What is Cosmos?
Cosmos’ nickname “The Internet of Blockchains” might sound like an exaggeration but is exactly what this network is aiming to create.
Created by Jae Kwon and Ethan Buchman in collaboration with the Interchain Foundation in 2014, Cosmos seeks to unite crypto networks by offering open-source tools that allow them to communicate easily and efficiently, effectively removing the need for oracles and other parties to communicate between them.
Cosmos was able to raise over 26 million dollars by running an Initial Coin Offering (ICO) in 2017 and a Series A funding round in 2019, the year in which the whitepaper and software would be released.
Cosmos is a network of many independent blockchains called zones, which work in parallel without sacrificing efficiency, stability, or security in the process.
The network can handle multiple assets but has a native token named Atom. This token can be used to prevent spam, to stake and obtain benefits, and as a governance token.
What is the Purpose of Cosmos?
The purpose of Cosmos is “simple”: creating an ecosystem of blockchain networks that fosters cooperation and innovation by setting certain standards for scalability, usability, and sovereignty.
By creating a connected ecosystem where blockchains can coexist and collaborate, Cosmos aims to combine the focus of developers and users alike to move the technology forward as a whole instead of playing a game of “king of the hill”.
This use of a common standard would facilitate the creation of new blockchains as new use cases emerge, while also creating new ones as a natural result of the interoperability that would emerge between the different networks.
Each network would effectively work as a building block for new networks without the need of creating workarounds or building from the ground if they are incompatible.
Cosmos is similar to projects like Polkadot in what it tries to accomplish, but it prioritizes the independence of each network by providing them with more freedom and responsibilities when it comes to governance, security, and validation.
Just like the internet, certain rules are decided in the form of standards and infrastructure but ultimately, each part of the whole is its own zone with its own purposes and rules.
How Does Cosmos Work?
The Cosmos network makes use of 3 different layers to fulfill its purpose: Application, networking, and consensus. These layers allow the processing of transactions, communication between blockchains, and reach consensus between nodes, respectively.
Each blockchain network in Cosmos is limited to a “zone”, which gives it independence and freedom in different regards. However, these zones can’t be isolated as they will automatically be connected to hubs, which are networks specifically designed to connect zones between them.
There is no need for each zone to be connected with each other, just like on the internet there is no need for every server to know each other. By making use of multiple hubs, networks will be able to connect to networks that don’t have a direct connection to them, with the only common hub being the Cosmos Hub.
This hub is in charge of keeping records of the states of all networks, facilitating interoperability between them.
Cosmos is powered by the Atom token. As previously mentioned, Atom fulfills 3 different functions that are essential to the network: Preventing spam, staking, and governance.
Atom is the currency used in the network to pay for fees, which are proportional to the processing power required by a transaction just like “gas” in Ethereum.
Staking takes place in the form of “bonding”, a process that allows stakers to generate block rewards and increase the economic security of the network by making it resistant to attacks.