Beginner's Guide to Cosmos

What is Cosmos?

• Cosmos is a rapidly expanding ecosystem of connected independent blockchains.

  • Cosmos aspires to be the blockchain-centric internet.

• The majority of blockchains operate independently, limiting their economies to their own chains.

  • As a result, the value of DeFi is primarily restricted to Ethereum.

• Switching between blockchains is a very frustrating process, and there are currently many unproven solutions.

• As a result, one of the biggest opportunities in the cryptocurrency sector is making it possible for value to move between different blockchains.

• Cosmos tries to accomplish precisely that, connecting blockchains to maximize the potential of various cryptocurrencies.

Who came up with Cosmos?

• The Interchain Foundation backs Cosmos.

  • The Swiss non-profit organization known as the Interchain Foundation (ICF) was established to encourage the growth of Cosmos and the ecosystem that will contribute to the Cosmos Network.

• The Cosmos Network was developed by Tendermint Inc.

  • The ICF has contracted software development firm Tendermint Inc.

  • Tendermint began developing the initial software in 2014.

• Development has expanded over time to include numerous contributing teams.

What protocol does Cosmos use?

• Cosmos uses the Proof-of-Stake protocol, which allows transactions to be completed in seven seconds and incur fees of less than one cent.

• The Cosmos network is home to more than 250 blockchain applications at the moment. Cosmos was used to build some of the biggest cryptocurrencies, including:

  • Thorchain (RUNE), Terra (LUNA), Binance Chain (BNB), Crypto.com (CRO), and OKEx Chain (OKEx).

  • Cosmos is in charge of digital assets worth about $65 billion.

What distinguishes Cosmos?

• Interoperability: This buzzword in cryptocurrencies refers to a blockchain's capacity to connect with other blockchains.

  • Cosmos uses hubs rather than bridges, which some people consider to be the solution. This makes it possible to transfer tokens without any friction between blockchains—normally, you can only move tokens between two blockchains at a time.

  • The Cosmos protocol for blockchain interoperability, IBC (inter blockchain communication), went live in 2021.

  • When IBC is enabled, Cosmos users can seamlessly switch between blockchains to take advantage of their strengths!

• "Cross-chain composability" is something Cosmos is working on.

  • In addition to the Cosmos ecosystem's interoperability, other blockchain ecosystems, such as Ethererum and Bitcoin, are being connected.

  • For instance, you will be able to borrow money from Aave, a DeFi application based on Ethereum, and then lend it out on Polkadot.

• Autonomy

  • Projects can launch their own sovereign blockchains when they build on Cosmos.

  • This means that they are not bound by the rules of any layer 1 protocol (as opposed to applications built on top of a blockchain like Ethereum, which are like tenants in a building owned by someone else).

  • As a result, blockchains can transfer value without having to deal with the problems that some of the largest blockchains, like Ethereum, have, such as high fees.

  • Cosmos-based projects can develop at their own pace, create their own economic model, and charge low transaction fees.