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What is Cosmos (ATOM) and how does it work?
Cosmos (ATOM) is a project that aims to solve some of the most common and hard problems in the blockchain industry, such as slow, expensive, unscalable and environmentally harmful proof-of-work protocols, like Bitcoin, by offering a solution to the ecosystem of connected blockchains. The project’s goal is to make blockchain technology less complex for developers by applying a modular framework that demystifies decentralized apps. Additionally, an Interblockchain Communication protocol makes it easier for blockchain networks to communicate with each other, therefore, preventing fragmentation in the industry.
Cosmos was originally created in 2014 but wasn’t until 2016 that a whitepaper was published, and a token sale was held the following year. Users can earn ATOM tokens through a hybrid proof-of-stake algorithm that helps keep the Cosmos Hub, the project’s flagship blockchain, secure, and play a role in the network’s governance. One of the main goals of the developers was to reduce the fragmentation seen in blockchain networks by enabling blockchains to communicate with each other. Therefore, Cosmos software development kit focuses on modularity. This enables the network to be easily built using already existing code, with the aim to make, in the long term, complex applications straightforward to construct as a result.
Another main focus for Cosmos is scalability, meaning that more transactions can be substantially processed quicker and more efficiently than in older type blockchains like Ethereum and bitcoin, which are also expensive and congested.
In February 2022, a non-profit organization of the Cosmos ecosystem, the Interchain Foundation, announced the release of the Interchain Accounts network upgrade. The original protocol, the Inter-Blockchain Communications (IBC), launched in April 2021, is the Cosmos standard for blockchain interoperability and allows blockchains to control an account on a separate chain. Many DeFi projects already use IBC, such as Terra, Crypto.org chain and Gravity bridge. With Interchain Accounts, users can stake, vote, swap tokens and more on other blockchains adding a variety of additional benefits that the blockchain…