Cosmos (ATOM)

What is Cosmos (ATOM)?

| CryptoPress |

Cosmos (ATOM) is a distributed network of blockchains designed to grow and function together. Cosmos wants to create an Internet of Blockchains so that blockchains can keep their sovereignty, talk to other blockchains in the ecosystem, and process transactions quickly. This makes it great for a wide range of uses. 


Name Price24H (%)
Cosmos Hub (ATOM)

Whitepaper v.1
Cosmos v.2 proposal
Official website

Each blockchain in the Cosmos is run by a combination of BFT and Tendermint consensus algorithms, which make up the network’s functional backbone. Tendermint BFT is a proof-of-stake consensus system (software development kit) that runs the Cosmos Hub and the Cosmos SDK. 

Byzantine fault tolerance (BFT) is a way for a distributed network to come to a decision even if some nodes in the network send responses with wrong or missing information.

The Cosmos SDK is an open-source platform that tries to build public proof-of-stake (PoS) blockchains for many assets. The Cosmos Hub is the economic hub of the Cosmos network, which is a blockchain. The Cosmos Hub wants to make it possible to trade tokens between chains, keep tokens safe across chains, connect to ETH and BTC, and store tokens across chains.

The Cosmos whitepaper states that blockchains are isolated and unable to interact. They are hard to build and can only handle a certain number of transactions per second. Then, Cosmos addresses three blockchain-related issues: sovereignty, scalability, and sustainability.

Source: Cosmos.

Sovereignty: On blockchains, all economic action occurs on a single chain, ensuring sovereignty. This leads to centralized control, ongoing costs for developers of smart contracts, and high costs for people who want to use chains that are already full. To solve this problem, the Cosmos SDK wants to give developers a free platform for making decentralized blockchain apps.

Scalability: By using horizontal and vertical scalability technologies, Cosmos wants to make it possible for blockchain apps to have millions of users. Cosmos tries to be scalable by copying a blockchain to relieve congestion or by splitting the applications into many blockchains that are just for those applications. Interchain token transfers let these numerous chains continue functioning as a single network. Horizontal scalability also lets developers increase throughput by letting multiple parallel chains run the same application and be checked by the same set of validators.

Sustainability: Cosmos blockchains use an efficient proof-of-stake (PoS) algorithm for network security. Compared to proof-of-work blockchains, our PoS technology reduces Cosmos’ carbon footprint by more than 99 percent.

Cosmos launch

In April 2017, Cosmos started its initial coin offering (ICO), which helped it raise more than USD 17 million. Total ATOM supply is set at 236 million units. After the March 13 launch of the Cosmos mainnet, ATOM was added to a number of cryptocurrency exchanges.

Cosmos is the Internet of distributed ledgers.

With Tendermint BFT and the flexibility of the Cosmos SDK, Cosmos makes blockchains strong and simple to construct.

Cosmos makes it possible for blockchains to share value through IBC and Peg-Zones while still keeping their own identities.

Cosmos makes it possible for blockchain applications to support millions of users through its horizontal and vertical scaling solutions.

Cosmos is, more than anything else, an ecosystem made up of a group of tools that are modular, flexible, and can be swapped out. To make the promise of blockchain technology a reality, developers are invited to join the effort to enhance current tools and build new ones.

The decentralized internet and global banking systems of the future will need these technologies to be built.

The development of the “Internet of Blockchains”

Cosmos Hub

IBC is a protocol that enables token transfers across different blockchains. How can we then establish a network of blockchains?

Source: Cosmos.

Cosmos offers a modular design with two types of blockchain to address this issue: Hubs and Zones. Zones are ordinary heterogeneous blockchains, but Hubs are blockchains developed expressly to link Zones. When a Zone sets up an IBC connection with a Hub, it can instantly access any other linked Zones and send and receive data from them. Consequently, each zone only has to create a limited number of connections with a limited number of hubs. Hubs also prohibit zones from spending twice. This implies that when a zone gets a token from a hub, it must only trust the zone from which the token originated and the hub.

The Cosmos Hub is the first Hub to be deployed in the Cosmos Network. The Cosmos Hub is a public Proof-of-Stake blockchain. The ATOM is its native staking token, and many different tokens can be used to pay transaction fees. The debut of the Hub coincides with the introduction of the Cosmos network.

IBC – Connecting Blockchains Together

The link between blockchains is facilitated by the Inter-Blockchain Communication protocol (IBC). IBC exploits the immediate finality characteristic of Tendermint consensus (but it can work with any “fast-finality” blockchain engine) to let different chains trade value (in the form of tokens) or data.

Heterogeneous Chains

Heterogeneous chains have different layers, which lets them use different ways to handle networking, consensus, and application components. A few characteristics must be met for a blockchain to be compatible with IBC, the most important of which is that the consensus layer must have rapid finality. Proof-of-Work chains (such as Bitcoin and Ethereum) do not fit into this category since their conclusion is probabilistic.

Each blockchain is maintained by a group of validators whose role it is to reach consensus on the next block to commit to the blockchain. In Proof-of-Work distributed ledgers, these validators are known as miners. A blockchain with its own group of validators is a sovereign blockchain. Since validators are ultimately responsible for updating the state, it is important that blockchains are sovereign in many situations. In Ethereum, applications are administered by a centralized group of validators. Consequently, each application has very limited sovereignty.

IBC makes it possible to move tokens and data between different blockchains. This means that blockchains with different applications and validator sets can work together. For instance, it enables token transfers between public and private blockchains. No other blockchain system permits this degree of compatibility at present.

What issue does Cosmos solve?

Cosmos’s goal is to make it easier for all blockchains to talk to each other while solving the three main problems with blockchains: sovereignty, scalability, and sustainability.


The free Cosmos SDK enables developers to construct decentralized blockchain applications without continuing fees. Smart contracts don’t have to live on a separate blockchain for these blockchains to talk to each other. This means that transaction costs won’t be too high because of network congestion, and scaling will be easier.

Cosmos SDK inside the environment of Cosmos

This will make it easier to come up with new ideas in areas like decentralized finance (DeFi), non-fungible tokens (NFTs), gaming, decentralized autonomous organizations (DAOs), social networks, markets, and the economy that depends on the internet, especially the stake-holding economy.


Interoperability inside the Cosmos is what ensures the functionality of a scaled system. By joining the Cosmos interoperability model and using the same communication standards, all types of sovereign blockchains will be able to talk to each other and help improve the architecture of their protocols.

Cosmos can be made scalable by copying a blockchain to relieve congestion or by splitting the applications into several blockchains that are each designed for a specific use case. Interchain token transfers let these numerous chains continue functioning as a single network.


The security provided by the PoS consensus mechanism makes sure that the network will last. When compared to the PoW consensus algorithm, the PoS consensus method has a 99 percent reduction in carbon footprint.

Use cases

  • ATOM is the Cosmos Hub’s principal token and attempts to safeguard the Hub’s interchain services. 
  • As a measure for preventing spam, the token is used to pay fees. The amount of the charge might be related to how much math was done during the transaction.
  • ATOM may be “bonded” as staking tokens to gain block rewards. The economic security of Cosmos Hub is contingent on the quantity of ATOM pledged. When more tokens are collateralized, more shares are at risk and the cost of an attack on the network increases. With increased ATOM bonding, the network enjoys more economic security.
  • By voting on ideas, ATOM holders may manage the Cosmos Hub with their staked ATOM.

Earning new Cosmos (ATOM)

Staking ATOM locks it up indefinitely. Protocol guarantees that delegated ATOM cannot be transferred. Delegating establishes a validator’s position and weight depending on its voting power.

A validator must be provided voting power when ATOM is locked in the staking process. Using their chosen wallet, the user may unlock their staked ATOM. “Undelegating” means this. The ATOM transaction to undelegate takes 21 days to become transferrable again.

Staking benefits are created and delivered to staked ATOM holders in two ways on the platform:

Transaction fees: Transaction fees earned on the Cosmos Hub are allocated to ATOM holders who have staked their coins.

ATOM is inflated to reward token holders. Non-staking token holders don’t get incentives, diluting their ATOM.

Cosmos on Social Media





Related articles

(Visited 55 times, 1 visits today)
© Cryptopress. All rights reserved.