Hey all! This is cryptoshibe from the Fat Pig Signals team and today we will be talking about Cosmos. This review is not sponsored, and you should be aware that investing in cryptocurrencies are of high risk and this review is not financial advice. Cosmos is an ecosystem of blockchains that can scale and interoperate with each other, and we believe Cosmos, just like Ethereum, is cascading the next evolution of cryptocurrencies. Here's why.
Simplified Architecture: Bitcoin
The software stack that is utilized in basic blockchain contains three major layers: the Networking layer, often called the peer-to-peer layer, a Consensus layer, such as proof-of-work, proof-of-stake, or a private PBFT instance, and an Application layer, the state machine that runs on top of the blockchain, which in the case of Bitcoin is the Bitcoin application itself, or in the case of Ethereum it is the Ethereum Virtual Machine. In this simplified architecture, all of these layers were bundled in one software stack, and the creation of a custom application was difficult as you would need to fork the bitcoin codebase and write complicated code which was very hard to modify and implement into your own applications.
Application-Focused Architecture: Ethereum
In 2014, with the creation of Ethereum, allowed developers to write their own application with ease. Many of the developers focused on their application and are not very concerned with the consensus and networking layers. Your application would be a building block on top of the state machine that is the EVM, while it interacts with the Consensus and Networking layers. Though with this infrastructure, developers creating applications are giving up some of their fine-grained control in the design of their applications as you are constrained to the standards of the EVM.
Tendermint Core: A Scalable and Safe Consensus Layer
Tendermint Core allows developers to create their own application, no matter of its deterministic state machine. This state machine can be run on top of Tendermint Core, which can handle the consensus and networking layers for the developer. Tendermint consensus is a scalable BFT consensus algorithm that focuses on consistency over availability, which improves speed and irreversibility, easily utilized by both Public and Private Chains, where in public chains proof-of-stake would be used and in private chains it will utilized permission nodes. Bitcoin block times are so high is due to the fact that the bitcoin network is not safe in asynchrony, so if latencies are too high, the system will be difficult to resolve itself. With Tendermint, if an event where synchronization is interfered, or let’s say half of the world loses connection with the other half, the system would still remain safe and would stall rather than causing two forks.
ABCI: Anything Can Run On Tendermint
The connection between the application layer and Tendermint Core is made through interacting with your application through an interface known as the ABCI. ABCI allows any virtual machine to run on top of Tendermint Core. This means that you can take state machines of Zcash or Ethereum on top of Tendermint Core via the ABCI. These new chains are known as ‘zones’. Ethermint is a zone that took Ethereum’s Geth codebase, stripped its proof-of-work consensus algorithm, and ran it on top of Tendermint Core. This allows anyone who is used to building on Solidity and dapps on the EVM to easily migrate their project over to Ethermint.
Cosmos SDK: More Control for Applications
Though even with this there is still a lack of fine-grain control over the construction of an application, and constructing an entire state machine from scratch is extraneously difficult, and this is where Cosmos SDK fits in. Cosmos SDK, instead of building your applications as building blocks on top of an existing application, gives you a template with a basic blockchain framework and allows you to add functionalities through plugins. This allows you to make alterations with the state machine of the zone.
Cosmos: The Ecosystem of Blockchains
With all these zones, Cosmos is able to create an ecosystem through a protocol know as the IBC. It allows any chains that use Tendermint to share tokens, data, or even contracts amongst one another. This is done through a hub known as the Cosmos Hub, which is a chain built with Cosmos SDK to act as a routing mechanism for the communication between zones and a method to prevent double-spending among the different chains.
IBC: Bridging the Old and the New
IBC can also be adapted by fast-irreversibility consensus algorithms such as the upcoming Casper FFG on Ethereum to connect with Cosmos, but with blockchains that don’t reach finality as quickly, such as proof-of-work blockchains like Bitcoin and Ethereum at the moment, Cosmos utilizes ‘peg zones’ to connect with them indirectly. A peg zone is an account-based blockchain which bridges zones within Cosmos to external chains like Bitcoin or Ethereum. Through an Ethereum peg zone, you would be able to move both Ether or ERC20 tokens between the Ethereum blockchain and all IBC-connected zones within the Cosmos Network.
Zones: Big Players Are Already On It
We are already seeing many projects beginning to enter the Cosmos ecosystem through building zones. Binance Chain, for one, is an implementation of Tendermint and Cosmos SDK, which means that Binance Chain is connected to Cosmos via IBC. Other projects that have created/are creating zones on Cosmos include OmiseGo, Foam, Hyperledger Burrow, Loom Network, Theta Token, Lino Network, Crypto.com Chain, and many, many more.
Conclusion: The Next Ethereum-Like Hype Cycle
What we are seeing now is a new way value can be created. With Bitcoin, it was the ability to create transactions. With Ethereum, it was the ability to create applications. With Cosmos, it is the ability to create new blockchains, and fundamentally, we are seeing huge potential of where this coin is headed towards. We believe Cosmos is the Android of blockchain, creating an ecosystem of customizable and open-source blockchains. With this, we predict the next hype cycle of crypto will revolve around Cosmos; we are envisioning that ICOs would not be just issuing tokens, they would be creating zones as a method to directly integrate on a sovereign mainnet. We have extraordinarily high hopes for where Cosmos is headed towards, and for this, we give Cosmos a 91, making Cosmos #2 on the Fat Pig Signals Ranking System, surpassing Cardano and Ethereum and only second to Bitcoin. And on that note, thank you for tuning in.
Sources
Cosmos: Many Chains, One Ecosystem
by Sunny Aggarwal
What is Cosmos?
by Cosmoshttps://cosmos.network/intro
The Technicals of Interoperability—Introducing the Ethereum Peg Zone
by Chjango Unchainedhttps://blog.cosmos.network/the-internet-of-blockchains-how-cosmos-does-interoperability-starting-with-the-ethereum-peg-zone-8744d4d2bc3f
List of projects in Cosmos & Tendermint Ecosystem
by Asmodathttps://forum.cosmos.network/t/list-of-projects-in-cosmos-tendermint-ecosystem/243