Cosmos: Extending Blockchain Systems Options

What is Cosmos?

Recently at the forefront of innovation in the WEB3 world is Cosmos — a decentralised network of independent parallel blockchains connected by powerful consensus algorithms. This concept solves the main problems faced by traditional blockchains, namely isolation, poor scalability, and limited bandwidth.

At the heart of the Cosmos network is its decentralised structure of independent and interoperable blockchains. By enabling seamless communication between blockchains, Cosmos opens up a wide range of opportunities for creating decentralised applications and services. The ultimate goal of the project is to create an Internet of Blockchains — a network of blockchains that can communicate with each other in a decentralised way.

Toolkit

To empower blockchain systems, Cosmos utilises a number of tools developed by the project team:

Inter-Blockchain Communication Protocol (IBC)

IBC is a communication protocol to enable secure, streamlined, and authenticated data exchange between blockchains. This protocol provides a bridge between different blockchains and enables their secure communication. The IBC mechanism provides a set of data structures, abstractions, and semantics that can be implemented by any blockchain.

Cosmos SDK

Cosmos SDK is an open-source framework that allows you to build blockchains with Proof-of-Stake (PoS) and Proof-of-Authority (PoA) mechanisms. The main goal of Cosmos SDK is to facilitate the development of custom blockchains from scratch that can natively interact with other blockchains. Blockchains built with the Cosmos SDK consist of component modules, most of which are open-source and available for use by all developers. Anyone can create their own module for Cosmos SDK, as well as integrate existing modules by simply importing them into their blockchain application.

Many specialised blockchains have already been created with the Cosmos SDK and are functioning successfully. These include Cosmos Hub, IRIS Hub, Binance Chain, Terra, and Kava, to name a few.

Tendermint

Tendermint is software for secure and consistent application playback across multiple machines. It works even if up to 1/3 of the machines fail. Tendermint ensures homogeneity of the transactional log and computation of the same state on all serviceable machines. This is a fundamental problem in distributed systems and plays a key role in the resilience of many applications. Tendermint BFT is a consensus algorithm that combines blockchain layers into a universal engine, allowing developers to focus on building applications without having to think about complex protocols.

The Internet of Blockchains: The Main Goal of the Project

The Internet of Blockchains technology aims to link every blockchain in the network to every other blockchain through direct IBC connections. However, the problem is that the number of connections in the network grows quadratically with the number of blockchains. If there are 100 blockchains in the network, and each blockchain must maintain an IBC connection to all the others, about 4,950 connections would be required, resulting in poor manageability.

To solve this problem, Cosmos proposes a modular architecture with two classes of blockchains: Hubs and Zones. Zones are regular blockchains, and Hubs are blockchains specifically designed to connect Zones to each other. When a Zone creates an IBC connection to a Hub, it automatically gains access (i.e., can send and receive data) to every other Zone associated with that Hub. As a result, each Zone only needs to establish a limited number of connections to a limited set of Hubs.

The first blockchain launched in the Cosmos network is Cosmos Hub, a public Proof-of-Stake blockchain where the underlying token is ATOM, which is used to pay transaction fees. In other blockchains built in the Cosmos ecosystem, payments are made with the native tokens of those blockchains. Cosmos Hub’s native token, ATOM, is used for transaction fees, staking, and voting to manage the network.

Each zone is connected to another through hubs, where Cosmos Hub is the main one, but other hubs are also available. It should be noted that each zone or hub does not have to interact with the others, but each new zone is linked to Cosmos Hub, which keeps a record of the state of each zone and vice versa. Cosmos Hub itself is an extremely powerful decentralised blockchain network whose structure and governance allow the network participants to maintain equilibrium — with the ATOM token serving as a staking mechanism to ensure security, consensus, and efficiency of operations.

Conclusion

Cosmos has the potential to become the foundation for a decentralised internet and financial system in the WEB3 world. It offers scalable solutions for both horizontal and vertical scaling of blockchain applications, opening up opportunities for millions of users. The Cosmos project has already proven its effectiveness with registered protocols including Cosmos Hub, IRIS Hub, Binance Chain, Terra, Kava, and many others. ATOM, the native token of Cosmos, is gradually consolidating its position.

But most importantly, Cosmos is not just a product, but an ecosystem based on a set of modular and flexible tools. Developers are involved in constantly improving existing tools and creating new ones. In this way, Cosmos takes blockchain technology to the next level, opening up new opportunities for hundreds of thousands of developers, users, and businesses. The project is a promising and significant initiative that could be key to the development of a decentralised WEB3 future.