Meet the “Internet for blockchains“, designed to solve a number of pressing problems of the crypto industry — this is how its creators position it!
The Cosmos platform offers its own modular ecosystem, making this project fast, cheap, scalable, and eco-friendly.
To demonstrate the power of their technology, the Cosmos blockchain team created a copy of Ethereum on Cosmos called Ethermint. This version works just like the original Ethereum and is even compatible with its existing smart contracts and tools, such as MetaMask. So, the original goal of the platform is to become a link for all existing blockchains, to reduce the cost, simplify and speed up the entire industry in general.
History In Faces
In 2014, Jae Kwon, an expert in software architecture, computer science, and distributed systems, created the Tendermint protocol, which has become and remains the main participant in the Cosmos network. This protocol in the history of the crypto industry was the first distributed consensus algorithm based on the Byzantine fault tolerance principle. Recall that the same algorithm formed the basis of the Free TON consensus.
Kwon was joined by Zarko Milosevic and Ethan Buchman to develop a fully interoperable Cosmos ecosystem. As of today, Jae Kwon has retired as project CEO (Peng Zhong took over in 2020) but he is still listed as its chief architect.
In 2016, the white paper for the future Cosmos project was published, and in 2017 the initial coin offering took place, during which $17 million was raised in the first 29 minutes. The Swiss Interchain Foundation, a nonprofit organization that funds open-source blockchain projects, helped the project. In 2018, the Cosmos network was extensively tested, and a year later it was officially launched.
All For The Sake Of Blockchains
Cosmos resembles Polkadot in its mission, as it also aims to create an ecosystem of interacting blockchain networks. However, unlike “polka dot blockchain”, Cosmos prioritizes the sovereignty of independent blockchains, so they must provide for themselves, have their own governance and independent validators.
The problem that the platform is designed to solve is the lack of a clear relationship between blockchains.
In fact, instead of giving priority to its own network, the goal of the Cosmos project is to promote the development of an entire ecosystem of crypto platforms that could programmatically exchange data and tokens with no central party contributing to this activity.
How “Tendermint” Works
The Cosmos network consists of three levels:
- Application processes transactions and updates the state of the network.
- Networking provides communication between transactions and blockchains.
- Consensus helps the nodes to agree on the current state of the system.
To link the layers together and allow developers to build blockchain-enabled applications, Cosmos uses an open-source toolkit.
The most important element of this multi-level design is the Tendermint BFT engine. This is a part of the network that provides developers with the necessary tools to form blockchains quickly and easily, without having to code them from scratch — it is possible to use existing code fragments
Tendermint BFT is an algorithm used by a network of computers (running Cosmos software) to secure the network, verify transactions, and lock blocks in the blockchain. Central to Tendermint is Tendermint Core, a control mechanism based on the Proof-of-Stake algorithm that supports the synchronization of a distributed network of computers running Cosmos Hub. Cosmos Hub was the first blockchain launched on the Cosmos network. It was built to act as an intermediary between the independent blockchains created in the Cosmos network, which are called “zones” here.
In order for participants (“validator nodes”) to turn on the blockchain and vote on the changes, they must first put the Cosmos ATOM tokens on the staking. To become a validator, a node must be in the top 100 nodes hosting ATOM, and the power of the vote is determined by the size of the bet — the principles adopted by Free TON.
Users can also delegate their tokens to other validators by giving them votes and receiving a part of the block reward in return. Validators are interested in honest work because users can easily switch between validators they delegate ATOM to, depending on their voting preferences.
Cosmos is just one of several platforms built on the Tendermint consensus engine. Here are his “brothers”:
- Ethereum clone, scalable and interoperable Ethermint hybrid blockchain.
- Terra is a Delegated Proof of Stake (dPoS) platform designed for stablecoins as a blockchain-based payment solution.
- Regen Network is a decentralized marketplace for environmental assets, data, and climate agreements.
All Corners Of Cosmos
Each new independent blockchain created in Cosmos (recall, here it is called a “zone”) is then linked to the Cosmos Hub, which records the state of each zone and vice versa. Once a zone is connected to the Cosmos Hub, it becomes compatible with any other zone connected to the hub, which means that blockchains with completely different applications, validators, and consensus mechanisms can exchange data.
For example, if you want to connect Ethereum and Bitcoin via Cosmos, both of these blockchains will need to connect to their own zone in Cosmos. The Ethereum zone and the Bitcoin zone will then connect to the Cosmos Hub and through this common hub, Ether and Bitcoins can be transferred between them.
ATOM — In The TOP-50 Cryptocurrencies
Holding an ATOM gives the holder the ability to place bets and check blocks, vote on management issues, and pay transaction fees.
The initial ATOM tokens were created at the launch of the Cosmos mainnet and distributed to the original donors, token sale participants, Cosmos Foundation, and core developers. New ATOMs are generated as a reward for network validators.
The market capitalization of the Cosmos platform currently exceeds two and a half-billion dollars, and the average daily turnover of the cryptocurrency is two hundred million. This allows it to take a comfortable place in the third top ten cryptocurrencies, according to Coinmarketcap estimates.
And Even DApps
As an interoperable, highly scalable blockchain network capable of hosting smart contracts, Cosmos has become popular with decentralized application (dApps) developers.
Some of the best-known decentralized applications currently running on Cosmos include:
Anchor is a financial platform that offers low-volatility interest rates on Stablecoin deposits.
Flares is a payment network that supports several assets and payment systems, including games and DeFi.
Klever is a mobile app with a built-in blockchain wallet, browser, and portfolio.
Chainweaver is an interoperable multi-blockchain wallet and smart contract development environment.
For Bitcoin, Ethereum, and many other blockchains, one of the primary concerns is performance. Such projects as Free TON, for example, strive to solve it by developing their own infrastructure, which in terms of speed and scalability could surpass all existing solutions. Mitja Goroshevsky, CTO of TON Labs, spoke in detail about the Free TON multithreaded architecture. For example, he explained here why the execution speed of smart contracts is the bottleneck for blockchain systems.
Cosmos and Polkadot have chosen a fundamentally different approach, focusing on creating universal tools for blockchain interaction, regardless of their strategies and established ecosystems.
Time will tell which of these approaches will be more progressive, but for now, there is a feeling that the industry can benefit from searching for solutions in any of these areas — technological advances in such an innovative environment are unlikely to be superfluous.