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Cosmos Network: The Internet of Blockchains

Written by Allan Cheng

The Cosmos Network ($ATOM), a groundbreaking project in the blockchain space aiming to create an interconnected network of blockchains, often referred to as the “Internet of Blockchains.” Launched by Tendermint Inc. and the Interchain Foundation, Cosmos addresses critical blockchain issues such as scalability, usability, and interoperability.

The Vision of Cosmos Network

Cosmos envisions an ecosystem where multiple blockchains can coexist, interact, and share data seamlessly. This is achieved through innovative technologies and protocols that enable different blockchains to communicate. At the heart of this ecosystem is the Cosmos Hub, the central blockchain facilitating interaction between independent blockchains, known as “zones.”

Key Components

  1. Cosmos Hub and Zones: The Cosmos Hub connects various other blockchains, called zones, allowing secure and efficient data exchange. Each zone operates independently, maintaining its own consensus mechanism and governance.
  2. Tendermint Core: The consensus engine powering the Cosmos Network, Tendermint Core is known for its high performance and security, handling numerous transactions per second. It ensures all nodes in the network agree on the blockchain state, providing a solid foundation for scalable applications.
  3. Inter-Blockchain Communication (IBC): IBC is the protocol enabling different blockchains to communicate, allowing tokens and data to be transferred across chains, fostering interoperability and new decentralized application use cases.

The Role of $ATOM

$ATOM is the native cryptocurrency of the Cosmos Network, playing a crucial role in its ecosystem:

  • Staking and Security: $ATOM holders can stake their tokens to participate in the network’s consensus process, securing the network and earning rewards.
  • Governance: $ATOM holders have a say in the governance of the Cosmos Network. Voting on proposals that affect its development and direction.
  • Transaction Fees: Within the network, $ATOM ensures efficient resource allocation and sustainability by paying transaction fees.

The Cosmos ecosystem has actively developed the IBC Protocol, connecting over 89 zones and enabling the transfer of assets. In the past 30 days, the transaction volume on IBC has reached over $2 billion with more than 4.8 million transactions. Featured projects on IBC with the largest transaction volume include:

Click on the image below for the top IBC Projects by Volume (30D)

top IBC Projects by Volume (30D)
Source: mapsofzones.com

Cosmos Market Update

In the Cosmos ecosystem, $ATOM as of July 9, 2024 is trading below $6, —a level not seen since the 2022 bear market following the Terra and FTX collapse. At this price level, some investors may see this as a chance to diversify their portfolios by investing in cryptocurrency. However, it’s essential to consult with your investment advisor before making any investment decisions.

The Future of Cosmos Network

With the regulatory developments in the United States, Cosmos may play a significant role in blockchain’s future. By enabling blockchain interoperability, it opens up possibilities for decentralized finance (DeFi), cross-chain applications, and more. The Cosmos SDK, a modular framework for building custom blockchains, enhances its appeal by making development more accessible and efficient.

As blockchain technology evolves, Cosmos ($ATOM) is a key player, driving innovation and fostering a connected, scalable blockchain ecosystem.

Disclosures: Not investment advice. The Author, Sarson Funds, Inc. and its affiliated managers may hold positions in the projects mentioned. Talk with your financial advisor before making any investment decisions or have them contact Sarson Funds directly at info@sarsonfunds.com

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