What is Cosmos? Everything you need to know about ATOM (2024)

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What is Cosmos?

Cosmos (ATOM) is a blockchain platform focused on interoperability between different blockchain networks. Its goal is to create an ecosystem where blockchain protocols can collaborate and communicate without conflicts. Cosmos enables developers to easily build and deploy new blockchain applications while improving the performance and security of existing blockchain networks.

Cosmos has its own cryptocurrency called the ATOM token, which is used for transaction processing and network security. The project has gained significant attention for its unique approach to interoperability and has established a wide range of applications and partnerships.

How does Cosmos work?

Cosmos is a modular, decentralized network that connects various blockchain networks. It achieves this through the Tendermint consensus algorithm and the Inter-Blockchain Communication (IBC) protocols. The network is composed of different "zones," each with its own rules and protocols that can be customized and extended using Cosmos development software.

The ATOM token is the native token of Cosmos and is used for transaction fees, value transfer between different zones, and as a reward for validators. The network employs Proof-of-Stake (PoS) and a governance model that allows participants to vote on significant decisions.

The ATOM token

The ATOM token plays a crucial role in securing and stabilizing the network, serving several functions, including:

• Acting as the native currency for processing transactions on the network.
• Rewarding validators for contributing to network security by validating transactions and adding blocks to the blockchain.
• Serving as a democratic tool for voting on proposals for upgrades and changes to the ecosystem.
• Serving as a store of value. Users can purchase and hold ATOM tokens as an investment, similar to other cryptocurrencies.

The token economy of Cosmos is designed to promote healthy and sustainable network growth while engaging the community in the platform's development and maintenance. With its various use cases, the ATOM token offers a wide range of opportunities for both users and investors.

The Technology Behind ATOM

The technology behind Cosmos consists of two key components: the Cosmos Hub and zones.

• The Cosmos Hub is the central nexus of the ecosystem, serving as a communication and security layer for all connected zones. The Cosmos Hub has its own blockchain, where the state of all zones and their tokens is tracked. The Tendermint consensus algorithm is used to reach consensus on the status of the Cosmos Hub.
• Zones are individual blockchain networks that can communicate with each other and with the Cosmos Hub. Each zone has its own state and rules for network operation, providing flexibility and diversity. Zones use a special interface to communicate with the Cosmos Hub and the Tendermint consensus algorithm to achieve consensus on the zone's status. Cosmos communication protocols seamlessly connect zones, enabling transactions between different blockchain networks.

The network's security is ensured by validators who validate transactions and add blocks to the blockchain. Validators are rewarded with ATOM tokens for their contributions to network security.

With the Cosmos SDK, a modular framework for building blockchain applications, developers can quickly and easily create new zones and connect them to the network. This allows for the development and implementation of new blockchain applications while improving the performance and security of existing blockchain networks.

The Cosmos ecosystem

The Cosmos ecosystem is an open-source platform aimed at improving interoperability between blockchain networks. The ecosystem consists of various components and entities that contribute to the development and maintenance of the network.

The Cosmos Hub serves as the central hub of the network, with its own blockchain. Different zones are connected to each other and the Cosmos Hub, allowing them to communicate and exchange data. Zones have their own rules and use different mechanisms to reach consensus on the zone's status. Validators validate transactions and add blocks to the blockchain, enhancing network security. They are then rewarded with ATOM tokens for their contributions to the network.

The Cosmos ecosystem offers developers and users numerous opportunities to create and use new applications and improve interoperability between blockchain networks. Various applications can be built on the Cosmos ecosystem, including DeFi protocols, gaming applications, and supply chain management platforms.

Benefits of Cosmos

Cosmos offers several advantages that make it an excellent choice for developers and businesses:

• High scalability
• Advanced security
• High interoperability between blockchain networks
• User-friendly for less experienced users
• Open-source platform

Drawbacks of Cosmos

While Cosmos is popular, it also has areas for improvement. What are the disadvantages of Cosmos?

• Low decentralization due to validation nodes
• Relatively limited development resources for applications
• Staked ATOM tokens are locked for a certain period

Who is the founder of Cosmos?

Developers Jae Kwon and Ethan Buchman co-founded the Cosmos network in 2014, creating the Tendermint consensus algorithm that would power Cosmos. Kwon and Buchman later authored the Cosmos white paper and released the software in 2019.

Cosmos was founded with support from the Interchain Foundation (ICF), a Swiss company that supports the development of secure, scalable, open, and decentralized networks. The initial release of ATOM took place in 2017, and two years later, the network was ready for use.

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In 2026 experts expect a minimal price of €12.27 and a minimal price of €40.56 in 2031.

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