By Daniel Phillips and Ki Chong Tran
7 min read
At the moment, a blockchain tends to act as its own universe with almost no way to communicate with the world outside of its network–without third-party help anyway.
As a result, bickering, tribalism, and maximalism among the supporters of the various different blockchains has become the norm. But can there be one blockchain to unite them all? Take a trip as we explore Cosmos, the "Internet of blockchains".
Cosmos' aim is simple: to enable any blockchain to communicate, share data, and transact with any other. By allowing many different blockchains to interoperate, there is less of a need for these networks to ruthlessly compete to be the one blockchain to rule them all. Instead, many different blockchains can coexist with their own specialized use cases and advantages.
Cosmos is a complete technology stack that goes beyond simply allowing different blockchains to connect and share data with each other. They have also created a streamlined development process that allows developers to create their own custom blockchain in months or even weeks, instead of years.
The combination of a relatively easy blockchain development process with the ability of new and old blockchains to interoperate should more application-specific and less general-purpose blockchains are developed.
Cosmos is based on the consensus protocol, Tendermint, which was created by Jae Kwon in 2014. To develop the complete Cosmos interoperable ecosystem, Kwon was joined by Zarko Milosevic and Ethan Buchman; he subsequently stepped down from the project in 2020.
Cosmos is most similar to the Polkadot project, which also seeks to create an ecosystem of interoperable blockchain networks. However, unlike Polkadot, Cosmos prioritizes the sovereignty of independent blockchains, meaning they must secure themselves, have their own governance, and run their own validators.
The Cosmos technology is based on:
Tendermint is an open-source software that can be used to achieve Byzantine fault tolerance (BFT) in decentralized networks like Cosmos. In simple terms, BFT means a decentralized network is able to continue operating securely and achieve consensus about its current state even if some actors involved in the process have failed or are malicious.
Cosmos is just one of several platforms built around the Tendermint consensus engine; others include:
Blockchains communicate with each other in the Cosmos ecosystem through a hub and zone model. For example, if you wanted to connect Ethereum and Bitcoin through Cosmos, both blockchains would need to connect to their own zone. The Ethereum zone and Bitcoin zone would then each connect to a hub and through this shared hub, Ether and Bitcoin could be transferred between them.
The native tokens of the Cosmos network are called ATOMs. Holding ATOMs gives the holder the ability to stake and validate blocks, vote on governance issues, and pay for transaction fees.
The initial ATOM tokens were created when the Cosmos mainnet launched and were distributed to initial donors, token sale participants, the Cosmos Foundation, and core developers. New ATOMs are generated as rewards for network validators.
ATOMs can be traded on major exchanges such as Binance, Kraken, and Poloniex. You can also receive ATOMs through staking directly as a validator or indirectly as a delegator.
But if you're looking to buy ATOM outright, here's how to do it on Binance.
Step 1: Create your Binance account and sign in.
Step 2: Navigate to your spot wallet and deposit the cryptocurrency you want to trade for ATOM. As of writing, Binance supports trades against Binance USD (BUSD), Tether (USDT), Binance Coin (BNB), Bitcoin (BTC), and USD Coin (USDC).
Image: Binance
Once selected, load your account with this cryptocurrency and wait for it to confirm (it will show in your balance once confirmed). For the purposes of this tutorial, we'll show you how to trade USDT for ATOM, but the process is largely the same regardless of which asset you choose.
Step 3: Head over to the ATOM/USDT trading page. On the bottom, you'll find the order panel.
Image: Binance
Here, select the 'Market' option and enter the amount you want to spend on ATOM and click the 'Buy ATOM' button when you're ready to execute your order at the best available price.
Your ATOM will then be available in your Binance spot wallet.
Cosmos operates on a proof-of-stake consensus mechanism. That means that ATOM holders are able to earn a share of the network’s block rewards and transaction fees through staking, either by running their own validator node or by delegating their ATOM coins to a validator.
Validators stake or lock their ATOMs and run specialized software, which maintains the Cosmos network by proposing new blocks and validating transactions.
Holders can also choose to delegate their ATOM coins with validators instead of running the validator software themselves, which still allows them to receive a portion of the rewards for staking.
As an interoperable, highly scalable blockchain network capable of hosting smart contracts, Cosmos has become popular among dApp developers that want to build efficient cross-chain decentralized applications (dApps).
Some of the most prominent dApps currently operating on Cosmos include:
Each change, upgrade, or feature activation in the Cosmos protocol depends on approval by ATOM holders. Because the Cosmos network launched relatively recently and is still somewhat in its developmental stage, it hasn't yet fully realized the vision set out in its whitepaper.
However, with the launch of the Stargate upgrade, blockchains can now communicate with one another thanks to the Inter-Blockchain Communication (IBC) protocol—which developers are now free to build with. On top of this, the Stargate upgrade brings with it automatic upgrades, full-featured light clients, and efficiency gains of 100x, making Cosmos a force to be reckoned with.
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