Crypto might be a trillion-dollar industry with more headroom in the coming years, but there is one big problem.
Most of its ecosystem comprises disparate projects.
As an illustration, Bitcoin, the world’s most valuable network, has a market cap of over $540 billion. At one point in 2021, it was north of $1.2 trillion.
On the other hand, Ethereum is the second most valuable, with over 17 percent of the total crypto market cap. The network is the pioneer smart contracting network. Considering how crypto developers prefer “history” and gravitate to “battle-tested” platforms, Ethereum is the home of DeFi and NFTs.
This fragmentation and unavoidable tribalism in crypto and blockchain can portend trouble in the future. Worse, it is terrible for adoption.
For this reason, Cosmos plans to eventually release a solution to building a unified crypto and blockchain front, accelerating adoption and the onboarding of projects.
Cosmos’ core objective is to create what they describe as the “internet of blockchains” with a laser focus on interoperability and customizability.
There are three primary layers in Cosmos. The first is the application layer for transaction processing, the network layer for communication between transactions and blockchains, and the consensus layer, which keeps the chain in a harmonious, synchronized state.Cosmos are building on internet blockchains, but why should I care? Learn more about their interoperability and customizability here: Click To Tweet
To make this possible–and faster, the development team has released a series of open source tools, including the Tendermint and Cosmos SDK. These will streamline transactions between connected blockchains, improving efficiency and drastically lowering costs.
Each blockchain that’s part of Cosmos is called a “zone”. This independent ecosystem is tethered to the Cosmos Hub, a core that maintains its record of transactions through the Inter-Blockchain Communication protocol (IBC).
The Cosmos Hub is a proof-of-stake blockchain, meaning it is energy-efficient and is primed by ATOM, the chain’s main cryptocurrency used by the Tendermint Core for governance.
What to learn more about Cosmos and blockchain interoperability? Tune in to our podcast!
Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies.