With the high likelihood that there will be
a huge number of blockchains operating simultaneously in the future, it seems that a focus on interoperability
between different blockchains is crucial to the advancement of blockchain technology. Two major contenders have risen up
that lead the charge toward that goal— Polkadot and Cosmos. While both protocols utilize similar architecture, there are a number of important
differences between them and within their respective ecosystems as well. While Polkadot is getting a ton of acclaim, Cosmos is one that is vastly underrated. Find out why and how high
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Welcome to BitBoy Crypto! My name is Ben. Everyday on this channel, I show you
how to make money in cryptocurrency. If you like money and crypto,
then make sure to hit that subscribe button. In today's video, we will compare
Polkadot and Cosmos, looking at their tech and their ecosystems. But stick around through the tech part
because even if tech isn't your thing, at the end of this video, I'm going to give you my
price prediction for Cosmos and then you're going to have to wait for my next
Polkadot video to get my DOT price prediction.
But if tech videos are your thing, then smash that like button for us
so we know you like these types of videos. Interoperability between different blockchains is
fundamental to the scalability of the decentralized web aka Web 3.0. Both Polkadot and Cosmos use similar models
to achieve this network of interoperable blockchains. However, there some key differences
between both protocols to point out as well. Both Polkadot and Cosmos have a system
of subchains that connect to a main chain, like spokes connecting to a main hub. However, Polkadot uses a sharded model where each shard in the protocol is
the subchain called a parachain.
Each parachain connects to the main chain
which is called the relay chain. Developers can use the Substrate development framework to effortlessly build application-specific parachains that connect to Polkadot's relay chain. Each parachain functions as its own
blockchain within the Polkadot network. This means that each parachain
has its own state machine and can utilize any number of unique functions
including different consensus algorithms, different gas models and more. Each parachain has its own local block
producers which are called collators. Across the Polkadot network, each parachain
has an abstract state transition function or STF, and the state of each parachain is combined
to create the global state of the relay chain. The relay chain validates the state
transition of all connected parachains which creates a sharded state for all
parachains across the entire system. Polkadot uses a unique consensus
algorithm to do this called GRANDPA. On Polkadot, parachains operate
under a shared security model, meaning that if the relay chain is highly secure, then all parachains connected to
the relay chain are equally as secure. One downside to this model is
that the inverse is also true, meaning if the relay chain isn't very secure, then the parachains also will not be very secure.
Also, this creates the possibility of malicious validator
rejecting blocks coming from collators of a certain parachain, thus preventing the parachain's progress
from being combined into the global state. In order to reduce the possibility of this happening, Polkadot shuffles the validators, forcing them to validate random parachains, reducing the likelihood that a validator
could censor a specific parachain. In addition to that, Polkadot has a second
group of validators called fishermen, who constantly check all the validators
for malicious activity.
Cosmos functions similarly with a spoke and hub
model using a main chain and a sidechain. On Cosmos, the main chain is Cosmos Hub
and the sidechains are called zones. Developers can use the Cosmos SDK framework to effortlessly build custom application-specific zones that connect to a hub. And, no, not that hub. However, one difference from Polkadot is
that Cosmos allows for multiple hubs. Also, Cosmos does not use sharding, so each zone
and hub is independent with its own validator set. Another main difference is that unlike Polkadot, where the security of the parachains is
dependent on the security of the relay chain, on the Cosmos network,
every hub and every zone is independent and secures itself. Each hub and zone runs its own
Tendermint BFT consensus mechanism. And the state of each hub and zone is secured
only by the validators from that specific hub or zone. Now, one downside to this model is that the state of
each hub and zone is secured by its own validators. There's no sharing. Unlike Polkadot which shuffles validators randomly, Cosmos makes the security of each hub
and zone dependent on the validators and the number of validators it has.
To have strong security, it's imperative that a hub
or zone has a large number of validators. Unfortunately, for some smaller
projects or applications, it may be difficult to recruit enough validators
to have the necessary security required. However, some projects may
consider this to be a selling point because it gives those projects more autonomy
and control over the validation process. Now, let's take a look at the ecosystem
around each of these projects. When it comes to Polkadot and the teams
and projects building on Substrate, they have quite a few.
One quick look at this page shows 130 different teams
or projects currently in the Polkadot ecosystem. This includes some big names such as Ankr,
Band Protocol, Chainlink, Everstake, Injective Protocol, Kusama, Ledger Integration,
Ontology, Polymath, SushiSwap and Trust Wallet. So Polkadot is definitely a very popular platform
and Substrate is a very popular framework with tons of interesting projects
and teams utilizing it. Taking a look at Cosmos, as of right now, their website shows 247 different teams
or projects currently in the Cosmos ecosystem.
And that's kind of ironic because
this project is also working 24/7 itself. This includes some pretty well known
projects, of course, such as Ankr, BAND, both Binance Chain and Binance Smart Chain,
Crypto.com, Dash, KAVA, MATIC, OKExChain and Injective Protocol, just to name a few. Now, we're actually about to do
a video on Injective Protocol as well, so make sure to check that out on Monday.
There's some major teams and projects
of course in the Cosmos ecosystem, so when it comes to that one, as of right now, Cosmos actually has nearly double
the teams and projects than Polkadot has, giving them a clear advantage. However, when it comes to high quality
functionality and usability, I would say that Cosmos and Polkadot
are very close to each other, so the race there is really neck to neck. That is why you may have noticed some projects
like Ankr, BAND and INJ were mentioned twice because they're building on both.
Instead of choosing between the two
of these excellent protocols, they're going to utilize functionality
from both protocols. I like to have my cake and eat it too as well. So it's possible that both projects could continue
to grow and be successful in the future. One interesting to note is that as of right now, more centralized exchanges
and decentralized exchanges like Binance Chain, Binance Smart Chain,
Crypto.com and OKExChain are building on Cosmos, whereas it seems that Polkadot is being used a lot
for oracle solutions such as BAND and Chainlink.
It'll be very interesting to see
if this trend continues in the future and if each protocol ends up being commonly utilized
for certain specific functions, use cases and niches. But here's the main thing I want you
to take away from this video. Cosmos and DOT are not that far apart, but they are far apart in market cap. When you see gaps like this, this is where the potential for lower
ranked projects comes into focus. And Cosmos has so much potential,
it's reaching for the stars. It's been on the backend working and building
while other projects are reaping rewards. Eventually, Cosmos will get its turn. I see a huge run-up in the future for the ATOM coin. It's essentially at its all-time high right now,
but there's still so much more room for it to go. I believe Cosmos will see its valuation rise, and the price of ATOM will reach
$140 per coin in this bull run. What do you guys think? Is Polkadot all it's hyped up to be? Or is Cosmos with nearly twice the projects
in their ecosystem going to take the top spot? Or will each be used for different
applications in the future? Drop me your comments down below
and don't forget to smash that like button.
That's all I got. Be blessed. BitBoy out..