Should You Buy Cosmos/ Atom Crypto?
Cosmos is a network of blockchains where data and tokens can be shared. Launched in 2019, Cosmos is tagged as ‘the internet of blockchains’.
Independent blockchains can be developed on the Cosmos platform, with each one retaining governance of their own chain while allowing communication and interoperability between the different blockchains.
Cosmos is powered by its native cryptocurrency the Atom, which raised more than $16 million when issued in 2017. The Atom is used on the Cosmos platform for governance and to aid security.
How Does Cosmos Work?
The ability for the independent blockchains using the Cosmos network to interoperate is essential. Cosmos uses open-source tools to achieve this aim including Tendermint, the base layer where blockchains may be developed.
Within Tendermint is a proof-of-stake algorithm which validates and adds blocks to the chain. Blockchains are created in Cosmos within zones with Cosmos Hub the first zone added to the network. The role of Cosmos Hub is to ensure the interoperability between the other zones on the network.
Validation of transactions requires holding the Cosmos native cryptocurrency Atom. There is no mining of Atoms.
Instead coins are earned through a proof-of-stake algorithm. Only validators can add blocks to the chain, and to be eligible a Cosmos network users needs to stake Atoms. Within the Cosmos network a validator needs to be one of the top one hundred in terms of Atoms staked.
This will also give them voting power on issues of network governance. Validators earn Atoms as a reward, and non-validators can still get in on the act by delegating tokens to validators for a share of the payment.
Transactions can move between the different independent blockchains on the network, with proof posted on the recipient chain.
The different blockchains or zones are connected using the Inter-Blockchain Communication protocol (IBC), enabling blockchains which may contain very different applications and consensus tools to exchange data.
New blockchains are created on the network using the Cosmos Software Development kit (SDK). This provides common blockchain features to reduce complexity in development, while allowing plug-ins to be applied for any additional features required.
What Are the Use Cases for Cosmos
Cosmos was not designed with one use case in mind, instead having adaptability at its core to enable multiple uses.
The network was designed to help ease the entry in to blockchain development and to make it easier for independent blockchains to interact with one another.
The individual blockchains could also represent a company’s intranet or its decentralised apps, offering a fast, secure method to process their transactions.
When you connect a blockchain to the Cosmos Hub you can exchange tokens across different chains without the need of a middleman.
Cosmos Atoms are used for fees, for staking tokens to validate blocks and as a governance tool to vote on the network’s development proposals going forward. As of yet Cosmos has not placed a cap on the overall supply of Atoms.