Cryptocurrency Explained: Cosmos Crypto – The Internet Of Blockchain


31 May 2022

Even if you are familiar with other well-known cryptocurrencies like Bitcoin or Ethereum, you may still find Cosmos Crypto (ATOM) to be a little peculiar. The Cosmos Crypto (ATOM) cryptocurrency offers a number of advanced features and incentives that are on par with or even more significant than those provided by other cryptocurrencies with which it competes.

Decentralized blockchain systems make it more difficult for different crypto assets to connect with one another, and they also limit the flow of transactional activity. This is one of the potential downsides of using such systems. As a direct consequence of recognizing the potential of this opportunity, Cosmos (ATOM) is being created to address newly arising issues. Together with bePAY, jump into the world of Cosmos to see what exactly Cosmos crypto is. How does it work as its native coin ATOM is used?

What Is Cosmos?

The goal of Cosmos is straightforward: to allow any blockchain to interact, exchange data, and transact with any other blockchain. By allowing many blockchains to interoperate, there is less need for these networks to compete viciously to become the dominant blockchain. Many distinct blockchains may coexist, each with its own specific use cases and benefits.

Cosmos is a comprehensive technological stack that goes beyond just enabling various blockchains to communicate and exchange data. Additionally, they have built a faster development process that enables developers to design their own bespoke blockchain in a matter of months or even weeks, as opposed to years.

In the event that more application-specific and less general-purpose blockchains are established, the combination of a relatively simple blockchain creation process and the interoperability of new and existing blockchains will prove effective.


What is Cosmos? 

Cosmos Cryptocurrency

The ATOM token powers the Cosmos ecosystem as a whole. It plays a significant role in preserving interoperability across all zones in the more extensive Cosmos network. ATOM tokens are capable of being spent, held, sent, and staked. ATOM is also a governance token, allowing holders to vote on network ideas and enhancements. (Voting power is proportional to the quantity of ATOM staked.)

Upon the launch of the Cosmos mainnet, the first ATOM tokens were produced and given to early funders, token sale participants, the Cosmos Foundation, and core developers. As incentives for network validators, new ATOMs are created.

Cosmos has a total of 292,586,163  ATOM in circulation. Every day, more than $200 million worth of ATOM is traded, and its all-time high Cosmos price was $44.45 on Jan 17, 2022. You can access Coinmarketcap in order to check the real-time Cosmos price

On April 6, 2019, the Cosmos ICO raised $17.3 million worth of ETH, BTC, and USD. Approximately 75% of the token supply was sold during the ICO, with 5% reserved for seed investors and 10% owned by All in Bits and the Interchain Foundation.


Cosmos cryptocurrency 

What Is Cosmos Used For?

ATOM is the native currency of Cosmos and has three major uses:

  • Paying transactions and gas costs are dependent on the amount of processing power required to complete the task.
  • Participating in the governance structure of Cosmos Hub. The more ATOM a person has, the more votes they have in proposal voting.
  • In the Tendermint consensus process, delegation behind validators or staking to become a validator.

How Does Cosmos Crypto Work?

In other words, Cosmos (ATOM) technology is intended to address the most frequent limitations in the crypto sector, with interoperability, scalability, and usability serving as the basis for its development.

Common hurdles for Proof of Work protocols include prolonged network processing, expensive operational costs, limited scalability of transaction activity, and environmental impact.

In addition, the difficulty of adopting blockchain applications as a whole is a problem of usability, posing significant obstacles for many programmers and consumers who are still unfamiliar with blockchain technology.

Typically, it takes at least a couple of weeks to finish the blockchain in a system of the second generation. With Cosmos, however, even the most complex blockchain modules may be constructed within a week.

This comparison gives a fantastic explanation for why Cosmos is so popular among developers in the crypto-asset sector. The introduction of Cosmos (ATOM) into the crypto sphere might remove the limitations of blockchain interoperability entirely.


How does cosmos crypto work?

Currently, more industries than ever before are using blockchain technology. Despite the fact that blockchains may increase the quality of services and operations, each one has a disadvantage with respect to the isolated operating system.

Occasionally, the lack of an intermediate on the blockchain inhibits platforms and crypto assets from carrying out their duties in full.

Cosmos (ATOM) permits total decentralization while preserving compatibility. This allows developers to concentrate on designing systems and services, as opposed to managing communication across blockchains.

Moreover, multiple blockchains may boost the use of other platforms inside the Cosmos ecosystem.

Key Features Of Cosmos

There are three distinct layers that make up the Cosmos network:

  • Application: Handles transactions and changes the network’s status.
  • Networking: Enables connectivity between blockchains and transactions.
  • Consensus: Assists nodes to agree on the present system state.

Cosmos depends on a collection of open-source tools in order to connect all the layers and enable developers to create blockchain applications.


The most important component of this layered architecture is the Tendermint BFT engine, the component of the network that enables developers to construct blockchains without having to write them from start.

The Tendermint BFT algorithm is used by the network of computers running the Cosmos software to protect the network, check transactions, and add blocks to the blockchain. It links to apps using the Application Blockchain Interface protocol.


Key features of cosmos

Tendermint Byzantine Fault Tolerance (BFT)

Tendermint Core is a Proof of Stake (PoS) governance system that keeps the Cosmos Hub machines that run on a distributed network in sync.

To power the blockchain and vote on changes, participants (validator nodes) must first stake ATOM. To qualify as a validator, a node must be in the top 100 staked ATOM. Voting power is based on the quantity of ATOM staked.

Users can also give their tokens to other validators, giving them their votes while they still get a piece of the block reward. Users can easily change which validators they give ATOM to based on how they want to vote. This gives validators a reason to do a good job.

The Cosmos Hub And Zones

The first blockchain to be released on the Cosmos network was the Cosmos Hub. It was designed to operate as an intermediary between all the individual blockchains produced inside the “zones” of the Cosmos network.

Each zone in Cosmos is capable of performing its basic activities independently. This includes authenticating users and transactions; producing and distributing new coins and implementing modifications to its blockchain.

The Cosmos Hub is in charge of making sure that all network zones can work together by keeping an eye on their conditions.


 Cosmos’ blockchain paradigms

Protocol For Inter-Blockchain Communication

Each zone is linked to the Cosmos Hub using the Inter-Blockchain Communication protocol (IBC), a technique that allows information to be freely and safely transited between any connected zone.

Once a zone is linked to the Cosmos Hub, it is compatible with all other connected zones, allowing blockchains with drastically diverse applications, validators, and consensus algorithms to share data.

Cosmos SDK

The Cosmos team has also developed the Cosmos software development kit (SDK), which enables developers to create blockchains using the Tendermint consensus algorithm.

The SDK reduces complexity by providing the most prevalent blockchain capabilities (i.e., staking, governance, and tokens). Plugins allow developers to add whatever new functionality they choose.

Cosmos In Compare With Others

Cosmos Vs Ethereum

Even though Ethereum developers have advocated for a move to PoS for years, the network is currently using a PoW consensus method, which makes it less sustainable than Cosmos.

Scalability is another significant concern for Ethereum. Occasionally, it may take minutes or even hours to perform a transaction on Ethereum.

In contrast, Cosmos Tendermint BFT Proof of Stake algorithms can handle up to thousands of transactions per second, making the whole process far quicker and less expensive than Ethereum’s gas costs, which may be quite high at times depending on blockchain traffic.

In Ethereum, complex financial instruments are handled via permissionless smart contracts with specialized purposes that are used to construct the whole ecosystem. Each smart contract or application in Cosmos is effectively its own blockchain, ensuring that they will not interfere with one another while ensuring a seamless transaction process.


Cosmos vs Ethereum

Cosmos provides a developer-friendly architecture for constructing sovereign blockchains rapidly and affordably. Its interoperable method enables easy communication across blockchains, while Ethereum’s approach requires the very complex and insecure exchange of tokens wrapped in paper.

In contrast, the key advantage of utilizing Ethereum is its widespread use as a blockchain. Its network effect continues to make it the preferred platform for DeFi, NFTs, and the Metaverse, which represent blockchain’s most fashionable characteristics now and probable in the future.

>> Recommend further facts about Ethereum Network

Cosmos Vs Polkadot

Despite the fact that Cosmos vs Polkadot seem to have the same sort of governance, there are two significant differences: governance in transaction validation and the movement of tokens or assets across systems.

The Cosmos Hub protocol stipulates that transactions are approved by the 100 validators with the largest ATOM stakes. 

Delegators may choose and modify validator pools at any moment to stake tokens and receive incentives. Zones may choose their own form of governance, such as issuing their own coin instead of ATOM or having their own hub with a separate validation scheme. Private blockchain zones with permission may be built alongside public ones, and assets can be readily transferred between them.


Cosmos vs Polkadot

In Polkadot, parachains are comparable to blockchain zones in Cosmos. Through the Relay chain, the central coordinating blockchain, they share the same set of validators, guaranteeing uniform and reinforced security throughout the network. Connected Cosmos blockchains to the hub do not use the same unified security.

While token transfers from one parachain to another are conducted using smart contracts on Polkadot, the Cosmos IBC enables simple asset transfers and interaction across chains via the Cosmos Hub and IBC. Cosmos smart contracts are blockchains in essence.

This enables Cosmos to record each transaction in three distinct locations: the two interacting zones, the hub, and the zone.

>> Learn more about the Polkadot project.

FAQs About Cosmos

Is Cosmos A Good Investment?

According to ATOM price forecasts and its prior performance, the coin may have potential room for growth and be a prudent investment. It is more than a simple connection between blockchains, and its functions make it a viable market choice. Cryptocurrency exchanges may be used to purchase ATOM coins.


Is Cosmos a good investment?

What Is The Basis Behind Cosmos?

Cosmos SDK is a suite of open-source developer tools that may be used by developers to construct new blockchains. This has been the foundation for the establishment of several additional big and famous networks. Tendermint Core is the default consensus mechanism of the Cosmos SDK. However, it may be customized for individual applications.

Does Cosmos Have Its Own Cosmos Wallet?

There is no particular Cosmos wallet. Instead, a number of exchanges and crypto services enable networks and tokens across the Cosmos ecosystem.

Wrapping Up

Cosmos was first marketed as the “Internet of blockchains.” One distributed ledger to govern them all. From decentralized banking and cloud computing to VPN services and decentralized exchanges, the Cosmos ecosystem is extraordinarily broad. The long-term objective of Cosmos is to transform the internet as we know it by placing blockchains at the center of everything. 

Now that the foundations have been established, we must see how Cosmos develops and how significant its contribution will be to the crypto business and blockchain technology.