Cosmos-The Decentralized Blockchain Ecosystem
Cosmos (ATOM) is a decentralized ecosystem of independent blockchains that the creator- All In Bits Inc, aims this to become the next generation of internet technology. Instead of participating in different divisions between crypto factions, Cosmos brings them all together and allows for currency exchanges, interoperability and an Internet of Blockchains.
Atom is the staking coin that is used by the network and also tokenizes transactions. The team behind this project built two components for it to function properly. The Tendermint Core and the InterBlockchain Communications protocol. Together, they form the Cosmos Network.
The Tendermint core is the open-source base layer that acts as the development platform built on the blockchain. Everyone that has this application can use the blockchain in order to integrate their own decentralized or distributed network along with their compatible consensus model.
The Inter Blockchain Communications level is the next interconnectivity layer that enables easy communication between the individual chains. This creates a series of interconnected zones and acts independently and this is the key layer for the data, token and digital asset exchanges.
Cosmos integrates the verification hubs to keep everything running together and the hubs use the proof-of-stake consensus in order to validate the Tendermint transactions. The project gained popularity in recent years after it got more than $9 million in VC funding from companies such as Bain Capital and Paradigm. The mainnet was launched in 2019 in March and it was hailed as a very strong project but it is not without its problems. There was an attack on the project that exposed a vulnerability that would be very costly if not corrected.
The Tenderming director explained:
“In proof-of-stake, the costs and rewards [of the system] are internal. So, we had to come up with a very sophisticated system of distributing rewards, of distributing the speculator taxation system, of punishing people for malicious behavior, of punishing people for going offline. All of it has to be internal to the system and that’s why proof-of-stake is such a significant engineering feat over proof-of-work.”
ATOM Token Analysis
Cosmos had a supply of more than 237,928,231 ATOM tokens and more than $40 million tokens traded on a daily basis. The ICO was held in 2019 in April and it raised to $17.3 million worth of ETH, BTC, and USD. More than 75 percent of the available token supply was sold in one ICO. The token is not mined but it is earned via the hybrid POS algorithm. The more ATOM is staked, the more likely is to become a validator node to validate transactions and to earn tokens but it is also possible to delegate the tokens when you receive a portion of the rewards.
If one node is acting in a dishonest manner, it is immediately removed and its ATOM balance is held for 21 days. The staked coins are destroyed which happened after the summer attack this year. ATOM is accepted on many cryptocurrency exchange markets including BitForex, Huobi, Binance, Kraken, Okex, and Bibox.
If a node is found to be acting dishonestly, it’s removed immediately from the network and its ATOM balance is held for 21 days while the incidents are investigated. The staked coins are then destroyed. The summer 2019 attack removed the 21-day waiting period and allowed bad actors to remove tokens before they were destroyed.
“In these early days, we can expect to have issues, updates, and bugs. The existing tools require advanced technical skills and involve risks which are outside of the control of the Interchain Foundation and/or the Tendermint team. … Please exercise extreme caution!”
Cosmos Network: How It All Works
Cosmos was created initially by Jae Kwon in 2014 and he was joined by Ethan Buchman one year later. They created the platform’s SDK in order to lower the barrier for entities and businesses to develop decentralized fields for individuals chains to communicate with each other.
The individual chains which are the decentralized applications, are divided into a few zones and are connected through the Cosmos hubs. These hubs can validate transactions and provide compatibility. This is what enables the value transfers and data as well. Each chain can run its independent governance and they have even their software. The pegged tokens are created and they allow for conversion between the proof-of-work chain and the native PoS system in the tendermine core. With an environment like this, the Cosmos network has all the development pieces into one place and has a very strong team behind it.
Tendermint Inc director Manian stated:
“We want to take the blockchain development cycle from idea to implementation down from years to months. This is how we’re trying to transform the blockchain space. To make this whole vision of connecting blockchains work, there needs to be a set of operators who have skin in the game to coordinate this blockchain network,”
Important Things To Know
Cosmos and Tendermint are a network of interconnected blockchains that were initially created to become a foundation for future technology. Both of them enable easy blockchain creation and deployment with the cross-chain compatibility. The success of the projects is relying strongly on these key factors.
Cosmos is a dual-layer network that provides data, token and asset exchanges between different blockchains and each chain operates independently. The Cosmos Hubs system can validate on-chain transactions and earn some ATOM tokens through staking. The ATOM is a native cryptocurrency token from the Cosmos Network. The new blockchains are created by using the Cosmos SDK and Tenderming Core interconnected with the IBC layer.
With all of these pieces in place, Cosmos is a very well built platform that can easily compete in the modern market. if its team manages to negotiate a large third-party dapp library and to gain enterprise attention, it could become the next sleeping giant in the market.