The Cosmos token aims to create an “Internet of Blockchains”, where any blockchain is able to communicate, share data and transact with any other.
As a result, fighting, tribalism, and maximalism among supporters of the various different chains of lock became the norm. But can there be a blockchain to unite them all? Take a trip as we explore Cosmos, the “Internet of blockchains”.
In this article, we will discuss:
What is Cosmos Network token?
The goal of the Cosmos token is simple: to allow any blockchain communicate, share data and transact with anyone else. By allowing many different blockchains to interoperate, there is less need for these networks to compete relentlessly to be the blockchain that rules 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've also created a streamlined development process that allows developers to build their own custom blockchain in months or even weeks rather than years.
The combination of a relatively easy blockchain development process with the ability of old and new blockchains to interoperate if more application-specific and less general blockchains are developed.
Who invented the Cosmos token?
A Brief History of the Cosmos
The Cosmos story began on June 26, 2016, when its creator Jae kwon created the white paper for a project called Gnuclear. Gnuclear's idea was to create a fully decentralized interoperable blockchain system, using the Tendermint Consensus Protocol for such purposes. The initial idea was gradually evolving with the help of the community, until August 5, 2016, the project was renamed Cosmos.
From that moment on, Kwon began to look for mechanisms that would serve to finance his idea. It was like this, from January 1, 2017, he started to make a private sale of tokens to obtain funding. In total, 12 million ATOM tokens were sold at a price of $0,025 per ATOM, for a total of $300.000 raised. At the same time, another private token sale was also held at a cost of $0,08 USD per ATOM, with a total of 160.293.050 tokens sold and a total collection of $1.329.472 in total.
After this experience, on June 4, 2017, an ICO (initial currency offer) to sell a total of 160.293.050 ATOM tokens, with a price of 0,1 USD per token, and with a total of 16.029.305 USD collected from said sale. At that point, the development of the ATOM would begin to make its way towards becoming a reality.
- April 2017 – $17 million is raised in the first 29 minutes of the initial sale of the Cosmos token.
- December 2018 – Game of Stakes is released, which extensively tested the Cosmos network for the first time.
- March 2019 – launch of the official Cosmos mainnet.
- November 2019 – Kava labs becomes one of the first projects built using the Cosmos SDK to launch its mainnet.
- February 2020 – The Cosmos team splits and founder Jae Kwon steps down as CEO.
- September 2020 – Cosmos partners with Nym to bring anonymous credentials to the Cosmos ecosystem.
- February 2021 – Cosmos launches Stargate, which includes the first public release of the Inter-Blockchain Communication (IBC) protocol.
What's so special about Cosmos cryptocurrency?
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 that they must protect themselves, have their own governance and run their own validators.
Cosmos technology is based on:
- Tendermint – A consensus protocol that allows developers to create a proof of bet blockchain that is fast, scalable, and secure.
- The Cosmos SDK – allows developers to build apps on top of Tendermint-based blockchains.
- The Inter-Blockchain Communication Protocol (IBC) – A system that allows different blockchains to connect and communicate with each other.
What is Tendermint?
Tendermint is open source software that can be used to achieve Byzantine Fault Tolerance (BFT) on decentralized networks like Cosmos. In simple terms, BFT means that a decentralized network is able to continue operating safely and reach consensus on 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:
- Ethermint – A scalable and interoperable hybrid blockchain built using the Cosmos SDK and Tendermint.
- Terra – A delegated proof of bet (dPoS) platform designed for stablecoins as a blockchain payment solution.
- Regen Network – A decentralized marketplace for ecological assets, data and climate agreements.
What else is different about the Cosmos token?
Blockchains communicate in the Cosmos ecosystem through a hub and zone model. For example, if you want to connect Ethereum and Bitcoin through Cosmos, the two blockchains need to connect to their own zone. The Ethereum zone and the Bitcoin zone would connect to a hub, and through this shared hub, Ether and Bitcoin could be transferred between them.
What are ATOM tokens?
The native tokens of the Cosmos network are called ATOMs. Holding ATOMs gives the holder the ability to bet and validate blocks, vote on governance issues and pay transaction fees.
Initial ATOM tokens were created when the Cosmos Core Network was launched and were distributed to initial donors, token sales participants, Cosmos Foundation and core developers. New ATOMs are generated as rewards for network validators.
Where to buy ATOM cryptocurrency?
ATOM tokens can be traded on major exchanges such as Binance, Kraken and Poloniex. You can also receive ATOMs through stakeout directly as a validator or indirectly as a delegate.
What can you do with ATOM tokens?
Cosmos operates on a consensus proof of participation mechanism. This means ATOM holders can earn a share of the network lock rewards and transaction fees through staking, either by running their own validator node or by delegating their ATOM coins to a validator.
Validators bring into play or block their ATOMs and run specialized software that maintains the Cosmos network, 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 share of the rewards for wagering.
dApps built in Cosmos
As an interoperable and highly scalable blockchain network capable of hosting smart contracts, Cosmos has become popular with dApp developers who want to build efficient cross-chain (dApps) decentralized applications.
Some of the most prominent dApps currently operating on Cosmos include:
- ⚓ Anchor – a financial platform that offers low volatility interest rates on stable currency deposits.
- 💳 Flares – a payment network that supports multiple assets and payment systems, including games and DeFi.
- 📱 Klever – a mobile app with integrated wallet, browser and blockchain portfolio.
- 👛 Chainweaver – an interoperable multi-blockchain wallet and smart contract development environment
The future of the Cosmos cryptocurrency (ATOM)?
Each change, update or activation of a feature in the Cosmos protocol depends on the approval of ATOM holders. As the Cosmos network was launched relatively recently and is still somewhat in its development stage, it has not yet fully realized the vision set out in your white paper.
🔊 Cosmos community of validators, developers, integrators, clients, end users and $ ATOM holders…Stargate is live! 🇧🇷
Congrats to Cosmos Hub Validators and engineers for making this happen! 🇧🇷https://t.co/ZJrEa8QIq0
Today, we enter the #stargate ! https://t.co/VOYsTKDKYe
— Cosmos – The Interchain ⚛️ (@cosmos) February 18, 2021
However, with the release of the Stargate update, blockchains can now communicate with each other thanks to the Inter-Blockchain Communication (IBC) protocol – which developers are now free to build on. In addition, the Stargate update brings with it automatic updates, lightweight clients with all the features and 100x efficiency gains, making Cosmos a force to be reckoned with.
Is the cosmos cryptocurrency (ATOM) a good investment?
As cryptocurrencies and blockchain developments continue to grow, this altcoin is becoming known as the “blockchain internet”. Cosmos aims to be the center of all blockchains. You can imagine that offering a product where multiple blockchains can interact and connect directly or indirectly would have some value for the emerging space. Here is what you need to know before investing.
The interconnectedness of Cosmos is why it is dubbed the “blockchain internet”. Cosmos Hub is known as the part of the chain that connects all blockchains in a network. As a PoS (proof of bet) chain, ATOM holders can wager their tokens to keep the network and receive more ATOM as a reward. Offering interoperability, Cosmos has recently partnered with the DeFi Oracle Band Protocol and gives the third-party developer access to various data feeds.
Understanding blockchain technology can help determine if Cosmos is a good investment.
First, Tendermint is behind the network and consensus used in the Cosmos Hub. The consensus mechanism is based on a validation and delegation system. The first 125 validators are responsible for voting who will create the next blockchain blocks, known as validators. ATOM holders choose which validators to delegate their assets to – in this way, they vote for the next block creators. Those who are executed validators and are good actors are rewarded with ATOMs.
Like other PoS blockchains, users are rewarded for delegating their ATOMs to a validator. Reward rates vary between different validators. However, delegating on the Cosmos network is a little different. First, when delegating atoms to a validator, users cannot use them for any transactions. ATOMs are essentially blocked while you are delegating them. While locked, these ATOMs cannot be accessed and belong to the user who locked and delegated them. Through the hack mechanism, both validators and delegates can be punished. If they do not act properly, they will lose part of their assets due to the mechanism.
Passive Rewards through Cosmos – Capitalize or Earn Money?
Users can earn passive rewards by delegating to validators that were voted in the top 125. Users can redeem their rewards in two ways – compound or cash. By choosing composite rewards, users immediately add their newly received ATOMs to the existing delegation to potentially earn rewards at a faster rate. When withdrawing rewards, users will receive the delegation's ATOMs. Unlike the composite option, these ATOMs will still not be delegated and locked, which means that ATOMs can be used for transactions.
Users should be aware that when redelegating or delegating more assets to a validator, outstanding rewards will be claimed without creating a transaction. This means that there would be no trace of it, unless it will be reflected in your balance. Also, as an ATOM holder can vote for validators, if a validator falls out of the top 125, you will no longer earn rewards as the validator cannot create blocks. As Cosmos is the “blockchain internet”, it is available on several of the major exchanges and many people choose to buy from Binance, Coinbase and OKEx.
Conclusion
Cosmos was designed for the interoperability of different blocks of blocks. The objective is to represent a kind of “Internet of Blockchains” and to connect other systems through a central protocol. This is going really well, even though Cosmos is still somewhat overshadowed by its main competitor, Polkadot.
The expert opinions we surveyed paint a positive picture. Forecasts from leading long-term price analysts believe in a future increase in value.