Cosmos “The Internet of Blockchains” an Introduction

Mar 21, 2020 3 min read
Cosmos “The Internet of Blockchains” an Introduction

A guide to the Cosmos Ecosystem, it’s functionalities and developments.

Hi Readers👩‍💻,

Today, we’d like to introduce you to the blockchain ecosystem Cosmos. We’ll discuss what Cosmos is, how it works and what the latest developments are.

🤓 PART 1 — What Is Cosmos?

Cosmos describes itself as a decentralized network of independent parallel blockchains, powered by BFT consensus algorithms like Tendermint. Let’s break that down. Before the introduction of Cosmos, it wasn’t possible for different blockchains to easily communicate with each other. Cosmos aims to make building blockchains easy and to break the borders between different blockchains to transact and interact with each other.

The Cosmos Ecosystem’s end goal is to create the “Internet of Blockchains,” also known as “Blockchain 3.0”.

To be able to achieve their vision, Cosmos implemented a set of open-source tools such as Tendermint, the Cosmos SDK, and IBC. Each of these is designed to let people build, secure, and scale blockchain applications in a timely matter. Moreover, it is possible for anyone — with development skills — to develop additional tools for the ecosystem.

  • Tendermint BFT — is a blockchain solution that packages the networking and consensus layer of a blockchain into a generic engine, which helps developers not to have to worry about the complex underlying protocols when developing new applications.
  • Cosmos SDK — is a generalized framework that makes the process of building a secure blockchain application on top of Tendermint BFT simpler. Additionally, a set of useful developer tools for building command-line interfaces and other frequently used utility libraries comes with the Cosmos SDK.

🗣 The Inter-Blockchain Communication Protocol

The Inter-Blockchain Communication (IBC) protocol, allows independent chains to transfer value or data through leveraging the instant finality property of Tendermint consensus. Although this sounds complicated, the idea behind IBC is rather simple. Here’s a quick summary of how it works.

Let’s say you want to send five tokens to a friend on Chain B. First, you lock the tokens on your chain (chain A); the chain then sends ‘a proof’ of this activity to chain B. Chain B tracks the validator of your chain. If 2/3rd of chain A’ validators sing the proof, it is considered valid. The five send tokens are then created on chain B.

The IBC protocol aims to not only be able to send value but logic and data as well.

💰 Cosmos Token

The Cosmos native token is called ATOM. Cosmos has a total supply of 252,816,052, according to Staking Rewards.

An important thing to know about ATOM is that it isn’t mined; instead, it is earned through a hybrid PoS algorithm. By staking ATOM, you can become a validator node to validate transactions and earn more tokens; it is also possible to delegate your tokens and receive a portion of the rewards. The inflation of ATOM is varies depending on the staking ratio and is currently around 8% annually.

It is possible to buy ATOMs on various exchanges such as Binance or Kraken as per Coinmarketcapor to acquire some directly through wallets such asTrustWallet, where one can also delegate their tokens. Read all about staking via TrustWallet here.

🕵️‍♂️ PART 2 — Latest Developments

Recently CosmWasm, a project enabling WebAssembly (WASM) virtual machines (VMs) in the Cosmos SDK, was launched. Ethan Frey from the Regen Network designed the first implementation. The project enables Rust developers to quickly write smart contracts that can be uploaded to any Cosmos SDK based chain.

One of the most recent developments is the launch of the IBC demo. Currently, the following are established: real light clients, end-to-end handshakes, and working token transfers. Once this goes online, we can expect more integrations and functions. If you’re interested in giving it a go, you can visit the Cosmos Github.

Another development that will be launched this year is the Game of Zones, the second adversarial testnet challenge. This competition will enable the Cosmos community to learn the nuances of the IBC protocol, including aspects such as potential failure modules. As for the rewards, there is a 100,000 ATOM price pool that will be divided between multiple winners.

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DISCLAIMER: This is not financial advice. Staking and cryptocurrencies investment involves a high degree of risk and there is always the possibility of loss, including the loss of all staked digital assets. Additionally, delegators are at risk of slashing in case of security or liveness faults on some PoS protocols. We advise you to DYOR before choosing a validator.

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