Updated: Dec 20, 2019
Cosmos is a decentralized network of independent blockchains. Its creator, All In Bits Inc (dba Tendermint Inc), aims to make the ecosystem a foundation for the next generation of internet technology. Cosmos, instead of participating in various divisions in the crypto faction, attempts to bring all of them together, enabling currency exchanges, interoperability, and an Internet of Blockchains (IoB). ATOM is the native coin used by the network for staking and tokenizing transactions.
This guide will talk about the purpose for which, Cosmos (ATOM) was designed, the team behind it, how it works, and various applications and uses.
What is Cosmos Designed For?
Cosmos’ software development toolkit was designed by the founding team, to lower the barrier of individual entry into blockchain development and to build a decentralized field for individual and unique chains, for better communication.
The platform was designed to address some of the hardest blockchain problems – scalability, usability, and interoperability. These programs were solved by the three-pronged approach - Tendermint BFT, Cosmos SDK, and Interblockchain Communication (IBC).
The vision of ATOM’s creators was to make it easy for developers to build blockchains, by breaking the barriers between different chains and allowing them to transact. The end goal of Cosmos is to create a decentralized network of blockchains that can communicate freely.
Who Is the Team Behind Cosmos?
Cosmos was initially the brainchild of Jae Kwon in 2014, who was later joined by Ethan Buchman in 2015. Kwon is the CEO and founder of Tendermint, which has been contracted by the Interchain Foundation (ICF) for development.
Kwon has an earlier co-founded productivity app for teams, called “I done this”. He has also made numerous significant contributions to some big projects including Scramble.io, Yelp, and Flywheel networks.
How Does Cosmos Work?
ATOM is not mined like other cryptocurrencies. Instead, it is earned via a hybrid PoS algorithm. The crypto coin is accepted on numerous cryptocurrency exchange markets, including BitForex, Binance, Huobi Global, Kraken, Dcoin, Bibox, and OKEx. Trading pairs for ATOM include ETH, BTC USDT, and fiat currencies such as EUR and KRW.
The hybrid PoS algorithm dictates a node to become a transaction validator, based on the number of ATOM tokens staked. The more tokens you stake, the better your chances of becoming a validator node and earning more coins. However, participants can also delegate their tokens and receive a portion of the token rewards.
Cosmos algorithm immediately removes nodes that are found to be acting dishonestly. ATOM balance for that particular node is held for 21 days, after which the staked coins are destroyed.
Individual chains in the network representing intranets, decentralized applications, and others are divided into unique zones and connected through the Cosmos hubs. These hubs validate various transactions and enable the transfer of data and value.
The beauty of the Cosmos sandbox environment is that each chain can pick and choose its independent governance. All of them have their software stacks, which are rooted in the Cosmos SDK through Tendermint Core and are not affected by other zones.
What are Current and Future Applications of Cosmos?
ATOM tokens with a value of over 40 million USD are traded daily, across a variety of exchanges. However, the ATOM is not designed to be a store of value or used as a medium of exchange. It is intended to be used purely for staking purposes on the Cosmos blockchain. Cosmos can be used to build several decentralized blockchain-based applications. You can easily launch your new blockchain and connect with other existing chains in the Cosmos network.
Several application-specific blockchains have been built using Cosmos. These are:
Lino Network – a value-sharing content economy where content creators and viewers are incentivized fully and fairly.
Playlist – attempts to tokenize the music industry with their PLAY protocol.
Loom – This is a Layer 2 scaling solution for Ethereum, built for highly-scalable games and user-facing Dapps.
Binance Chain – developed by Binance, this application serves the basis for the decentralized exchange.
IRISnet - is a BPoS blockchain designed to be the foundation for all next-generation distributed business applications.
TruStory – is a revolutionizing social app for experts that identifies a piece of information to be true or untrue in return for tokens.
Both Cosmos and Tendermint are some of the more interesting projects in the crypto sphere. They are bringing a whole new level of interoperability and scalability to blockchains. This is something that is desperately needed in the industry right now. However, only time will tell how ATOM and Cosmos hold up to competitors, like AION, Cardano, and ICON among others.