- The speed of processing transactions is very fast
- Cosmos Engagement is extremely high
- Cosmos Has Credible Use Cases
- DeFi Is Coming To the Cosmos Network via Gravity
- Cardano uses separate layers for settlement and computation
- Cosmos Facing Competition from Newcomers
- Problems with Staking
Despite the dearth of standardized regulations and govt norms for the cryptocurrency sector, there is no stopping its growth! The skepticism and unregulated environment notwithstanding, the number of cryptocurrency users is going up, globally. Every month you read about newer crypto tokens being launched, almost. This also makes things somewhat tedious and chaotic for beginners in this sector. There are so many crypto coins and how to figure out which one is best suited for your needs?? This is where Cosmos steps in. The blockchain network Cosmos (ATOM) is unique. It does not aspire to become the top crypto token. Its aim is to use unique protocols to bring the industry on the same platter.
What is Cosmos (ATOM)?
Cosmos can be defined as a network made of blockchain networks. The developers fondly call it the “Internet of Blockchains.” This project wants to create an environment in which separate blockchains can communicate with one another smoothly. If the different Blockchain networks can communicate and share data freely it will be good for reducing friction in this sector. However, do not think of Cosmos simply as a bridge between varying types of blockchains. It also comes with a broad suite of products and some impressive features.
The developers can create complex blockchains in their ecosystem within a short time span. That is why Cosmos has got a thriving Dapp community. Its Market Cap now stands at a staggering $7.5 billion.
A brief history of Cosmos
Jae Kwon, a famous blockchain developer introduced Tendermint in 2014 and he joined hands with respected crypto developers, Ethan Buchman and Zarko Milosevic. In 2017, Cosmos came into being through an ICO. In late 2018, the major testing of the network commenced.
Cosmos is managed mostly by a Swiss NGO named the Interchain Foundation and the Tendermint team. While Former CEO Jae Kwon is not in his position now, he has promised support. Cosmos has attracted investment from the likes of 1confirmation, Paradigm, Bain Capital.
The problems Cosmos aims to address
Cosmos has the objective of resolving the long-standing issue of lack of interoperability in the Blockchain sector. The industry encompasses a massive range of services and functionalities but each Blockchain operates in its own way. This affects the market’s overall ability. Through Cosmos, separate blockchains can coexist and this helps both the developers and end-users. Cosmos even enables different blockchains to utilize the capabilities of other platforms for usability enhancement.
Cosmos is a fully customizable platform. With it, developers can set up new blockchain applications as well as platforms. However, the Cosmos network lacks any central entity. So, the network facilitates inter-blockchain transactions and developers are able to share data and tokens.
The working mechanism of Cosmos
Cosmos makes use of a set of open-source tools to enable interoperability between varying types of blockchains. The protocol monitors these blockchains in an autonomous manner. In its ecosystem, each such network is called a zone.
- Zones- Zones enjoy full network functionality. These blockchains function as independent networks and they are able to facilitate transactions of varying types.
- Cosmos Hub- This is where the varying kinds of blockchains meet. The Cosmos Hub serves the purpose of an intermediary. This hub maintains a record of the zone.
- Layers of Cosmos- The Cosmos ecosystem makes use of 3 layers to assimilate the entire Blockchain sector. These are – Application layer, Networking and Consensus Protocol.
- Cosmos uses The Tendermint BFT engine which is a PoS governance mechanism. It is a practical Byzantine Fault Tolerant or (PBFT) algorithm based method.
- Inter-Blockchain Communication Protocol- Through the Inter-Blockchain Communications protocol, the various zones in Cosmos ecosystem can interact with the Cosmos Hub. Owing to this protocol, all information stays safe.
- Cosmos SDK- The Cosmos software development kit enables developers to create blockchains without coding from the ground up. Developers can save time by using plug-ins. It can be compared with a website builder.
- Cosmos (ATOM) Nodes-The users of a PoS network earn passive income by staking their crypto. The top 100 stakers become nodes. Nodes also get voting power.
What is ATOM?
ATOM is Cosmos network’s native cryptocurrency. It is used mainly for making smart contracts and executing transactions. New ATOMs are created as network validator rewards whenever a block of transactions gets approval. Now, there are over 200000000 ATOMs in circulation.
How can you store ATOM?
Storing the native crypto token of Cosmos is simple. You may make use of a mobile or desktop crypto wallet. The Atomic Wallet is there as well. However, using a hardware wallet is ideal. You may use the Ledger Nano X and S both of which support ATOM.
Should you buy ATOM?
ATOM has witnessed significant growth and 2021 has proved to be a year of growth for it. Some famous projects have been built with Cosmos such as the Crypto.com Coin and the Binance Chain. Its price surge has been triggered by factors like interoperability with Bitcoin, integration with Ethereum, the unveiling of the Defi interface. For serious crypt sector investors, ATOM remains a viable option.
A few factors that can hinder growth of Cosmos
While Cosmos has been receiving rave reviews from industry veterans and users from all quarters, a few factors remain that may thwart or at least slow down its growth prospects.
- Cosmos and other cryptocurrency platforms are likely to face the heat of increased regulation-and industry experts think it is somewhat inevitable. While regulation can boost investor confidence, if it is not deployed well that can bottleneck growth of a nascent sector. Naturally, such regulations may impact crypt prices adversely.
- Another thing is some crypto token made using the Cosmos network like the CRO and BNB earn own fees. This is in stark contrast with Ethereum. The Cosmos team is now trying to augment ATOM’s own utility and earning methods.
- The possibility of other interoperability focused blockchains overtaking ATOM is always there.
Summing it up
As cryptocurrencies get into a mainstream segment, the interoperability issue is getting more attention. While many blockchains still operate in isolation, it would be better if they are able to work together. The cryptocurrency segment needs Cosmos. To facilitate mainstream adoption and reduce hurdles, the crypto sector requires some type of unification and this is what Cosmos provides. It has already served as the fuel powering some of the most promising crypto sector projects.