For the majority of blockchains, interoperability has proven to be a challenge for data transmission and cross-chain connectivity.
Due to the blockchain’s unavoidable rigidity, developers are left with only two options:
- Divide the code to create their own chains.
- Employ middleware solutions to fill in the gaps.
The Inter-Blockchain Communication protocol for Cosmos crypto thrives in part because it emphasizes adaptability. The resources made available make it easier to create decentralized apps (dApps) on the Cosmos network.
Following its launch, Cosmos quickly established itself as one of the most promising investments for 2021 in the crypto market. Here are some things that set Cosmos apart from its competition.
The Cosmos network
The “internet of blockchains” known as Cosmos attempts to build a network to fill in the gaps enabling cross-chain data transmission without centralizing oversight or speeding up transactions.
The Cosmos Hub acts as a hub for connecting the many chains into a specific area where they can communicate with one another. The ecosystem is supported by the native token (ATOM), which is used when staking and rewarding validators.
In 2014, a computer scientist named Jae Kwon created the open-source blockchain launching program Tendermint. With assistance from the Interchain Foundation (ICF), the Tendermint consensus algorithm’s core was later used to launch the Cosmos network.
The Cosmos Hub uses the Proof-of-Stake (PoS) technique to keep all zones in the Cosmos network interoperable. The Inter-Blockchain Communication (IBC) protocol, which facilitates communication between dissimilar blockchains, helps extend interoperability beyond Tendermint-based blockchains.
For instance, any PoS cryptocurrency, such as Cardano (ADA), can connect to the IBC.
By addressing network dominance difficulties in existing networks, Cosmos also seeks to make it simpler for users to develop and deploy dApps on the network (e.g. Ethereum).
ATOM is the native coin of Cosmos Hub, one of many PoS blockchains that make up the Cosmos network’s hubs. The primary function of ATOM is to ensure the security and long-term viability of the Cosmos Hub network because the PoS consensus mechanism requires validators to own ATOM in order to participate in the validation process.
Owners of ATOM tokens can stake them to guarantee network security in exchange for a share of the network transaction fees. Block rewards are given out for token verification.
Additionally, the token is required to participate in Cosmos Hub governance. By keeping ATOM in their wallets, token owners can assign their tokens to others or participate actively in governance.
Over the past few years, Cosmos has added more partners and initiatives to its ecosystem. This could lead to a rise in the price of the product.
As an example, the Cosmos network supports the Binance Chain. There is a marketplace for developers being developed by Akash, and the Cosmos network is also being developed by the European network E-Money.
IRISnet, which was developed using the Cosmos SDK, intends to focus on the commercial area of blockchain interoperability. The Tendermint BFT is exceptionally functional. So much so that even Loom, a project that started on the Ethereum network, has now moved to the Cosmos network.
Because of these and other initiatives, developers and investors see Cosmos as a favorable network. In 2020, the team worked with Nym to integrate anonymous credentials into the Cosmos network.
A few months later, with the introduction of Stargate, Cosmos made the IBC protocol available to the general public.
At its initial launch in March 2019, the ATOM token cost $7.50. Within a few days, the price dropped to $3.45 as buyers who had purchased ATOMs during the ICO profited from the lower cost and sold their tokens.
ATOM is ranked number 27 in the entire crypto market as of July 20, 2022, with a circulating supply of 292,586,163 and a market valuation of $2.9 billion.
Based on the asset’s current market price of $10.17, the anticipated investment return is around 57.76% if you purchased it at the time of its introduction (or earliest known price).
The price increased by 33% to highs of $43 in the first quarter of 2022, then dropped by 50% to $22, and fluctuated in April. The price of ATOM hit a new local low of $5.67 in June as investors continued to dump the stock.
The ultimate objective of Cosmos is to create “the internet of blockchains”. This will enable users to effortlessly move between blockchains, make use of each one’s advantages, and avoid their disadvantages.
With the Proof-of-Work software, computer miners compete to process transactions and win rewards. However, in Cosmos, a Proof-of-Stake blockchain, users are given blocks to mine based on how many tokens they have.