The cryptocurrency market has been on a remarkable growth trajectory with a Compound Annual Growth Rate (CAGR) exceeding 6.5% globally over the past couple of years. This substantial growth reflects its increasing preference over traditional currencies and foreign exchange markets on a global scale. The backbone of the crypto market is undeniably the blockchain technology, which has empowered and facilitated its widespread adoption. However, for the crypto market to reach its full potential, a crucial element called “interoperability” must be addressed, where blockchains need to seamlessly communicate with one another. One of the pioneering solutions to this challenge is Cosmos.
Cosmos has already established itself as a major player in the crypto and blockchain industry, securing partnerships with some of the largest cryptocurrencies. As blockchains exist as distinct ecosystems, achieving inter-chain communication poses a significant challenge. The goal of linking these blockchain universes and their respective cryptocurrencies is to create a unified and well-organized system that simplifies trading and investing. Cosmos has taken up the mantle of addressing this issue, generating substantial enthusiasm within the crypto community. As a result, more and more individuals are delving into the realm of cryptocurrencies and gaining a deeper understanding of blockchain technology.
Now that we have provided a brief introduction to cryptocurrencies, blockchains, and the role of Cosmos, let’s delve deeper and explore everything related to Cosmos.
What is Cosmos Blockchain?
Cosmos, often referred to as the “Internet of Blockchain,” is built upon two fundamental principles: interoperability and customization. These distinguishing features make Cosmos stand out among other blockchain platforms. At its core, Cosmos aims to establish a decentralized and highly optimized ecosystem capable of effectively managing diverse crypto blockchains.
Cosmos operates independently by creating distinct blockchain systems called “zones.” These zones are interconnected through a central hub, known as the Cosmos Hub. The hub continuously monitors the status and performance of each zone and generates reports based on its findings, while the zones reciprocate by evaluating the hub. For a deeper understanding of the Cosmos Hub, online blockchain technology training courses can be a valuable resource.
An intriguing aspect of the Cosmos Hub is its reliance on a specific Proof of Stake consensus mechanism for maintenance. In the presence of a native cryptocurrency, the selection of transaction validators within the network depends solely on the amount of ATOM tokens pledged to support the overall Cosmos network.
Staking plays a crucial role in this context, as it involves dedicating a specific amount of currency to ensure the smooth operation of the entire blockchain system. Exploring blockchain technology can provide a more comprehensive insight into the inner workings of Cosmos and the ATOM cryptocurrency.
How does Cosmos function?
Cosmos operates through a trio of core functions crucial to its seamless functioning. These functions are the backbone of the system, and their continuous stability is of paramount importance.
- Applications
At the heart of the Cosmos network are its applications, responsible for recording and managing the internal transactions. These applications play a vital role in keeping the hub and zones informed about their respective states, thereby enabling the recording and reporting of these states.
- Networking
The networking component serves as the communication backbone of the entire Cosmos system. It facilitates the connection and exchange of information between the hub and zones. Information processed by the applications layer is transmitted through the networking lines, ensuring seamless communication.
- Consensus Mechanism
The consensus mechanism is responsible for ensuring the authenticity and integrity of the entire system. Cosmos employs a Proof of Stake (PoS) mechanism, which rigorously assesses the internal transactions, verifying their legitimacy for further progression. This PoS mechanism represents a more advanced approach compared to the traditional Proof of Work (PoW) mechanism and holds significant potential for driving Cosmos’ future endeavors.
It’s important to note that these layers within the Cosmos network must be interconnected in a specific manner for the network to function optimally. The maintenance of these connection lines can be efficiently carried out using designated open-source software and tools. Notably, the Cosmos system is a dynamic and evolving entity. It continuously seeks and incorporates user feedback to enhance its services and adapt to changing requirements. Blockchain developers play a pivotal role in this ongoing process of upgrading and refining the Cosmos internal system, a core aspect that Cosmos emphasizes.
Tools Helping in the Functioning of Cosmos
Several key tools are instrumental in ensuring the seamless operation of the Cosmos network, each serving a distinct purpose. Here, we delve into these essential tools:
Inter Blockchain Communication (IBC) Protocol:
As previously discussed, Cosmos revolves around the creation of independent blockchains, referred to as “zones.” A cluster of these zones is linked to the central hub, known as the Cosmos Hub, via the Inter Blockchain Communication (IBC) protocol. Each zone is responsible for various tasks, such as authenticating accounts, executing transactions, minting upgraded ATOM tokens, and distributing rewards to network users. Importantly, every zone has the flexibility to make improvements based on its specific performance needs. They operate autonomously without external assistance. The IBC protocol plays a pivotal role in enabling direct communication between each zone and the Cosmos Hub, facilitating interoperability. Given that the hub serves as the central nexus within the network, the IBC protocol ensures the efficient, smooth, and secure execution of all functions.
Tendermint Byzantine Fault Tolerance (BFT) Engine:
A standout feature of the Cosmos network is the Tendermint BFT Engine, an exceptionally robust algorithm that empowers blockchain developers to introduce new zones into the network without starting from scratch. This engine also takes charge of overall system security while consistently adding new blocks to the blockchain at regular intervals. At the core of the entire blockchain lies Tendermint Core, which is the bedrock for the Proof of Stake consensus mechanism that governs the network and its transaction validators or nodes. When proposing changes or updates within the network, all validator nodes must cast their votes and reach a consensus. Becoming a transaction validator is contingent on the stake you hold in the ATOM cryptocurrency.
Cosmos Software Development Kit (SDK):
The creation of new blockchains hinges on the utilization of a Cosmos-approved platform for software development. The Cosmos SDK serves as the conduit through which blockchain developers access various tools, including the Tendermint BFT Engine and Tendermint Core. This versatile toolkit manages fundamental operations like staking, token minting, and ATOM token distribution. It empowers developers to effect changes and enhancements to the overall Cosmos network within a unified framework. This process aligns with the concept of customization, as previously mentioned in the article.
How does Cosmos Fit into the Current Blockchain Ecosystem?
To understand how Cosmos fits into the current blockchain ecosystem, it’s essential to trace the evolution of blockchain technology and its preceding phases:
Blockchain 1 – Bitcoin:
The inception of blockchain technology occurred with the creation of Bitcoin in 2008. Bitcoin introduced the groundbreaking Proof of Work (PoW) consensus mechanism and operated on a peer-to-peer network, marking the birth of a decentralized blockchain system. However, it became evident over time that decentralized systems held immense potential, leading to the development of more advanced and upgraded blockchain iterations.
During this early digital era, developers had two primary methods for building decentralized systems: forking the Bitcoin codebase or constructing new systems on top of the existing codebase. In this stage, the three essential layers of Bitcoin’s functionality—applications, networking, and consensus—were intertwined. Scripting within the Bitcoin codebase had its limitations, necessitating the development of a new and improved codebase.
Blockchain 2 – Ethereum:
In 2014, Ethereum emerged as a revolutionary advancement in the world of blockchain technology. It aimed to provide a comprehensive platform for creating new decentralized blockchain systems. Ethereum achieved this goal by transforming the application layer into a virtual machine accessible to all, known as the Ethereum Virtual Machine (EVM). The EVM could process any type of program, referred to as smart contracts, deployed by developers without requiring specific permission. This approach empowered millions of developers to create decentralized applications. However, Ethereum faced challenges related to scalability, usability, and issues of sovereignty, leading to governance problems and difficulties in resolving bugs within the programs.
Blockchain 3 – Cosmos SDK:
Cosmos was conceived with a primary objective: to enable seamless communication and transaction sharing between various blockchains, transcending existing barriers. The ultimate vision was to establish a “network of networks” in a decentralized format, where every node could interact with one another. Cosmos ushered in a transformative era in blockchain technology by addressing issues of sovereignty, simplifying and accelerating transactions, and facilitating smooth communication within an optimized ecosystem.
These challenges were effectively tackled through open-source tools such as Tendermint, Cosmos SDK, and IBC, which allowed developers to design custom, secure, scalable, and, crucially, interoperable blockchain solutions. Cosmos operates as an open-source blockchain ecosystem, permitting developers to create, modify, or enhance the network’s internals within specified terms and conditions. This approach ensures constant evolution and improvement as more optimized concepts are injected into the platform’s foundation, enabling it to perform at its best. Cosmos thus occupies a significant position within the current blockchain ecosystem by offering innovative solutions to the challenges that earlier iterations faced.
What are ATOMs?
ATOMs, as previously mentioned, are the native cryptocurrency tokens used within the Cosmos blockchain network. Owning ATOMs in the Cosmos ecosystem provides several privileges, including participation in governance decisions and voting, the ability to validate and manage blocks, and covering transaction fees.
ATOM tokens made their debut with the launch of the original Cosmos mainnet in 2019. They were initially distributed to early project contributors, participants in the token sale, Cosmos Foundation employees, and the developers instrumental in constructing the Cosmos network. Subsequently, newly generated ATOM tokens were rewarded to the existing network validators or nodes. Notably, ATOM tokens cannot be directly purchased from the market, distinguishing them from more widely traded cryptocurrencies like Bitcoin and Ethereum.
To acquire ATOM tokens, individuals can explore blockchain development courses, which can provide the knowledge and skills needed to mine and obtain ATOM tokens created by Cosmos. This process typically requires a deep understanding of blockchain development to engage effectively in the Cosmos ecosystem.
The Aim of Cosmos Blockchain
The primary objective behind the creation of Cosmos is crystal clear: to establish a connected and decentralized network where all blockchains can seamlessly communicate with each other. Prior to the emergence of Cosmos, there were significant challenges impeding the development of a truly decentralized blockchain system. Even well-known blockchains like Bitcoin and Ethereum encountered insurmountable limitations in their pursuit of this goal.
With the introduction of Cosmos to the blockchain industry, many of these limitations found effective solutions. Cosmos, being an open-source blockchain development tool, continually welcomes contributions from developers who introduce more advanced techniques to make the platform more comprehensive and user-friendly for developers and validators alike. The term often associated with Cosmos, the “Internet of Blockchain,” aptly describes its role as a platform that successfully facilitates the interconnection and communication of diverse blockchains.
However, the journey doesn’t conclude here. The Cosmos platform remains in a state of constant evolution and improvement, driven by the ingenuity of top blockchain developers. They continue to introduce novel and optimized methods to address blockchain communication challenges by refining and enhancing the foundational layers of the platform to deliver even more robust performance.
The Final Thought
Cosmos has emerged as a highly promising cryptocurrency by effectively tackling a significant challenge that many other cryptocurrencies have struggled to address. Its ability to interconnect blockchains enhances the performance of each participating cryptocurrency in its respective domain. When these cryptocurrencies perform well and collaborate with others, the collective strength of the blockchain industry experiences substantial growth, underscoring the promising future of digital currencies.
While it’s evident that individual cryptocurrencies cannot resolve all the complexities within the blockchain concept, they play pivotal roles in collectively overcoming the obstacles in this dynamic landscape. However, it’s important to acknowledge that trading cryptocurrencies still faces considerable regulatory and operational limitations. Crypto experts and investors are continuously engaged in studying the potential impact of digital currencies on the global economy, leading to increased restrictions on their free circulation.
In light of these challenges, individuals interested in investing in blockchain should proactively educate themselves on the various tips and strategies. This knowledge will prove invaluable in navigating the market with greater ease and making informed investment decisions in the ever-evolving world of digital currencies.
Why should you choose Prolitus for Cosmos blockchain solutions?
Prolitus is your ultimate destination for Cosmos blockchain solutions. As a distinguished blockchain development company, we offer a comprehensive suite of services meticulously designed to address your unique needs and propel your blockchain projects to new heights. Let’s delve into the compelling reasons why Prolitus is the ideal choice for your Cosmos blockchain solutions.
At Prolitus, we take pride in our profound expertise in blockchain technology. Our seasoned team comprises professionals with extensive experience in crafting and deploying blockchain solutions across diverse industries. By choosing us, you gain a partner who comprehends the intricacies of Cosmos and can deliver tailored solutions aligned with your business objectives.
Our clientele spans across the globe, and we are equipped to serve businesses of all sizes, whether you are a startup, an SME, or a large enterprise. Our experienced team offers insights and solutions with a deep understanding of the local and international markets.
When it comes to Cosmos blockchain solutions, Prolitus is your trusted partner, offering the expertise, innovation, and support you need to thrive in this dynamic landscape. Join us on this exciting journey to unlock the full potential of Cosmos and revolutionize your business with blockchain technology.
