Interoperability has always been a critical issue in the world of blockchains. A lot of new blockchain-based projects have aimed at this issue, and Cosmos is one of them. Cosmos has gained significant popularity during its lifetime, and the most important reason is its unique functions. In this article, we will go through Cosmos and its native token called ATOM. Stay with us.
What is Cosmos?
Cosmos is an interoperability protocol that lets independent blockchains interact with each other. Cosmos was developed in 2016 on a protocol called Tendermint Core. Its final aim is to create a network of blockchains that are connected in a decentralized way. Cosmos is based on two fundamental factors: interoperability and scalability. These two factors are really critical and challenging, and projects that have succeeded to overcome them have become popular. Polkadot is another example of such projects. Blockchains like Cosmos and Polkadot are called the third-generation blockchains because they are one step further than the older-generation blockchains like Bitcoin and Ethereum.
Using Cosmos, there is no need to develop all Defi projects, non-fungible tokens, or decentralized exchanges on a single blockchain. Any project can be run on its unique blockchain. Finally, they can interact with each other through Cosmos.
Another important point about Cosmos is that it uses a proof-of-stake consensus algorithm. This is an important reason for its high scalability. Cosmos users can stake their ATOM tokens and earn rewards.
How does Cosmos work?
The core feature of Cosmos is its Inter-Blockchain Communication Protocol or IBC. As its name suggests, it is the protocol that lets decentralized applications interact. The foundation of Cosmos is Tendermint Core. Tendermint Core and Cosmos can’t be separated. Along with each other, they create the network we know as Cosmos today. To better differentiate them, we can consider Tendermint Core the software and Cosmos the blockchain. Another interesting innovation of Cosmos is its hubs and zones. They have been developed to reduce the costs and smooth the interaction of different blockchains. Zones are independent blockchains on Tendermint Core and hubs are blockchains that connect zones. A zone connected to a hub can access all zones connected to that hub. Hubs validate the transactions on behalf of the zones connected to them. The first and the main hub of Cosmos is called the Cosmos Hub.
And finally, as we previously mentioned, Cosmos uses a proof-of-stake consensus algorithm. Cosmos validators must stake their ATOM tokens. In return, an inflation rate that fluctuates between 7 % to 20% is allocated to their tokens. Besides, they earn the fees of ATOM transactions. When users stake their ATOM tokens, these tokens change to “active ATOMs”. If stakers do malicious activities or violate the rules of the network, they get punished through a process called “slashing”. This means that they lose a part of their staked tokens.
Who created Cosmos? The history of Cosmos
Cosmos was founded by two developers called Jae Kwon and Ethan Buchman. Jae Kwon is a developer who had participated in creating open-source projects. In 2013, he decided to enter the world of blockchains and proof-of-stake networks. He developed a protocol called Tendermint and published its whitepaper in 2014. Ethan Buchman joined Jae Kwon in early 2015 and he officially became the co-founder of Cosmos in 2016. In 2017, Kwon and Buchman founded a non-profit foundation called Interchain. Interchain ran a funding event for developing Cosmos and gathered 17 million dollars. The final version of Cosmos was released on March 13, 2019.
The ATOM token
Like all blockchain networks, Cosmos has a native token called ATOM. At the time of writing, ATOM is the twenty-sixth largest cryptocurrency by market cap, and each unit of ATOM is being traded at $8.95. ATOM’s all-time high goes back to October 2021 when its price exceeded 44 dollars. Cosmos has a market cap of more than $2,560,000,000.
Cosmos (ATOM) wallets
Like all cryptocurrencies, you need digital wallets to store ATOM. ATOM is a popular token and a lot of cryptocurrency wallets support it, including:
- Trust Wallet (software – mobile)
- Exodus (software – desktop and mobile)
- Atomic Wallet (software – desktop and mobile)
- Gaurda (software – desktop, mobile, and web-based)
- Math Wallet (software – mobile, web-based, and browser extension)
- Cosmostation (software – mobile and web-based)
- Ledger Nano X (hardware)
Cosmos is trying to develop a network that connects all other networks. Using Cosmos, the features of one blockchain is accessible to other blockchains and decentralized applications. Tendermint Core, Inter-Blockchain Communication protocol (IBC), hubs and zones, and proof of stake work as the foundations of Cosmos. In other words, Cosmos owes its popularity to these unique innovations. Today, tens of projects work on Cosmos and huge investment have been made on it. All these factors put together make us believe that we will hear more about Cosmos in the future.