Cosmos

Cosmos (ATOM) is a decentralized ecosystem of independent blockchains, Atom (ATOM) is its proprietary staking currency, and its transactions are encrypted. In addition to scalability, interoperability has always been a key issue that needs to be solved in the blockchain world. More than a decade since the first Bitcoin blockchain came out, we now have many different options when it comes to interoperable blockchain networks. Cosmos is probably one of the most popular options out there, with its Tendermint consensus mechanism and open source developer tools.

How Does Cosmos Work?

Tendermint

The most important element of this layered design is the Tendermint BFT engine, which is part of the network and allows developers to build blockchains without writing code from scratch. Tendermint BFT is an algorithm used by the network of computers running the Cosmos software to secure the network, validate transactions, and submit blocks to the blockchain. It connects to applications through a protocol called the application blockchain interface.

Tendermint BFT

At the heart of Tendermint is Tendermint Core, a proof-of-stake (PoS) governance mechanism that helps keep the distributed network of computers running the Cosmos Hub in sync. In order for participants ("validators") to power the blockchain and vote on changes, they first need to stake ATOM. To become a validator, a node needs to be among the top 100 nodes of ATOM. Voting rights are determined by the number of ATOM bets. Users can also delegate their tokens to other validators, allocating votes to them while still receiving a portion of the block reward. Validators are encouraged to act honestly, as users have the flexibility to easily switch between validators delegated to ATOM based on their voting preferences.

Cosmos Hub

Cosmos Hub is the first blockchain to launch on the Cosmos network. It was created to act as an intermediary for all independent blockchains in the Cosmos network. Therefore, it is called "district". This includes validating accounts and transactions, creating and distributing new tokens, and making changes to your own blockchain. The Cosmos Hub is responsible for supporting interoperability between all areas in the network by monitoring their status.

Inter-Blockchain Communication Protocol

Zones are connected to the Cosmos hub via the Inter-Blockchain Communication (IBC) protocol, a mechanism that allows information to move freely and securely between each zone. Once a zone is connected to the Space Hub, it can interact with all other zones connected to the hub, meaning blockchains with very different applications, validators, and consensus mechanisms can exchange data.

Cosmos SDK

The Cosmos team also built the Cosmos Software Development Kit (SDK), which allows developers to build blockchains using the Tendermint consensus algorithm. The SDK reduces complexity by providing the most common functionality in blockchain (i.e. staking, governance, tokens). Developers can create plugins to add any extra functionality they want.

ATOM Coin

The total supply of Cosmos tokens is 237,928,231 ATOMs. Over $40 million worth of ATOM is traded daily, with the highest price to date being $8.31 on March 16, 2019. Cosmos’ ICO was held on April 6, 2019, raising $17.3 million in ETH, BTC, and USD. About 75% of the available token supply was sold during the ICO, with seed investors retaining 5% and All in Bits and the Interchain Foundation each holding 10%.

ATOM cannot be mined, it is earned through a combined PoS algorithm. The more ATOM you stake, the more likely you are to become a validator to validate transactions and earn tokens, although it is also possible to delegate your tokens and receive rewards. If a node is found to be abnormally active, the node will be immediately removed from the network and its ATOM balance will be retained for 21 days while the incident is investigated. Deposited coins will be destroyed. A hack in the summer of 2019 eliminated the 21-day waiting period and allowed bad actors to delete tokens before they were destroyed.

Many cryptocurrency exchanges accept ATOMs, including Binance, BitForex, Huobi Global, Dcoin, Kraken, Bibox, and OKEx. Trading pairs include BTC, ETH, USDT, and fiat currencies such as the Euro and Korean Won.