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What Is Cosmos (ATOM)?

Both the price and the popularity of cryptocurrencies change over time. However, a few well-known blockchains and currencies, such as Cosmos and its native token ATOM, have been at the top of the rankings for some time. However, how precisely does Cosmos operate, and what may ATOM be used for?
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What Is Cosmos?

Tendermint, a Byzantine fault tolerance (BFT) engine, was the first component of Cosmos. A network may function using a BFT engine (which has proof of stake by design) even if some of its nodes are disabled or under the control of bad actors. Jae Kwon, a blockchain software architect, Zarko Milosevic, and Ethan Buchman are the creators of Tendermint. In 2020, Kwon resigned as CEO, but he continues to serve as the organization's main planner.

The entrance to the Cosmos Network was Tendermint. Tendermint was added into Cosmos when the blockchain was first introduced since it is a consensus algorithm. Tendermint is still the most widely used engine on the network and plays a significant role in maintaining the network's safety and security even if it isn't the only BFT engine that serves Cosmos today.

Both the Cosmos whitepaper and the actual Cosmos software were released in 2019. 2019 saw the introduction of an ICO (initial coin offering), which raised $9 million for project development. We'll get to that a little later. Cosmos' ATOM had a prior ICO that was launched.

How Does Cosmos Work?

According to one description, Cosmos is the "Internet of Blockchains." The reason for this is that the business wants to build a network of interconnected blockchains that can talk to one another. Interacting distributed ledgers make it possible to simplify transactions and move assets from one blockchain to another.

Interoperability is Cosmos' main priority. This phrase describes the capacity for interaction between two systems, such as two networks or two apps.
This is made feasible by the usage of something called the IBC protocol by Cosmos. Inter-Blockchain Communication, or IBC, is a protocol that enables trusted and authorized communication across blockchains. Atomic swaps, token transfers, data sharding, and multi-range smart contracts are all made possible by using an IBC protocol. It addresses, in essence, the different operational constraints that blockchain networks face. Fewer restrictions result from less isolation.

A key concept in blockchain technology is isolation. Blockchains, for instance, are unable to access other data sources without the assistance of additional technologies, notably a blockchain oracle. A blockchain system that use oracles to access external data is the Chainlink network.

Tackling Scalability Issues

Scalability is another area of concern for Cosmos. This refers to something's capacity to expand efficiently as demand and traffic grow, in this example, a blockchain network. In the world of cryptocurrencies, scalability issues are a major problem. Because of the network's unusually high volume of transactions, well-known assets like Bitcoin have lengthy transaction times and expensive fees.
Many blockchain developers nowadays place a high priority on scalability. Any particular blockchain may have an increase in users over time, which will increase the transactional burden. Every transaction on a blockchain has to go through verification, typically by a miner or validator, and it has to wait in the pending queue until it is fully confirmed. An increase in transactions shouldn't significantly affect transaction times or fees if a blockchain, or collection of blockchains, is designed to be scalable.

With Cosmos, this is the situation. With the help of the BFT engine and the proof of stake mechanism, Cosmos can grow its operations more successfully without sacrificing costs or wait times. This is one of the reasons why, starting in September 2022, the highly regarded 2.0 Merge, the Ethereum blockchain began switching from proof of work to proof of stake.

Developers may create blockchain-based (or decentralized) apps more easily by using Cosmos. There is undoubtedly a demand for simpler solutions because blockchain technology may be highly scary. Developers may more easily design blockchains that can communicate with other blockchains in the ecosystem using Cosmos' straightforward framework. Then, how does this operate?

Cosmos's Structure

Zones and hubs are further components of Cosmos' architecture. Developers may build application-specific blockchains on the Cosmos network called zones.

On the other hand, hubs serve as the zones' routers. A zone becomes interoperable when it links to one hub. The first blockchain to be established on the network was called "Cosmos Hub." It serves as Cosmos' central node and monitors the status of each blockchain inside the system. It serves as the network's method for proof of stake consensus. The whole Cosmos ecosystem is built via the cooperation of the zones and hubs.

Decentralized hub architecture is another feature that draws open-source programmers to Cosmos. Furthermore, by dispersing power across several connecting points, a decentralized network can provide better levels of security (or nodes).

The Cosmos ATOM Coin

The Cosmos network features a native coin called ATOM, as is the case for all blockchains that support cryptocurrencies. Early in 2017, ATOM performed an ICO in which ATOM tokens were sold to raise $17.63 million.

The governance system in Cosmos also enables users to vote on suggestions, such as network changes or common problems. To cast a vote in the governance process, users must stake their ATOM money; the quantity of ATOM staked determines your voting power. You have more voting power the more ATOM you stake.

In relation to the proof of stake system, the Cosmos Hub serves as the platform's governance mechanism (hence why you need to stake to take part).

The cost of ATOM is continually changing and is now little over 10 bucks. Late in 2021, ATOM's price peaked at $44.26. However, it suffered significantly in May 2022 as a result of a market-wide crash that touched almost all cryptocurrencies. If you're interested in purchasing ATOM, keep in mind that it isn't backed by anything and that, as a result, its value is quite erratic.
A variety of cryptocurrency exchanges, such as Binance, Kraken, Huobi, and Coinbase, all offer ATOM for purchase. On a variety of services, including exchanges and wallets, this cryptocurrency may also be staked. You may stake your ATOM holdings on a variety of platforms to get incentives, including as Guarda Wallet, Trust Wallet, and Binance.

Cosmos Tackles a Range of Important Issues

Cosmos is made to address a variety of problems with blockchain technology, including chain separation, scalability concerns, and difficulty in use. This makes the blockchain network more usable and accessible for both developers and ATOM owners. Additionally, users of Cosmos may influence how the network develops by using governance.