. Similarly, the validators are incentivized to perform honestly, as users have the freedom to delegate their ATOM elsewhere if the performance of the validator is not up to the mark.
Another important aspect of the Cosmos network is the use of Cosmos Hubs and Zones. The Cosmos Hub was the very first blockchain to be launched on the network. It was built to be an intermediary between all the different blockchains that were present on the network. All the independent blockchains that exist on the network are known as zones, these zones can function on their own. These functions include transactions, creating and distributing tokens, and implementing changes to its own blockchain.
The Cosmos Hub is connected with all the Zones, via an innovative system known as the Inter-Blockchain Communication Protocol, also known as IBC. This system allows information to flow freely and securely throughout all the connected zones. This means that when a zone is connected to the Cosmos Hub, then it becomes interoperable with every other zone present on the network. In simple words, it means that blockchains with completely different applications, validators, tokens, and even consensus mechanisms can freely exchange data. The final important tool of the Cosmos network is the Cosmos Software Development Kit (SDK). The Cosmos SDK allows developers to build blockchains using the Tendermint consensus algorithm. It makes the whole process of creating a blockchain much easier as it offers the most common functionalities that are used in blockchains, such as governance, tokens, and staking. If the developers desire to add other functionalities then they may do so by creating additional plugins. The most noteworthy project that was created using Cosmos SDK is The Binance Chain, which is a project of Binance Labs.
What is ATOM?
ATOM is the native cryptocurrency of the Cosmos network. The users who hold ATOM are entitled to governance rights, which means that they can vote on proposals that are put forward for the development of the network. ATOM also represents the transaction of value across the network, and as such it is used to pay for the transaction fees. Finally, the most important purpose of ATOM is to reward the nodes, who validate the transactions on the blockchain. For this purpose, more and more ATOM is minted by the network to provide rewards to the nodes. At the time of writing, almost 278 million ATOM have been created thus far.
Concerns
The biggest concern regarding Cosmos is the immense competition it has to face. First of all, it joins a list of projects that are trying to become so-called “Ethereum Killers”. However, the level that Ethereum has reached, and the potential growth that it will see after the launch of Ethereum 2.0, make it hard to predict if any of these projects will ever come to the level of Ethereum. Its competitors in this race include Polkadot and Cardano. Both are highly ambitious and promising projects and it remains to be seen, which among these will become the next big thing.
Furthermore, bridge projects like Badger, Ren, and even sidechains like Polygon, aren’t exactly a direct competition to Cosmos, but they are likely to take away many users from the network. Another concern regarding Cosmos is that there are regulatory concerns regarding its ICO. Whether it becomes a lasting problem or not, it remains to be seen.
Where to Buy ATOM
ATOM can be acquired on exchanges like KuCoin or Binance, similar to how you would buy any other cryptocurrency. You can either place a market buy or a limit buy. With a limit buy, you determine the price you’re willing to pay, and your order gets filled once the token price reaches your set limit price. If you want to get your hands on the token quickly, you can place a market order, where you agree to pay the current market price and have your order filled almost instantly. If you are interested in trading ATOM, you can do so by visiting KuCoin
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