Buy Cosmos (ATOM)
How does Cosmos differ from other blockchains?
Cosmos is a project promoting an interoperable ecosystem of concurrent independent blockchains. In another words, Cosmos' objective is to enable various blockchains to communicate with one another and thus build a so-called "blockchain Internet.
It is precisely this focus on interoperability (blockchain interoperability) that differentiates Cosmos from all other projects. For example, the developers of the project are not simply developing blockchain, but rather building an entire ecosystem for the work of various networks, in that data and digital actives can be exchanged without a centralized intermediary.
At the exact same time, Cosmos users are able to create independent blockchains. For this purpose, the project team has developed special tools that allow them to create their own blockchain networks. Each individual blockchain is managed independently, but can interact with other blockchains in the network.
Cosmos has two types of blockchains: Zones and Hubs:
- Zones are regular blockchains.
- Hubs are blockchains that connect zones to one another.
Cosmos Hub is the first blockchain (and hub) to be launched in the Cosmos ecosystem. It is a public blockchain based on the Proof-of-Stake (PoS) consensus algorithm: it has no mining, and produces new coins by validators through stacking. Each independent new blockchain created in Cosmos is linked to the Cosmos Hub.
Once a blockchain zone is connected to Cosmos Hub, it starts communicating with all other zones connected to the hub. This allows blockchains to exchange data with other networks, applications and validators.
Cosmos is very similar to the Polkadot project, which also aims to create an ecosystem of interacting blockchain networks.
How was Cosmos launched?
The creator of Cosmos and Tendermint is American programmer Jae Kwon. In 2013, he became passionate about blockchain and created the Tendermint protocol, a PoS algorithm that allows parallel networks to run in a single decentralized environment. In 2014, Kwon organized a company called Tendermint Inc. (which is also registered as All Bits, Inc.) and published a white paper on the project. A year later, Kwon, along with developer Ethan Buchman, founded the Interchain Foundation (ICF), a non-profit organization that sought funding for Tendermint and the development of projects based on it. In 2016, Tendermint raised its first funding, released the Basecoin blockchain framework, on the basis of which the first iteration of Cosmos Hub was created. In April 2017, Cosmos held an ICO and raised $17 million in just half an hour.
In 2019, the main version of Cosmos Hub was launched, Binance's own blockchain, Binance Chain, was created based on Tendermint Core, as well as Cosmos' main network.
In February 2021, the Blockchain-based Service Network (BSN), China's blockchain infrastructure platform, added support to Cosmos. BSN is a large-scale project of the authorities, who also seek to launch the "blockchain Internet" and create a platform that allows developers to launch various dApps.
At the same time, the Cosmos team released an update to Stargate, which activated the Inter-Blockchain Communication (IBC) interoperability protocol. Thanks to IBC, various networks can now use Cosmos to seamlessly exchange data, including coins from their networks. Stargate has increased the network's blockchain efficiency by a factor of 100, and the rate of node synchronization by a factor of 96. The developers also announced plans to launch a decentralized Gravity exchange and the appearance of sharding.
In April of this year they also launched a decentralized bridge between the Plasm Network projects on Polkadot and Secret Network on Cosmos.
How does the Cosmos ecosystem work?
The Cosmos ecosystem has three main parts.
Tendermint Core is the programmatic implementation of the Tendermint BFT consensus algorithm. With Tendermint BFT, the decentralized network in the Cosmos Hub can work securely and reach consensus even if some members of the network act maliciously. Meanwhile, Tendermint Core provides consensus in Cosmos Hub. Blockchain zones, on the contrary, can operate on the basis of their own consensus values without the necessity of using Tendermint. Tendermint Core makes it also easy for designers to create blockchains without coding from scratch, focusing on application development instead of the sophisticated underlying protocol. As a consequence, with Tendermint Core, a blockchain in the Cosmos ecosystem itself can be created in weeks or months, rather than years.
Tendermint Core plugs into decentralized applications via the Application Blockchain Interface (ABCI) protocol. This protocol is consistent with any programming language, enabling developers to select the language that suits their needs. ABCI acts as a link from Tendermint to the Cosmos SDK (about it below).
Tendermint runs on the Delegated Proof-of-Stake (DPoS) consensus alternative, a much more democratic variant of the PoS algorithm in that coin holders transfer (or delegate) their power to validate transactions to a pre-selected validator. As a result, DPoS divides all coin holders up into two groups: delegators and validators. The former decide which validators will participate in keeping the network up and running, while the validators work to validate transactions and add new blocks to the blockchain. Validators are selected by vote, and delegates can withdraw their vote at any time - this protects the network from centralization. As a result, there are far fewer nodes in a DPoS-based network than in PoW and PoS networks.
The main benefits of DPoS algorithms are fast speed and scalability. So, Tendermint can handle up to 10,000 transactions per second, and the developers plan to increase the speed up to 40,000 operations per second. It is also important that the algorithm can quickly work on cellular and IoT devices (IoT - Internet of Things).
The Cosmos SDK (Cosmos Software Development Kit) is a platform and toolkit for programmers that facilitates code writing.
In other words, it is a blockchain development framework for blockchain networks. It can be used to create blockchains and decentralized applications on top of blockchains based on Tendermint. The Cosmos SDK has been used to build projects such as Binance DEX, Kava, Terra, Xar, Minter, and IRISnet.
The modularity of the Cosmos SDK makes it possible to transfer almost any existing blockchain code to Tendermint. For instance, the Cosmos team ported an Ethereum virtual machine into the SDK module. The result is the Ethermint network - it works just like Ethereum, but on Tendermint BFT. All existing Ethereum tools, including wallets and smart contracts, are compatible to Ethermint.
Inter-Blockchain Communication (IBC) is a protocol that enables different blockchains, including ones outside the Cosmos ecosystem, to interact with each other, share data, including coins, and connect to Cosmos.
IBC is only compatible with blockchains in which a transaction is confirmed instantly. With PoW-based blockchains, such as Bitcoin and Ethereum, the IBC is used via Peg Zones proxies that enable them to exchange data with Tendermint blockchains.
The role of the ATOM coin and its investment potential
ATOM is an internal Cosmos coin that also plays a key role in Tendermint Core.
An ATOM holder can participate in block-stacking and validation, voting for proposals affecting the development of the Cosmos network. The number of validators is limited - they can only be the 125 network members who have the most stacks in ATOM. Right now, the validator at 125 has 18,642 delegated coins worth $188,284. Over time, the number of validators will grow to 300.
ATOM is a popular steaking coin. Over 70% of all ATOM coins now participate in steaking. The average yield on ATOM stacking is 9%, and coins must be held in the stack for at least 21 days. There are currently 218.18 million ATOMs in circulation. Issuance is not limited, but its rate can vary: from 7% to 20% per year.
ATOM is used to pay transaction fees (like "gas" in Ethereum). 98% of ATOM's commission goes to validators, proportional to the number of coins they block, and 2% goes to the reserve pool. In the future, there are plans to launch a Photon service token, which will only be used for commissions. Fees can also be paid in native blockchain coins launched in the Cosmos ecosystem.
ATOM is also used to exchange tokens between different blockchains. Here's how it works:
- IBC blocks a given number of ATOM tokens in blockchain A.
- The protocol then sends this data to blockchain B.
- The blocked tokens are then released in blockchain B.
Cosmos Hub's task is to account for the number of tokens in each blockchain area.
Cosmos Development Outlook
Cosmos is an innovative and promising project that is visible in the crypto sector and in demand among developers. It is developing slowly, but thoroughly. The recent launch of IBC and Stargate updates have made the project a full-fledged ecosystem, which competitors need to reckon with, and investors need to carefully monitor its development.
The capabilities of interoperable projects are staggering. They take blockchain far beyond the financial sector. For example, blockchains that can communicate with each other could be used in logistics, distribution, document management, medicine, retail, and so on. Each of these sectors could operate their own networks synchronized in a single node.
Interoperability also expands the possibilities of the crypto market. For example, decentralized exchanges can communicate with each other through the same hub, providing traders with extensive arbitrage opportunities and additional liquidity.
As it develops, Cosmos could take a much more significant place in the crypto sector than it does now.
How to buy Cosmos in Nigeria?
You can buy ATOM and store it in a cryptocurrency wallet. Let's learn more about cryptocurrency wallets, their features and varieties.
What is a cryptocurrency wallet and how to choose one?
A cryptocurrency wallet is a special high-tech program that makes it possible to receive, send and store cryptocurrency. There are cryptocurrency wallets that work with only one cryptocurrency. There are also multi-currency cryptocurrency wallets. Let's understand in more detail.
Ways to store cryptocurrency
There are several ways to store cryptocurrency:
- Online cryptocurrency wallets are hosted on websites and give users access from any computer device.
- With mobile crypto wallets placed on mobile gadgets, users have access to their money at any time, would have access to the Internet.
- An exchange-based cryptocurrency wallet is hosted on a cryptocurrency exchange website.
- A software crypto wallet is a program and is installed on a personal computer. The keys to such a wallet in the form of an encrypted code are available to the user of the computer device.
- Hardware crypto-purses are devices resembling an ordinary USB-flash drive. Hardware crypto wallets have their own software.
- Paper crypto-purses are created on separate sites and printed out by users.
- Browser-based crypto-purses work in the browser and are extensions in Google Chrome.
- Deposit crypto wallets hosted on an exchange platform.
How to invest in Cosmos in Nigeria?
You can invest in Cosmos through an exchange or broker.
The process of trading cryptocurrency on the exchange is quite simple. The exchange mainly uses order stacks, through which you can place both a limit trade order and initiate a market order.
Most exchanges provide only basic functions, which are usually enough for the average user, especially for a beginner. A small number of specialized exchanges offer trading instruments with high leverage, such as futures or open-ended swaps.
The main advantage of an exchange is the ability to trade a large number of different cryptocurrencies.
Brokers provide additional tools for margin trading, such as contracts for difference (CFDs).
CFD is a derivative financial instrument in which the broker agrees to pay the trader the difference in the value of the underlying security between two dates: the opening date and the closing date of the contract.
There are differences between buying cryptocurrencies directly and trading CFDs on cryptocurrencies.
You have more flexibility when trading CFDs because you are not tied to an asset; you simply buy or sell a derivative contract.
So, you can buy Cosmos to invest or trade cryptocurrency, the choice is yours. Either way, we wish you good luck.