On March 13, the Cosmos project was launched with its goal to interconnect all the incompatible blockchains and become an imaginary bridge connecting the cryptocurrencies.
What is Cosmos
Cosmos is a network of many independent (new and existing) blockchains that are called zones. The zones are driven and controlled by Tendermint Core, a Byzantine Fault algorithm (where blockchain decisions are threatened by nodes sabotaging consensus) and the virtually unlimited scalability of public PoS blockchains, such as Ethereum.
The first zone is called Cosmos Hub, it allows you to create any number of PoS tokens and has the basic mechanisms of reaching consensus. Its job is to act as a mediator between all the blockchains that will be connected to the network.
The Hub and all zones on Cosmos Network communicate with each other using the IBC protocol, which allows moving tokens between zones quickly and without the need for liquidity. In fact, all zone-to-zone transactions go through the Cosmos Hub, which keeps track of how much each zone holds tokens.
Cosmos in the Real World
Before going into a deeper analysis of Cosmos Network, let’s talk about what Cosmos can actually be used for.
A widely distributed (decentralized) exchange
We can define a decentralized exchange as a cryptocurrency environment that exists in many duplicate versions on thousands of computers around the world. The more computers maintain a copy of the system, the better the platform can resist attacks from outside.
Trades on decentralized exchanges are made possible by “atomic cross-chain” transactions, where users can exchange Ethereum for Litecoin, for example, even though the two cryptocurrencies operate on incompatible blockchains.
The transaction happens automatically by the system and acts as a mediator between traders. When using a decentralized exchange, traders no longer have to assess whether the counterparty is credible.
Tendermint, the new Cosmos-based algorithm, brings faster transaction confirmations, both on the exchange and across zones. Cryptocurrency transfers with Cosmos are made at lightning speed, whatever you do. And without the need for liquidity.
The main problem affecting the Ethereum is its scalability. Without the ability to process a huge amount of transactions without unnecessary delays, it may soon be in a state where the network will be overwhelmed and applications built on Ethereum will collapse again. Tendermint allows much faster block creation and ERC-20 token coordination, effectively scaling Ethereum’s usability.
Like Ethereum, Tendermint can speed up any other blockchain. And it doesn’t matter if PoW, PoS, or if he reaches consensus by any other way.
The Cosmos Network consists of three basic parts
Tendermint Core (TC) is an algorithm with Byzantine Fault Tolerance implemented and includes the Interblockchain Protocol (IBC), which provides communication between the Cosmos and other connected blockchains.
Application Blockchain Interface (ABCI) allows you to replicate decentralized application developers into multiple programming languages, allowing you to run a single application on most connected blockchains.
Cosmos SDK is a software layer created for developers. It allows them to launch new blockchains on the Cosmos Network and determine their PoS properties. More complex additions can be made by developers in the form of software plugins that can be used for any blockchain with ABCI.
The versatility of the SDK also allows you to import any existing blockchain into the Cosmos Network. For example, Ethermint is a live copy of Ethereum within Cosmos that copies Ethereum blocks but also benefits from the Tendermint core. Ethermint is compatible with all Ethereum add-ons such as Metamask and importing smart contracts into Ethermint is a matter of a few clicks.
Blockchains can communicate without losing information
Cosmos Network (also called Cosmos Hub) allows all connected blockchains to communicate with each other through an IBC protocol that does not require individual blockchains to use the same form of consensus.
The IBC mechanism is quite complex and a good explanation in English can be found here.
How to achieve the “Internet for blockchains”?
The interconnection of incompatible blockchains with the IBC protocol is a big thing in itself. But how to connect all blockchains to each other?
The basic problem is that linking blockchains directly to each other nonlinearly increases the number of individual connections that can arise so much that it will not be physically possible to manage them efficiently. If we wanted to connect only 100 blockchains to each other, we would have to create 4950 connections.
Therefore, there is a Hub and Zone in Cosmos Network. Zones are individual incompatible blockchains and Hub is a special kind of blockchain that connects the connected zones. Once a blockchain (such as Bitcoin) is connected to the Hub, it can automatically communicate with all other blockchains that are also linked to the same Hub.
This drastically reduces the number of connections needed. One blockchain has just a few connections to the Hubs and suddenly has access to thousands of other blockchains.
How the Tendermint algorithm works
Tendermint is the first Proof of Stake algorithm to implement the Practical Byzantine Fault Tolerant (BFT) method. It effectively solves the possible existence of nodes that might try to damage the blockchain. The algorithm determines who has the right to design the next block using a pseudo-random selection.
In the case of classic BFT algorithms, each node has the same voting right. But the Tendermint also works with the weight of individual votes, which is calculated in several ways, depending on the situation. For example, Cosmos Hub determines the strength of vote based on the number of tokens that a node holds locked as a form of collateral.
Reaching consensus on the new block
Tantermint’s Byzantine Fault Tolerant works this way. The algorithm assumes that up to one-third of the voting nodes can fail each time they vote on the block. And it doesn’t matter if intentionally or because of some error.
Therefore, for block validation, Cosmos requires at least two-thirds of the validation nodes to match the block validation. The following process is running for each new block:
The system determines the leading node that suggests a new block (the block is the sum of the transactions that will be written to the blockchain) and lets the other validator nodes vote to see if the offered block is correct. If the vote is not positive (less than 2/3 of the nodes are pronounced PRO), the process is repeated, but with the difference that the system determines another leading node.
Therefore, the network can only reach a consensus after a few rounds of voting, but it is always decided in about three seconds.
Validators and delegates are rewarded for their work in the form of ATOM tokens (ERC-20), and each node convicted of sabotaging blockchain operation is deleted from the network and its tokens are confiscated by the algorithm.
A detailed description of how to reach a consensus on Cosmos can be found here.
Unprecedented blockchain speed
Although the new blocks are elected in several rounds, the blockchain itself is very fast. In a speed test with 64 nodes deployed on five continents, the Tendermint algorithm handled thousands of transactions per second. Even when individual nodes were actively arguing about the form of blocks and deliberately sent blocks to the network with modified transactions.
Native ATOM token
ICO Cosmos occurred in April 2017 and was sold out in less than half an hour. Investors waited for two years to get the tokens because unlike other projects, the ICO ERC-20 proxy tokens were not issued. Therefore, until March 14, 2019, ATOM tokens could not be traded.
Although the team did not ask for listing on Binance, its CEO Changpeng Zhao still decided to add ATOM on his exchange. Reason? According to Binance, Cosmos is one of the most advanced blockchain technologies and simply deserves a place on the most popular cryptocurrency exchange.
The team behind Cosmos
The Cosmos Network team consists of about 30 employees of two companies. All those involved in the project are top software developers, researchers, and administrators of complex networks.
The Interchain Foundation (CIF) is a Swiss nonprofit organization that was created to support Cosmos and its development. Tendermint Inc (All in Bits Inc) is then a developer company that CIF has hired to develop Cosmos Network.
Jae Kwon is both President of Interchain Foundation and CEO of Tendermint. His vision is simple: get rid of the blockchain’s dependence on the high power consumption they use for sophisticated PoW algorithms.
Instead, it offers a solution that delivers speed and almost unlimited scalability.
Ethan Buchman, the co-founder of Tendermint, is a visionary that believes that through Cosmos he will provide people with a better way to reach a consensus in big communities.
Anton Kaliev has been working as a software engineer for six years and has worked on a variety of creative issues he has solved brilliantly. One of his greatest achievements is the Java C # source code compiler.
Although Cosmos Network is a unique idea, several other companies are already trying to solve the problem of blockchain incompatibility. Among the best known are Cardano, Wanchain, Komodo or Oneledger.
– Luke –