Cosmos (ATOM): blockchain and cryptocurrency overview

What is a blockchain network? Perhaps the answer is: “A blockchain is a digital ledger, the functionality of which is provided by a group of trusted nodes (nodes). The system continues to work correctly even if some of the validators (no more than 33%) act in a detrimental way. Each of the full nodes copies and saves the ledger on its computer and updates the data according to a protocol. Blockchain technology allows all participants in the network to share a distributed ledger without the need for control by a single control center.

The first blockchain ecosystems were siloed; tokens from different projects could only be converted on dedicated online venues. Blockchains have a very complex architecture and can conduct only a few financial transactions per second. The start-up Cosmos (ATOM) is an off-the-shelf solution that eliminates the incompatibility and low bandwidth of virtually any decentralized payment network.

What is Cosmos (ATOM)

Cosmos (ATOM) is a decentralized ecosystem made up of a myriad of independent networks based on the Byzantine fault tolerance protocol. This PoS algorithm solves the problem of Byzantine generals, for Cosmos to work seamlessly.

ATOM cryptocurrency is the platform’s least important token. Independent chains can interact with each other in the Cosmos network. Their aggregation forms the ‘Internet of Blockchains’. At the center is Cosmos Hub, which enables the rapid and secure transfer of digital assets between zones.

The Cosmos network uses hubs. These are chains of Cosmos blocks that act as a single point. Thousands of blockchains can connect to it, communicating with each other through the hub. The Cosmos blockchain is just one of many nodes in the ecosystem, and ATOM cryptocurrency is used to manage the entire Cosmos Network.

A consensus betting confirmation (PoS) mechanism called Tendermint makes it easy to create and connect new distributed networks. Tendermint blockchains are considered among the most secure and scalable in the crypto industry. They can perform up to 10,000 transactions per second, and remain functional even if a third of the validator nodes are offline or attempt to corrupt the network. Tendermint makes it possible to build configurable, secure and scalable blockchain ecosystems in a very short time. To facilitate the deployment of blockchains and smart contracts, the Cosmos SDK was created and has become one of the most widely used tools for blockchain developers.

Technical features of Cosmos (ATOM)

The Cosmos platform is based on three components:

Tendermint Core is designed to combine the system and consensus protocols. The core is based on the Tendermint BFT and the IBS crypto-protocol, which connects the independent pieces.
The Application Blockchain Interface (ABCI) is a BFT-implementation of DApps in several computer languages. The ABCI functionality makes it possible to combine Tendermint Core and the Cosmos SDK and create decentralised applications in almost any programming language.
The Cosmos SDK or “the Base Coin” simplifies the creation of ABCI and improves blockchain functionality by allowing developers to focus on building custom applications in a standardized environment.
Cosmos supports various cryptocurrencies and programming languages. The core provides Cosmos Hub security, the second layer blockchains are fully independent and do not connect directly to the Tendermint Core. The matching mechanism makes it possible to create new DApps and payment networks using the Cosmos SDK and run them on Tendermint.

Earlier this year, the project developers launched an update to Stargate, enabling the activation of the Inter-Blockchain Communication (IBC) protocol. Peer-to-peer networks can use IBC to freely exchange information and make mutual payments. With the implementation of Stargate, data exchange speeds have increased by a factor of 100, and nodes are synchronised 96 times faster. The Cosmos team plans to launch a decentralised Gravity exchange and implement sharding. This year, Cosmos created a decentralized bridge between the Plasm Network on Polkadot and the Secret Network.

How the Cosmos blockchain (ATOM) works

The system is made up of independent modules called ‘Zones’. They are connected to the main hub blockchain. It is reminiscent of the plot of the sci-fi series Frontier. There, in order to travel from planet Earth to other worlds, one first had to get to Centrum, around which the other planets were arranged like petals.

The zones interacted with Centrum, maintaining the optimum state of the entire ecosystem. In some ways, this coordination mechanism is similar to sharding. But in the Cosmos system, each shard is a blockchain of a separate cryptocurrency.

Zones between blockchains act as communication gateways. Trusted cross-chain nodes are synchronised with the Cosmos Hub. They also need to run a full node on the other side of the bridge, to lock in the moment of asset transfer. “Original” coins are frozen in a multi-signature scenario until the transaction processing is completed and the tokens in the cross-bridge chain are destroyed.

A blockchain hub is effectively a decentralized exchange. IBC is considered one of the most significant milestones in the development of the cryptocurrency space, as this protocol allows all blockchains to be connected into a single ecosystem. The process of interaction between networks connected to Cosmos hubs is similar to wrapped tokens in Ethereum.

For example, sending a stable Terra UST coin to a Binance smartchain using BIBC would require blockchaining that UST in the Terra blockchain to coin an equivalent amount of UST in the Binance smartchain. Even though Cosmos is the intermediary for such a transaction, this does not mean that you will have to pay with that network’s internal tokens. ATOM is just one of many cryptocurrencies that you could use to pay transaction fees across the chain. PoW blockchains such as BTC or ETH can also connect to Cosmos hubs using IBC, but the asset transfer process is completely different. Cosmos hubs need to create a so-called tethering zone, which monitors the state of the attached blockchain as well as the storage of any funds sent to a smart contract or multisig wallet on that network.

If you wanted to send BTC to the Terra blockchain using an IBC, you would send tokens to a bitcoin wallet address that is managed by the Cosmos node’s anchor zone. When the tethering zone sees that your BTC is on its way to the appropriate wallet address, it will automatically mint BTC tokens on the Terra blockchain and send them to the address you specify. This proof-of-participation cross-transfer protocol is almost identical to the one used by THORChain, which is also built using Tendermint.

The IBC protocol could, purely in theory, link the Bitcoin, Ethereum, ZeroCash, and CryptoNote blockchains together, despite the different algorithms. But in practice, this has not yet been implemented. Developers can observe the semantic meaning of the commands of a particular programming language in a particular application on the IBC protocol. This feature makes it possible to perform transactions of valuable assets from one blockchain to another while retaining all contractual features.

Cosmos project history and key development milestones

Cosmos cryptocurrency ICO campaign was conducted in 2017. Investors invested more than USD 3 million, buying 80% of the total volume of ATOM tokens. It must be said that Cosmos at the time was one of the few startups that had a standalone blockchain at the time of the coin pre-sale launch and did not use ERC-20 standard tokens. But it took the developers about three years to bring the project to the ICO stage.

Byzantine Fault Tolerance (BFT) was first researched in the context of an open blockchain ecosystem by crypto-enthusiast Jae Kwon in 2014. It was he who developed the Tendermint protocol, which to this day is the best solution for reconciling BFT and Proof-of-Stake (PoS) token mining. Tendermint Core solves all the bandwidth and energy efficiency problems inherent in traditional Proof-of-Work blockchains.

A year later, developer Ethan Buchman joined Jae Kwon. All in Bits Inc and Monax joined forces to create a virtual machine based on Tendermint Core. An Application Blockchain Interface (ABCI) was developed to make Tendermint Core compatible with any application, regardless of programming language.

In 2016, the co-founders of Tendermint publish the official project doctrine of Cosmos: a network of distributed ledgers. In the same year, Cosmos takes first place, among innovative projects, at Shanghai Blockchain Week. The startup Tendermint Inc was commissioned to create a voting system based on the BFT blockchain by the Rock and Roll Hall of Fame administration in Cleveland, USA. The Interchain Foundation (ICF) is created to support the development of the project.

The next year is marked by a large inflow of investment. Tendermint Inc is working on the Cosmos Network brand and architecture. Many developers of decentralized blockchain-based applications are interested in the system. The first release of the Cosmos SDK has been released.

In 2018 Tendermint Inc created the concept of “Blockchain Internet” and a mechanism for the interaction of different networks in the Cosmos ecosystem. More than 20 chains are starting to work in test mode. Game of Stakes game network launched with over two hundred coordinated nodes operating in a BFT environment.

The Cosmos cryptocurrency project continues to grow in 2019. Binance, one of the world’s largest crypto-exchanges, announces the launch of Binance Chain, built on Tendermint Core and the Cosmos SDK. The Cosmos Hub blockchain is getting off the ground.

The project is not yet complete and the final version of Cosmos is due in 2022.

Who is working on the Cosmos project (ATOM)

In addition to lead developers Ethan Buchman and Joe Kwon, a group of non-profit foundations and blockchain programming teams are developing the Cosmos project. Of particular note are the Interchain Foundation (ICF) and IRIS Ltd, as well as computer software company All in Bits Inc.

Cosmos Mining (ATOM)

Traditional mining of the Cosmos digital asset is not possible; the reward for maintaining the network is paid only to validators. There is no way for an ordinary user to be among them. The only option for earning is by staking. You delegate ATOM coin to one of the validators and get a percentage of the profit. The best way to do this is on the crypto exchange Binance Earn.

Register, verify your identity and buy coins on the spot market, and then choose a fixed-stake or floating-rate deposit for the cryptocurrency. In the former, you will receive dividends through the network’s validators, while the latter will pay interest to the exchange itself. Customers are offered flexible terms and a guaranteed income.

Where you can buy Cosmos coins (ATOM)

Among the exchanges supporting exchange pairs with ATOM token, the leading one is undoubtedly Binance. Complete a simple registration and verify your account.

We advise to trade on exchanges with a large trading volume. Smaller and lesser known exchanges often have artificially inflated volumes and it can be difficult to sell coins. Binance is leading in terms of volume at the moment.

Available trading pairs:

ATOM/BTC
ATOM/USDT
ATOM/BUSD
ATOM/BNB
ATOM/USDC
However, other reputable platforms such as Coinbase Pro, Kraken, Poloniex have not neglected the Cosmos cryptocurrency. For a full list of exchanges and trading pairs, see here.

Available Cosmos (ATOM) wallets

Web wallet available here. The Cosmostation smartphone app is available on GooglePlay and AppStore.

The Atomic Wallet or the physical Ledger Nano wallet will be suitable for storing and stacking Cosmos cryptocurrency.

A full list of compatible wallets is available on the project’s official website, link https://cosmos.network/ecosystem/wallets.

Or use the Lunie Browser Extension to interact with the Cosmos blockchain. You will be able to create a new address, restore an existing one from backup code, control your accounts and confirm transactions from Lunie.io.

Add the Lunie extension to your chrome browser or install it on your mobile gadget. Click “Create new address” or “Restore with backup” and you can work with atom tokens and some other cryptocurrencies. You control the account and keys.

Installing the Cosmos app on Ledger

The app is needed to store and earn ATOM tokens on the Ledger hardware safe. Procedure:

Open the Ledger Live app and find the Cosmos cryptocurrency in the account manager.
Select the Cosmos app and start the automatic installation process.
Create an account and top up your wallet balance
Activate ATOM coin stacking and receive interest on your capital.

Cosmos (ATOM) price forecast

In January 2019, Cosmos crypto coin (ATOM) was trading at $7 and this is the best price since the launch of the project. Then the exchange rate began to fall and reached an all-time low of $1.16 in March 2020, before going upwards.

At the time of writing, the average price of the coin on the exchanges is $40 and it has fallen by 35% in the last month. Whether this trend will last long is hard to say. Much depends on the state of affairs in the crypto industry and the successful implementation of the roadmap.

ATOM cryptocurrency ranks 34th on Coinmarketcap. This altcoin can be called a great tool for short-term trading, but the feasibility of long-term investments is still questionable.

Conclusion

The idea of combining blockchains into one heterogeneous ecosystem is worth noting. The startup offers users a number of unique features and in principle Cosmos (ATOM) could make cryptocurrency exchanges faster and cheaper. Exchanges would then no longer be needed and this development would not appeal to all market players. In addition, there are a number of blockchain projects that support digital coin conversions, such as Stellar Lumens. Admittedly, Cosmos blockchain is not decentralized, with functionality dependent on hundreds of validators. Of course, malicious activity is punishable by forfeiture, but there may be workarounds.

Technological shortcomings and weak marketing policies could cause investors to lose interest. And then the Internet of Blockchains concept will be put on hold until the next round of crypto-evolution. If you believe in the future of the project, add ATOM tokens to your investment portfolio, but be aware of risk diversification.

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