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Cosmos combines all kinds of blockchains by using the power of Tendermint and the Inter-Blockchain Communication Protocol (IBC).

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What is Cosmos ATOM?

In order to understand what Cosmos Network does, it will be necessary to unravel the components and the problems they solve. In short, Cosmos Network is the Internet of blockchains.

Cosmos combines all kinds of blockchains by using the power of Tendermint and the Inter-Blockchain Communication Protocol (IBC). Projects linked or integrated into Cosmos Network can exchange tokens with each other.

This project is designed around the concept of standardizing communication between several blockchains that are part of its broader ecosystem intending to facilitate interoperability. It is certainly ambitious. Tendermint is a unique multi-string framework for other Blockchains using Proof-of-stake (PoS) consensus.

Background of the project

The Swiss-based Interchain Foundation supports Сosmos' development. Various developers working on Cosmos are from the organization behind the Tendermint. In particular, Jae Kwon, who initially proposed Tendermint in 2014, is one of the leading developers and the Interchain Foundation.

Cosmos raised approximately $16.8 million in its ICO which ended in April 2017. Since that time, the project has undergone a systematic development process.

How does Cosmos Network work?


Tendermint is a low-level protocol that consists of two main parts: a blockchain consensus engine and a generic application interface. To understand a little of what that means, know that there are three conceptual layers in a blockchain: networks, consensus, and the application layer.
Tendermint prepares the networking and consensus packages so that teams can focus on their applications and avoid hundreds of hours of complex code.

Tendermint is not a blockchain itself, but an open-source engine created for the developers. It is a customizable infrastructure for blockchain apps.

The Core of Tendermint lies in the consensus of Cosmos Hub and subsequently, the more comprehensive network to manage a standardized exchange of tokens between zones. It is important to note that the blockchains connected to Cosmos retain their consensus sovereignty, and do not cede it to the more considerable Cosmos PoS consensus.

ABCI is language independent and allows developers to create their blockchain in any language, and it will run on Tendermint's consensus engine. ABCI is a vital boundary between the Tendermint consensus engine and Cosmos SDK for building applications. The SDK is a layered framework built on top of the existing low-level ABCI to allow developers to create advanced applications without having to navigate the logical complexities of the low-level environment.

An exceptional note is that Tendermint's consensus is proof of stake (PoS) algorithm. This can be reconfigured into other forms of PoS, such as a Delegated PoS or a Proof of Authority consensus.

Cosmos SDK

It is a set of technological tools designed to simplify the process of creating secure blockchain applications on top of Tendermint. By doing so, the developers claim that building a blockchain should be clarified in that the whole process should not be more complicated than coding several modules.

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The following part in Cosmos network is the inter-block-band communication (IBC) protocol. This software links the zones and hubs within the system and allows the exchange of tokens between independent chains.
It is important to note that Cosmos refers to individual applications as heterogeneous strings. This is because each chain or app within the network has its layer architecture and sovereignty.

The Network: Hubs and Zones

After we figured out the essential technical aspects, now we can return to the most important: how will Cosmos manage to make a kind of revolution in the world of blockchain?
To meet the challenges and work towards its goal of "internet of blockchains", Cosmos' network structure had to be formed into two central components.

What is ATOM staking?

Staking is a process where users transfer their crypto funds to a blockchain, receiving a reward in the form of new coins in return. staking services are offered by a block-keeper network that runs on a Proof-of-Stake (PoS) algorithm. staking can be considered as an alternative to mining because crypto coins are stored by using a web-connected wallet. The principle of receiving profit is similar to receiving dividends when buying shares or making a deposit. At the same time, it is much easier to make a profit in this way, because there is no need to buy unique, expensive equipment, as in the case of traditional mining. For staking ATOM is enough to have a computer, connection to the Internet, and of course, you need to buy crypto coins, which will then be stored on your wallet. So, PoS Mining involves the accumulation and storage of an ATOM coin in a crypto wallet. Participating in the staking, the user acquires crypto(through a trading platform or service for exchange), then blocks the funds for the extraction of new coins - while the funds are in storage, the participant receives a certain percentage, the value depends on the amount of funds. At the same time, the participant of this type of mining may at any time terminate this activity and spend the funds. In case of transactions with crypto funds, the possibility of receiving rewards through staking is excluded, this feature is similar to the conditions assumed by the bank deposit.

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How do ABCI and Cosmos SDK work together?

Once created, it is assumed that the applications will be linked to the Tendermint Core through the ABCI protocol, which also supports communications between the resident application and the Core itself. ABCI provides three types of connections to the Tendermint Core:

  • The Mempool link checks whether transactions should be retransmitted before they are confirmed.
  • The Consensus connection helps with the management of the transactions that have been compromised.
  • The Query connection helps the platform to consult the status of the application.

Running within the ABCI framework, Cosmos Software Development Kit is supposed to make life easier for developers focused on creating application-specific blockchains. This is done by facilitating the construction of ABCI for blockchains with the help of a unified framework. The SDK has a modular structure that is divided into existing layers at the top of ABCI and is packed with tools intended for use by developers.

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