Cosmos Atom: The Next Top 10 Crypto?
Do the research to guide you to who the leaders may be, and i believe that blockchain technology is still in its infancy, but with more businesses experimenting with creating their own dapps or entire chains? It helps investors like you and i to speculate about how the average person will experience blockchains in the near future. A perfect example here is the metaverse. Basically, this is just an idea at this point where digital assets like tokens and nfts and creative content all coexist and impact one another in a shared decentralized, global environment. But one of the berries to cross before we can get to the point of a functioning metaverse is how to account for all the activity within the metaverse. You know the objects, identities and ownership within the system. Blockchains, for the most part, are walled gardens as of right now, their own ecosystems just do a poor job of communicating with others. For example, you cant buy an ethereum nft with bitcoin all blockchains have their own laws features and security protocols, and this means it isnt. Exactly easy for systems to communicate with one another, so today i want to look at a network that aims to bridge these established blockchains to one another, a solution to the problem of interoperability, and that is the cosmos network. This network was self described by its founding developers as the internet of blockchains cosmos and its native token atom today rank at number 23.. So its one of the larger and more well adopted altcoins in the last two years now today, im going to do a deep dive to help you decide if cosmos could be your next big bet, so to kick things off with a quick look at cosmoss founders And the history of the project, the technology that powers cosmos, was created by jay kwon in 2014.
he was the first person to apply byzantine fault, tolerance or bft research to blockchains. This prompted him to found tendermint incorporated. The use of bft was new and aimed to solve problems that quan had noticed in bitcoin an ethereum work models specifically speed, scalability and concerns about the environment. How dare you issues were now familiar with, but in 2014 these were problems that were just starting to get noticed now: byzantine fault. Tolerance is very important to cosmos and ill get back to that in a minute, but in 2015 ethan bachmann joined quans project and they went on to develop tendermint bft a proof of stake algorithm, specifically for use in blockchains. The two had met at the crypto economics conference and both have academic credentials in computer sciences, machine learning and bft then fast forward. A couple years and the newly created interchange foundation icf raised 17 million dollars through an ico in 2017, all in just under 30 minutes. Then jaquan made headlines in january of 2020 when he announced on twitter that hed be stepping down from his role as ceo of tendermint, and this caused a lot of fear to spread about whether cosmos was some kind of pump and dump scheme speculation spread that there Was an internal conflict at tendermint, which i dont think was ever clarified? I couldnt find any information on it. Anyways kwon at the time stated that he would start work on a new project called virgo which had even greater ambitions than cosmos and tendermint.
But of course, thats a story for another time since then, cosmos has carried on with new leaders with ethan bachmann remaining at the head of the interchain foundation and if their recent, all time high is any indication, cosmos has more than a fighting chance at expanding its Position in the crypto space – and this is why you want to make sure you understand this coin, and that brings me to the value that cosmos has brought so far to the crypto industry. To cover that we need to define byzantine fault. Tolerance bft is one of the characteristics of a system where many agents are responsible for achieving consensus, in this case a blockchain with many validator nodes. Each of these need to arrive at a consensus for how and when new blocks are formed, whether to approve or reject transactions on the network and how the blockchain changes and a whole lot more. Basically, bft in a blockchain allows for the entire system to arrive at consensus, even if up to one third of the validators deviate from the rules set by the blockchain. This is key to understanding cosmos. Not only did it pioneer using bft in proof of stake systems, but the tendermint bft has been instrumental in creating what cosmos calls the internet of blockchains, the cosmos ecosystem isnt. Just a single blockchain on which adapts can be made, but it uses a hub and zone model to allow a virtually unlimited number of blockchains to communicate and transfer value from one to the other.
Cosmos hub was the first blockchain launched on the network. This was built to act as an intermediary between any and all independent blockchains that were created within the cosmos network. These independent blockchains can all have their own rules, and this is ideal for projects that need to transfer value to other blockchains, and this works even if blockchains use different consensus mechanisms or a completely different set of validators. Now, speaking of validators, they work a little bit differently compared to other proof of stake, blockchains, where their main responsibility is to approve transactions on a ledger and create new blocks, because cosmos hub acts as an intermediary between other blockchains validators need to come to a consensus. Every time blocks in connected zones are created, so this creates a global ledger of transaction activity across projects that could have wildly different ways of working. The result is an interoperable blockchain economy that is scalable and capable of processing thousands of transactions per second, the cosmos hub is powered by tokens called atoms. Validators of the hub need to stake atom and by doing so, theyre. Given the ability to vote on network upgrades and maintain transaction histories of all connected blockchains. And this means that the more blockchains that are created and connected to the cosmos hub, the more value that atom could potentially have – and this is where atom could get exponentially more valuable if cosmos becomes the glue that sticks all block chains together. Massive amounts of value will be flowing through the ecosystem, but in an early interview, jay kuan did point out that atoms are inflationary by nature, and this is very important to understand.
If you just hold atom tokens, it may not be the best for you, because its its designed to be inflationary. If you dont stake it and use it, youll lose out to inflation. Theres no supply cap on the token new atom is minted as a reward for validators, maintaining the cosmos hub ledger. So, even though weve seen recent, all time highs for the price of atom up over 3 000 percent in the last two years. The long term strategy id recommend here echoes the sentiments of the founders atom is best used in staking and participating in the development of the cosmos ecosystem. This is, if youd like to get that juicy passive income anyways. You also can get some passive income by making an account with blockfi, which is linked in the description below by earning interest in your crypto. Using that link will give you up to 250 in bitcoin by the way. Now cosmos could get more valuable over time as new blockchains are added and adopted by users, but because of its inflationary nature, its not ideal to just hold as a passive investment. On top of this, for apps on the cosmos network, users pay fees in the currency native to the zone. This is unlike how eth is used as the standard currency for all transaction fees in ethereum. So again, if you own atom, youre better off staking the token to make up for that inflation in the long run.
Now all that being said, cosmoss interoperability has already pulled in support from several dapps and blockchains. This includes notable names like the binance, smartchain and crypto.com, and there are over 250 apps running on the network. Now one area of potential growth for cosmos is in blockchain gaming, just this october tendermint and the icf announced their partnership with forte. This is a game development organization, with over 8 million active users. Ultimately, the goal is to allow developers in blockchain gaming to have their players integrate their nfts in the overall cosmos network and already some notable names in the video game space have signed on. Like will wright of the sims and high res studios, who created the online battle arena paladins, and this is excellent news. For the adam token, ceo of forte, josh williams, notes that the token will be integrated in their network to facilitate payments. This just highlights how valuable the atom token could be, especially considering their gaming user base on another front. Samoler a network and co processor for ethereum announced an r d partnership with meisten labs, and this partnership could make cosmos the fastest blockchain in the world. Samoler is an app that liquidity providers like yield farmers can use to move their assets into different liquidity pools using this automated process to help maximize their yield. I know things get pretty complicated there and their relationship with mystinlabs is said to enable 100 000 transactions per. Second, and as this all sounds incredible, but there isnt yet any tangible result that i can point to so until it happens, it hasnt happened quite yet now under the risks from what i can tell, the biggest prospects for cosmos are in defy and gaming and, of Course, connecting blockchains as a whole, so a large portion of the dapps that are being built on blockchain have to do with d5 and using the interoperability between blockchains, but because of pressure from regulators on the d5 space.
Many of these dapps could possibly fall to the wayside, and this, of course, would affect how useful the atom token is. Now. Nothing has happened just yet due to this pressure, but its still something worth considering in your crypto endeavors, but of course this would hurt crypto as a whole. If it were to happen so the thing about cosmos and atom is it essentially provides secure and fast interoperability to blockchains, built on and connected to its network? There are hundreds of dapps built onto the network and considering that its launch was just under two years ago, it seems that this ecosystem will just get larger. And if you havent yet head over to my video on the metaverse and youll, see why. I think that theres such a huge potential here for cosmos in the next decade to play a massive role either way.