The word Cosmos is synonymous with the word universe, which is exactly what Cosmos (ATOM) is creating in the crypto industry. Cosmos is a layer 1 cryptocurrency that powers an ecosystem of blockchains. It is structured in a way to scale blockchains together and allow them to interoperate and communicate with outside blockchains, bridging them to the network. In summary, their mission is to create an internet of decentralized blockchains.
About Cosmos
The whitepaper was created in June 2016, using the Tendermint consensus protocol to bring the interoperable blockchain system to life. The project really kicked off in June 2017 when it attracted an Initial Coin Offering of more than $16 million USD.
To create an internet of blockchains, Cosmos has a variety of open-source tools such as Cosmos SDK, IBC, and Tendermint. These can be used to build secure, scalable, and interoperable custom dApps on the Cosmos ecosystem. These tools simply processes such through a variety of ways:
Packaging network and consensus layers into a generic engine.
Conversion to any type of programming language to allow a variety of programmers to work on the network.
Automated transactions, governance, slashing, and staking actions without requiring app oversight.
These processes and many others allow creators and builders to focus on developing a unique app rather than spending a great deal of time on complex underlying protocols.
The Competition
Cosmos has two major competitors, with the most direct competition being Polkadot, and then Ethereum. Both these networks are well-constructed, and have a large number of functioning dApps. Ethereum already has just shy of 3000 active applications right now, while Polkadot has 253. In comparison Cosmos has 265 apps running on its network.
While Ethereum is very spread out in covered sectors, Polkadot deals with more operational dApps, while Cosmos maintains a very high DeFi presence. One potential change Cosmos will have to look out for is regulation, as DeFi is a sector expected to be heavily regulated in comparison to most other crypto sectors. This could be either good or bad for Cosmos, depending on what happens and how they prepare and react to it.
Advantages
Cosmos currently holds several advantages over its competition:
The SDK and IBC protocols enable 100% sovereignty and usability, something ETH 2.0 is expected to still struggle with.
Cosmos uses two main architectural components – hubs and zones – to ensure blockchains can communicate clearly and safely.
The modular, adaptable, and interchangeable tools on the network far surpass Ethereum’s and Polkadot’s as far as versatility, capability, and ease of use.
Cosmos is set to bring improvements to interchain security, as well as new staking protocols that display live and clear data in wake of the recent staking issues in the crypto space.