The Cosmos (ATOM) network is a blockchain ecosystem that can scale and interoperate. Cosmos aims to build an Internet of Blockchains in which blockchains can maintain sovereignty, interact with other blockchains in the ecosystem, and process transactions quickly, making it ideal for a variety of use cases.

The network operates on BFT consensus algorithms as well as Tendermint consensus, which powers each blockchain in the Cosmos. The Cosmos Hub and the Cosmos SDK are powered by Tendermint BFT, a proof-of-stake consensus protocol (software development kit). BFT (Byzantine fault tolerance) is a distributed network consensus algorithm that achieves consensus even when some network nodes respond with incorrect information or fail to respond.

The Cosmos SDK is an open-source framework designed to help developers create multi-asset public proof-of-stake (PoS) blockchains. The Cosmos Hub is a blockchain that serves as the Cosmos platform’s economic center. The Cosmos Hub intends to offer interchain token exchange, interchain security, ETH and BTC bridges, and interchain token custodianship.

Blockchains, according to the Cosmos whitepaper, are isolated and cannot communicate. They are difficult to construct and can only handle a limited number of transactions per second. Following that, Cosmos addresses three blockchain-related issues: sovereignty, scalability, and sustainability.

• Sovereignty: All economic activity on blockchains occurs on a single chain. This results in centralized governance, ongoing costs for smart contract developers, and high fees for congested chain users. To address this issue, Cosmos SDK aims to be free for developers to use in order to create sovereign blockchain apps with no ongoing costs.
• Scalability: Through horizontal and vertical scalability solutions, Cosmos aims to enable blockchain applications to scale to millions of users. Cosmos aims for scalability by either duplicating a blockchain to relieve congestion or dividing the apps into multiple application-specific blockchains. Interchain token transfers allow these various chains to function as a single network. Additionally, developers can increase throughput by utilizing horizontal scalability (multiple parallel chains running the same application and operated by a common validator set).
• Sustainability: Cosmos blockchains secure the network with an efficient proof-of-stake (PoS) consensus algorithm. When compared to proof-of-work blockchains, this PoS algorithm reduces the Cosmos carbon footprint by more than 99%.

ATOM is the Cosmos Hub’s primary token, and it aims to secure the Hub’s interchain services. On the platform, ATOM has three use cases.

1. The Cosmos Hub’s primary token, ATOM, aims to secure the Hub’s interchain services. ATOM has three use cases on the platform.
2. ATOM can be “bonded” to earn block rewards as a staking token. The amount of ATOM staked determines the economic security of Cosmos Hub. More tokens are collateralized, which means more shares are at stake, and the cost of attacking the network rises. As a result of having more bonded ATOM, the network has greater economic security.
3. By voting on the proposals, ATOM holders can govern the Cosmos Hub with their staked ATOM.

What Makes Cosmos Unique?

The levels of fragmentation seen in blockchain networks are a major source of concern for some in the crypto industry. There are hundreds of them, but only a few of them can communicate with one another. Cosmos intends to flip this on its head by making it possible.

Cosmos is billed as “Blockchain 3.0,” and as previously stated, one major goal is to make its infrastructure simple to use. The Cosmos software development kit focuses on modularity to that end. This enables the creation of a network using pre-existing code chunks. In the long run, it is hoped that complex applications will be easier to build as a result.

Another priority is scalability, which means that significantly more transactions can be processed per second than traditional blockchains like Bitcoin and Ethereum. If blockchains are to be widely adopted, they must be able to meet demand as well as existing payment processing companies or websites — if not better.

Cosmos Interchain Accounts Upgrade

On February 17, 2022, the Interchain Foundation, a non-profit organization within the Cosmos ecosystem, announced the release of the Interchain Accounts upgrade. The Inter-Blockchain Communications (IBC) protocol, which was launched in April 2021, is the Cosmos standard for blockchain interoperability.

It enables a single blockchain to control an account on a different chain. Currently, 38 projects use IBC, including Terra, the Crypto.org chain, and the Gravity bridge. The Interchain Accounts upgrade will be the most significant to the ecosystem since Stargate, which allowed Cosmos blockchains to connect with each other for the first time using the standardized IBC protocol. Interchain Accounts allow users to stake, vote, swap tokens, and do other things on other blockchains.

The upgrade is intended to “enable composability in BC, allowing innovation in distinct applications to be deployed without the need to upgrade the entire Interchain.”