What is Cosmos ATOM?

Hey everyone, I’m Kris with Exodus. If I
asked you a question about being a developer to set out and solve the problems of scalability,
usability, and sovereignty inherent in many blockchains, you might end up with something
that looks a lot like Cosmos. Aptly named because of the mental image we get when thinking of our galaxy and how the
various elements exist individually but are bound and interact together by a universal
force, this, of course, is gravity. Now, I know you’re not here for a science lesson, so let’s move on and take a more
in-depth look at the Cosmos network and the ATOM cryptocurrency. In a nutshell, Cosmos
Network is a decentralized ecosystem of independent blockchains that can scale and connect to
one another. This includes not only blockchains that are built on Cosmos, but also external
blockchains such as Bitcoin and Ethereum through what’s called a peg zone. More on that in
just a few minutes but first let’s put a name to this process.

Cosmos has already done
some of the hard work for us here and has named this an “Internet of Blockchains”
or “IoB” for short. Let’s hear how Cosmos inventor “Jay Kwon” 
explains this…“Each individual blockchain maintains control of its own governance, but
is interoperable with other blockchains in the network. Blockchains that do not utilize
BFT algorithms can be connected to the Cosmos network via “adaptor” blockchains. Cosmos
was not designed for one particular use case, but to be adaptable to suit many different
use cases.” Pretty simple stuff, right? Well once we get
all the fancy acronyms down we can start to get the technology out of the way and understand
what cosmos does and how it works on a basic level. The Cosmos network is a dual-layer
blockchain ecosystem with native token Cosmos “ATOM” to power its transactions. The
first layer packages the networking and consensus layers of a blockchain into a generic engine,
This allows developers to focus on the application development instead of the protocol which
makes the network run.

Ethereum was the first to simplify the application
development through smart contracts, but as Dapps, not independent blockchains. This first layer is called Tendermint BFT.BFG
No, not the big friendly Giant. BFT stands for Byzantine Fault-Tolerance and
is the consensus mechanism of the Cosmos network, which as I said before, includes the networking
functions which are responsible for transmitting transactions and consensus-related messages. The second layer is the application layer,
where the Cosmos SDK is used for individuals to create their own blockchains.

The Cosmos
SDK will translate many different popular programming languages such as, Java, C++, and others for example. At the time of recording, ATOM is worth about
4 dollars with a market cap of around 757 million dollars. And about 100 million of
that moves around the markets every day. ATOM is a Proof of Stake coin, which means
that you can delegate your tokens into a validator pool and earn rewards on your holdings. The
more ATOM you stake, the more you earn. Staking, however, locks up your ATOM and, if you want
to unstake them, the cooling-off period is 21 days. Cosmos ATOM is sitting at #23 in the overall
crypto market cap and is listed on the most popular exchanges. If you would like a wallet
to exchange, hold and stake your ATOM, you can use Exodus. Exodus is a cryptocurrency application for
your mobile device or your desktop that’s home to over 100 cryptocurrency wallets and
other crypto apps, check the link above to learn more and download exodus today? So how does Cosmos fit into the overall ecosystem,
and why is there a need for another platform? We touched on this at the beginning of the
program.

1. Scalability
2. Usability 3. Blockchain sovereignty In the past, scalability was an issue because
of the lack of throughput Proof of Work systems can ultimately handle. This is a fancy way
of saying how many transactions a network can process at a given time. In order to scale, the options were to either
fork code or build on top of it, which in a codebase that's monolithic – meaning applications,
networking and consensus are mixed together – this becomes very difficult.

Ethereum was the first network to solve this
additional application problem by utilizing smart contracts in what is called an Ethereum
Virtual Machine. Developers could use this to deploy applications to the ETH network.
ETH only runs at about 15 transactions per second and we’ve seen many instances where
the network has been ground to a halt with pending transactions. There’s also the limitations of the governance
structures on ETH. Since apps run on the underlying platform they need to abide by the Ethereum
governance rules.

Cosmos gives us a good example here. “If there is a bug in the application, nothing
can be done about it without the approval of the governance of the Ethereum platform
itself. If the application requires a new feature in the Ethereum Virtual Machine, it
again has to rely entirely on the governance of the Ethereum platform to accept it.” As you can imagine, this could complicate
the development and usability of applications. This sovereignty issue is not limited to just
ETH.

Other similar blockchains have this same issue. Enter Cosmos. Cosmos solves these problems
by allowing developers to build individual blockchains with their own custom governance
structures. It enables them to transact with each other via a common and generic consensus
and networking layer. Can you see now why they refer to it as the
internet of blockchains? This is accomplished through a modular architecture of what they call Hubs and Zones, which allow entirely separate blockchains to transfer tokens to each other with an IBC connection, this craftily stands for “Inter-Blockchain Communication protocol“ and can be thought of as the glue that holds everything together. IBC allows these separate blockchains to transfer
tokens, and it could be done with a serial connection for each Zone where they move information
down a chain.

But this can be slow. If we looked at a model where every zone is
connected to another zone, it would be a mess. So, here comes the Hub, Hubs are specialized
blockchains to connect zones together. This helps increase speed because once a zone
creates an IBC connection with a hub, it can quickly and automatically connect to any other
zone that’s attached to the hub. The first hub launched in the Cosmos Network
was the Cosmos hub, you gotta start somewhere, right? I kind of saved the best for last and what
I think is the coolest aspect of cosmos. It’s the ability to interact with other blockchains
outside of the Cosmos ecosystem. I’m talking interoperability with BTC, ETH, TRX, and well
any other blockchain out there, forget about atomic swaps, this is the real deal – on chain. How? It’s Magic. No, I’m just kidding. This is done through
a Cosmos created proxy like chain called a peg zone. According to Cosmos… “A Peg-Zone is a blockchain that tracks
the state of another blockchain.

The Peg-Zone itself has fast-finality and is therefore
compatible with IBC. Its role is to establish finality for the blockchain it bridges.” So if I want to trade a lama from Lama chain
for a Taco from taco chain, Cosmos can facilitate that for me. The assets can be on the cosmos
network, a proof of work blockchain like bitcoin or ethereum or a proof of stake network like
NEO, or ALGO, or ADA or XTZ, any way you get the point.  Pretty cool, huh? So why should a developer choose to build
on Cosmos instead of another network, I guess it all depends on what their criteria is.
As we’ve seen, there are many similar implementations of various projects because individual needs
are diverse.

These diverse needs are one of the major selling points of the Cosmos ecosystem
made possible by interchain interoperability. Now that we’ve journeyed into the Cosmos
and made it back, what do you think about the future of this project? What is your Cosmos
price prediction? And, If you found this video to be useful, please make sure to hit the
like and subscribe buttons for more crypto videos from Exodus and until next time.. HODL on!.

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