What You Need To Know About Cosmos (ATOM)
What is Cosmos (ATOM)?
Cosmos (ATOM) is a cryptocurrency that enables a network of blockchains so that they can communicate with each other in a decentralized way. It uses the Tendermint BFT consensus algorithm. As Cosmos is an open-source project, everyone can build additional tools to enrich its ecosystem.
To maintain the network, the users can stake their ATOM tokens and even receive more tokens as rewards. Earlier blockchains weren’t able to communicate with each other, which is now possible because of Cosmos.
How it works
The main purpose of Cosmos is to allow dedicated blockchains for decentralized applications like DEXs and NFT marketplaces. It aims to make these applications faster and cheaper and to enable communication between them in a decentralized way.
Each independent blockchain is called a zone and is interconnected with other zones by the Inter-Blockchain Communication (IBC) protocol. There are pre-built modules for developers to quickly create customizable blockchains, as per their specific use cases.
The IBC protocol, software development kit and Cosmos consensus engine function such that they ease the work and provide interoperability within blockchains, while still maintaining speed, transaction costs and security as provided by the leading blockchain platforms.
Through horizontal and vertical scalability solutions, Cosmos blockchain applications can scale to millions of users.
Understanding IBC
Through IBC, two blockchains can transfer tokens among each other. If each blockchain connects to every other blockchain through an IBC connection, the network can become bulky and difficult to manage.
So, Cosmos formed an architecture of two blockchain classes: Hubs and Zones. Zones are regular blockchains, while hubs are blockchains designed to connect these zones. A zone connected to a hub can easily send and receive data from all the other zones in that hub. So, each zone requires just a limited number of connections to certain hubs.
Final Thoughts
Cosmos is an ecosystem that enables the exchange of data between blockchains. It aims to create an internet of blockchain that solves interoperability as well as scalability issues among blockchains.
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