Cosmos is a decentralized network that aims to solve the scalability and interoperability issues that many blockchain networks face.
In this beginner's guide, the editors of Acryptoinvest.news will look at what Cosmos is, how it works and why it is gaining momentum in the world of cryptocurrencies. So, let's dive in and learn more about this digital currency.
What is Cosmos?
Cosmos is a blockchain ecosystem often referred to as the “Internet of Blockchains.”. The ecosystem consists of hundreds of different blockchains that can communicate with each other and easily exchange tokens among themselves.
All blockchains are built on open source Cosmos technology, which is available through the software development kit. This approach minimizes complexity and gives developers the freedom to add any functionality they want.. The suite provides general functions such as betting and management.
In addition, many of them use the inter-blockchain communication protocol to ensure secure communication between blockchains. This is what allows messages and tokens to be sent between chains.
Cosmos Hub: ATOM on the Cosmos network
By delving deeper into the Cosmos ecosystem, Cosmos Hub occupies a unique position.
It serves as the main hub in the network to which each new zone or blockchain decentralized application connects.. Cosmos Hub ATOM+, the first blockchain to launch on the Cosmos network, records the state of each zone and vice versa, allowing for seamless interaction and communication between zones. Each zone is autonomous and capable of performing functions such as authenticating accounts and transactions, creating and distributing new tokens, and making changes to the blockchain.
Many networks in the Cosmos ecosystem are focused on specific use cases. For example, Osmosis primarily serves as a decentralized exchange, although it has upcoming competition as dYdX is launching its own chain based on Cosmos.
Cosmos Hub also facilitates interoperability with other PoW blockchains such as Bitcoin and Ethereum via bridges. This connectivity extends to blockchains that do not necessarily comply with the Cosmos protocol.
ATOM's own cryptocurrency plays an important role in the Cosmos Hub. Network participants can stake ATOM, receive rewards, and potentially become validator nodes. Validators ensure the functioning of the blockchain and vote on changes. The more ATOM stakes, the higher the validators' voting rights. Users can delegate their tokens to validators, promoting fair operations. They can switch between validators depending on their voting preferences, allowing for flexibility.
Other blockchains can also rely on Cosmos Hub security using the security replication feature. This allows them to run without their own set of validators.
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What is IBC?
Inter-Blockchain Communication (IBC) is a core feature of the Cosmos ecosystem designed to facilitate communication, data transfer, and interoperability between independent blockchains.. Unlike traditional blockchains, which operate in silos, IBC bridges the connectivity gap by allowing these chains to communicate and exchange messages in a standardized manner.
IBC's design emphasizes modularity, making it a general-purpose protocol. This means that even blockchains outside the Cosmos ecosystem can implement IBC, making them compatible with other IBC-enabled chains. This is especially important in the field of decentralized finance applications, which often require interaction between multiple chains.
The Cosmos network structure includes “hubs” and “zones”. Hubs, such as the Cosmos Hub, serve as central blockchains that can interact with multiple zones, which are other separate blockchains. IBC allows for seamless transfer of tokens and data between these zones and hubs. The key benefit is that it leverages the inherent security of individual blockchains. This allows information to be exchanged securely with the confidence that a breach of one chain will not compromise the security of others.
The fundamental component that makes IBC effective is the use of easy customer verification. When two chains wish to communicate, there is no need to check the state of the entire partner. Instead, they use light clients, which are simplified versions of a blockchain node, to authenticate cryptographic evidence tied to transactions on the opposite chain. The IBC protocol involves the transmission of packets between chains. While it standardizes the sending and receiving of these packets, it leaves the specifics of how they are processed up to individual chains, giving them a degree of autonomy and flexibility.