Cosmos Cryptocurrency (ATOM): features, advantages and disadvantages
Cosmos (ATOM) is a decentralized network that will connect all blockchains into a single ecosystem, which will allow unrelated chains to exchange tokens or other values without resorting to the services of intermediaries: oracles, exchanges, smart contracts. The project is at the development stage, but it has already entered the top twenty cryptocurrencies with the largest capitalization, which indicates its relevance, and hence its promise as an asset for investment.
Cosmos Network Feature
Cosmos is developing in two directions. The first is a global network that can unite almost all existing blockchains – from the usual Bitcoin to the completely new development of the largest cryptocurrency exchange called Binance Coin. Linked blockchains will be able to communicate with each other, exchanging information and tokens, the authenticity of which is confirmed by the blockchain issuer and the Cosmos network.
That is, the Cosmos Network will become something like a decentralized exchanger, with which you can change bitcoins to ether or other currency. But the project team is confident that the blockchain can be used not only to store the transaction history, but also to transfer other values:
- Personal and business data of users;
- Rights to perform various actions, for example, the right to certify documents, put stamps or conclude a deal by proxy;
- Property registration data of legal value.
The second direction of Cosmos development is the development of applications that can interact with all blockchains connected to the Cosmos Network. A special tool has been created for this, which will allow third-party developers to create DDaPs by assembling them from pre-created modules. You can also create your own modules or completely unique applications.
In other words, the Cosmos Network is a hub capable of linking all blockchains into one global network, and it is also an analog of Ethereum – a network for launching DDaPs.
Cosmos Blockchain Components
The Cosmos blockchain is based on Tendermint Core – a solution that combines network and matching (consensus) blockchain levels into an engine for developing DDaPs in a modular way. At its core:
- Tendermint BFT. A modified version of the Proof-of-Stake (PoS) consensus algorithm, including the Byzantine error tolerance function, which guarantees high transaction speed and normal operation of the system, while 3/4 nodes play by the rules.
- Inter-unit Communication Protocol (IBC). Allows two heterogeneous blockchains to exchange tokens with each other without any intermediaries. The goal of IBC is to become what TCP / IP is for the Internet. Cosmos proposes to solve the problem of scalability of this approach by introducing two classes of blockchains: Hubs and Zones. Zones are regular heterogeneous block chains, and Hubs are chains designed to connect Zones to each other.
- Cosmos Software Development Kit (Cosmos SDK). Cosmos SDK contains a basic frame with built-in tokens and tools for setting and modifying them, thanks to which new blockchains can be developed in a modular (or template) way. Reduces development time for new applications from a few months to a few weeks.
- Blockchain Application Interface (ABCI). Allows replicating DDaPs in various programming languages. ABCI acts as a link between the Tendermint Core and the Cosmos SDK.
Cosmos cryptocurrency economy
Cosmos network implements two tokens:
- ATOM. In fact, this is a common cryptocurrency, like bitcoins and ether, which should become the connecting currency in the Cosmos Network. The only difference is that ATOM owners can take part in managing the platform by voting for or becoming validators.
- Photons. Coins used to pay transaction fees in the Cosmos ecosystem (an analogue of the “gas” in Ethereum).
ATOM Token Consensus and Mining
The Cosmos Network uses a consensus mechanism, according to which all ATOM (s) owners can use them as a voice when choosing validators. A feature of Tendermint BFT is that, unlike traditional PoS, there are not only stakeholders, but also delegators.
- Stakeholders are nodes that decide to become validators. They freeze their ATOM (s) and use them as a guarantee of their trustworthiness. Validators are those who have the most frozen coins on their accounts. If the validator tries to trick the system, frozen funds can be confiscated.
- Delegators – users who delegated their ATOM (s) to any stakeholder. When choosing a winner, the system adds this money to the stake of the stakeholder.
At this stage, Cosmos can only have 100 validators. They confirm transactions and generate blocks. For their work, the validating nodes receive an award in the form of platform coins, which are distributed between them and the validators who voted for them.
Prospects for Cosmos
The possibility of combining all blockchains into a single network is a very interesting idea, which, if successfully implemented, can become the infrastructure on the basis of which the “Internet of blockchains” will be created. But at this stage this is only an idea – the project is under development, and until we get at least confirmation of the concept, it’s too early to talk about the success and future of Cosmos.