What is Cosmos (ATOM)? Everything to Know About Cosmos

Cosmos is the “Internet of the Blockchains” designed to bring different blockchains to a single platform to streamline the transactions between these networks. The problem with most blockchain platforms is that the users can’t transfer data from one network to another as it may affect the decentralization process.

As a result, users have to go through a complicated process when transferring data from one platform to another. In most cases, they have to deal with a third party while transferring data between networks. Cosmos is focused on building an ecosystem where users can share data and tokens programmatically between different networks.

What is Cosmos?

Cosmos is an ecosystem where different blockchains can coexist with their own advantages and use cases. It’s dedicated to fixing the scalability and interoperability issues in the crypto world. Different blockchains can connect and share data with each other using this platform. It even enables users to build their own custom blockchains within a few months and even weeks.

Cosmos Brief History

Cosmos was launched by The Interchain Foundation in 2014. Ethan Buchman and Jae Kwon are the developers and co-founders of this project. The Interchain Foundation raised around $17 million in 2017 through an Initial Coin Offering. The network was widely tested through Game of Stakes in December 2018.

The official mainnet of Cosmos was launched in March 2019. The Internet Blockchain Communication Protocol was launched in February 2021. Cosmos has emerged as one of the most popular platforms over the years.

How Does Cosmos Work?

The Cosmos network consists of three different layers:

Networking – This layer facilitates communication and transaction between blockchains that are connected to the main network.

Application – The transaction processing takes place on this layer and it also stores the data of transactions processed over time.

Consensus – Helps with organizing transactions that are added through the nodes.

Cosmos Uses a Set of Open-source Tools

Cosmos is pretty much similar to Polkadot because Polkadot also provides an ecosystem of interoperable blockchains. But the difference is that Cosmos enables blockchains to have their own validators and have their own governance to ensure the safety of their network.

The Cosmos Network consists of three elements:


Tenderming is a blockchain consensus protocol that maintains a copy of the Blockchain’s data through multiple nodes that are connected to the network. This protocol is Byzantine Fault Tolerant (BFT) which means it can confirm transactions even if there are some malicious participants.

The validators can stake their ATOM tokens to participate in the transaction processing. Those, who don’t have the required amount of ATOm tokens, can delegate their tokens to the other validators to earn a portion of rewards.

Tendermint offers a number of benefits including:

High Performance – Tendermint can process hundreds of transactions per second. And it has a block time of around 1 second.

Security – It’s easy to hold accountability if the network creates two different histories of transactions.

Suitable for Public and Private Blockchains – The Cosmos blockchain maintains the data of transactions. However, the developers can customize the application layer.

Fast Transaction Finality – Transactions are immediately confirmed on this network. It enables users to accept transactions with fewer block confirmations.

The Cosmos SDK

The developers can build custom blockchains using this open-source software development kit. Although Tendermint Core is the default consensus mechanism of this software, the developers can use a range of pre-built modules. The developers can even design new features and traits with the help of plug-ins.

Cosmos SDK doesn’t only support the public Proof-of-Stake blockchains but it also supports permissioned Proof-of-Authority blockchains. Binance Chain is one of the most popular examples of blockchains built using this network.

The Inter-Blockchain Communication Protocol (IBC)

It’s the most important part of the blockchain network that connects the blockchain networks to each other. Thus, users can transfer funds from one blockchain to another without dealing with a third party.

Understanding Cosmos Zones

Each blockchain that is connected to this network is called a zone. The blockchains exist in the form of sidechains and they run in parallel without affecting each other’s performance. Each zone is independent to validate its own transactions, mint tokens, and perform other tasks. Still, these zones can interact with each other if they have permission to do so.

The zones use Hub & Spoke architecture to connect with each other. The hubs act like routers enabling blockchains to transfer data to each other. If a zone is connected to a Hub, it can connect to other zones that are connected with the hub. However, the zones are free to decide whether they need to interact with a particular zone or not.

Understanding the Cosmos Hub

The Cosmos Hub is a primary unit that establishes a connection between different zones (blockchains). It uses Inter-Blockchain Network Protocol to transfer information between the zones that are connected to the Hub. Whenever a transaction is processed, the data is stored on three different blockchains.

What are the Use Cases of ATOM?

With a market cap of $7.8 billion, ATOM has a circulating supply of 286 million coins. It has the 22nd rank in terms of market cap.

Transaction Fee – The ATOM is used to pay the transaction fee on the network. The transaction fee may vary depending on the computational power required for the transaction.

Staking – The ATOM holders can stake their tokens to become validators and earn rewards. If someone doesn’t have the required amount of ATOM tokens to participate in the process, they can delegate their coins to other validators.

Governance – The ATOM token holders also have voting power in the platform decisions. Voting power varies depending on the number of tokens a person holds.


Cosmos is the “Internet of Blockchains” that establishes a connection between different blockchains. It has a secure network where users can transfer data from one blockchain to another without dealing with a third party. We’ve shared information about how its structure works. Feel free to leave a comment if you need more information about Cosmos infrastructure.

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