This is a fun blog post I wrote for a client named Ben - a self described "crypto bro." Ben was looking to flesh out his blog with content to help promote his crypto themed YouTube channel. His biggest concern was offering his readers content that broke down complex topics in terms anyone could understand. Let me know how I did!
The Internet of Blockchains: A Guide to Actually Understanding the Cosmos Ecosystem
Since its inception, Cosmos has been heralded as the “Internet of Blockchains.” Sounds impressive, right? But what exactly does that mean and how does Cosmos work?
What sets Cosmos and its native token, ATOM, apparent from other blockchains? If these are the questions that keep you up at night – or maybe just make you curious – you've come to the right place.
Join us for a breakdown of Cosmos and what it brings to the table. We'll walk you through what makes the Cosmos ecosystem so unique - with words you don't have to speak crypto to understand.
What Is Cosmos (ATOM)?
Cosmos defines itself as “a decentralized network of independent parallel blockchains, each powered by BFT consensus algorithms like Tendermint consensus.”
Okay, great. But let’s back up the truck a little bit.
In order to wrap your head around what Cosmos is, it’s helpful to start by understanding the problem it solves. To help explain, let's get all metaphorical and imagine blockchain technology as a newly discovered nation in the world of cyber space.
As humanity entered the 21st century, word began to spread that there were huge tracks of untamed cyber land out there just begging to be explored. Soon, bold developers everywhere began packing up their metaphorical wagons and venturing forth to stake their claims.
But after this had gone on for awhile, people began to realize that there was a bit of an issue. Our settlers had created lots of different towns throughout the blockchain nation, each with its own set of laws. This alone wouldn't have necessarily been an issue, expect that there were no roads connecting these towns, leaving them with no way to communicate or interact with each other.
The “Internet of Blockchains” Concept
Enter Cosmos - a scrappy yet forward-thinking band of pioneers who decided to create their own blockchain state where interconnectivity wasn't an issue. So, the developers at Cosmos staked their claim atop an open-source layer 0 blockchain.
Rather than building their own towns or communities throughout the free state of Cosmos, the developers focuses instead on creating a killer road system. They then flung open the doors to their state and announced that it contained plenty of free tracks of interconnected land waiting to be settled.
As the word spread, Cosmos encouraged any would-be settlers to wagon on in an knock themselves out. To this day, anyone is welcome to join the party and build their own blockchain town (hub) and custom environments (zones).
Best of all, each blockchain town can use utilize whatever governance style it sees fit, even if their neighbors happen to be using a whole other system altogether. Given the stellar road system Cosmos offers, countless blockchains can live together in harmony, all while communicating and interacting with each other.
Technically speaking, this road network is known as the Inter-Blockchain Communications (IBC) protocol. It's what allows all those blockchain settlements to coexist while maintaining the freedom to do their own thing.
The Key Components of Cosmos
But there are two other core concepts you need to familiarize yourself with in order to really understand what makes Cosmos so great. Let's take a closer look at the two central components that Cosmos is built on: its software development kit (SDK) and its Tendermint Core consensus mechanism.
Cosmos SDK is an open source framework that makes it easy for developers to building their own blockchain creations. Whether you want to build from scratch, using pre-built modules, or a mixture of the two, Cosmos SDK has got you covered.
If you've ever built a website or created a hilarious cat meme using a drag-and-drop tool, then you'll understand firsthand how much time pre-built modules can save. Not to mention that such tools allow more users to do all kinds of cool things in cyber space without having to speak code.
The Cosmos SDK also makes it easy to connect to other towns... er, blockchains, on the Cosmos Network. This can go a long way towards upping your liquidity and adaptability game.
Tendermint Consensus Mechanism
While the Cosmos SDK is all about the application layer, Tendermint tackles the consensus and networking layers of blockchain development. For those among us who speak tech, Tendermint is a proof-of-stake (PoS) Byzantine fault tolerance (BFT) consensus mechanism.
In case you’re unfamiliar, BFT consensus mechanisms are a handy solution to a game theory dilemma called The Byzantine General’s Problem. To understand this issue, imagine a group of generals who all plan to attack the same unsuspecting city. Each is lurking with their own army in a different area surrounding the city as they plot their next move.
You don’t have to be a military genius to guess that its going to be pretty important for all the generals to get on the same page before mounting their collective attack. This issue is that all the generals have to rely on a series of courier messages to negotiate a group decision.
But what if one of the couriers gets captured or drops dead of dysentery in route? There’s even the possibility of a particularly feisty courier going rogue and acting maliciously. That’s where the Byzantine fault tolerance (BFT) system comes in.
Simply put, a BFT is decided to ensure that if any of these issues do occur, it won't necessarily be a disaster. The system's set-up insures that no major actions can be taken without a minimum 2/3 group consensus .
In other words, the system can resist up to 1/3 of the nodes going nuts or being infiltrated by bad actors. Cosmos’ consensus mechanism also works on a proof-of-stake (PoS) model, which is not only cheaper, but 99% more carbon-friendly than proof-of-work (PoW) models.
In late 2022, Cosmos released a whitepaper detailing what's in store for its near future. The 27-page document outlines changes that will be rolled out to help the Cosmos ecosystem evolve over the next three years.
While the paper itself is a bit heady, it does address one of the key issues for ATOM investors. Due to the fact that all the different blockchains on the Cosmos Hub are allowed to have their own tokens, there’s never been much of a need for anyone to rely on ATOM.
Unsurprisingly, this has kept ATOM's value from enjoying much growth. That’s why Cosmos 2.0 is introducing some innovative ideas that will make ATOM more valuable while making the ecosystem better as a whole. Here’s a look at some of the features that will soon be coming to a Cosmos ecosystem near you.
There’s strength in numbers, right? Cosmos will soon allow individual blockchains in their ecosystem to capitalize on this maxim by borrowing validators from other networks.
To put it in terms of our metaphor, imagine a small town in Cosmos land. While the town is happy being small, it’d be in deep trouble if a large gang of rogues decided to roll in and take over.
Interchain security will give such towns the option to bus in high-end security from other, larger cities.
Staking allows users to earn interest by staking their tokens as collateral for a certain amount of time. This more or less works on the time honored principle of loaning someone money in exchange or interest. By allowing wrapped ATOM tokens to be staked across the Cosmos ecosystem, Cosmos hopes to give the coin more utility and increase its value.
We hope this has given you a better idea of what the Cosmos ecosystem is and how it works! Now go forth and use your newfound knowledge to create new worlds - or just make impressively knowledgeable remarks at dinner parties.