Do you understand what Cosmos is? ATOM is available for purchase on FTX for US customers.
Perhaps the biggest problem facing cryptocurrency as a whole is scalability. Several leading blockchains, such as Bitcoin and Ethereum, are struggling to handle demand that far exceeds what the founders thought they would face. As a result, the price of transactions on these blockchains, also known as gas fees, has skyrocketed. Many are hoping for a future that involves crypto, but that can be difficult if gas prices maintain high levels. This is where Cosmos comes in. Its developers hope to create an “internet of blockchains” with lower costs and more user-friendliness than predecessors.
Overview of Cosmos (ATOM)
Cosmos uses a Proof of Stake (PoS) consensus system to verify on-chain transactions. This protocol allows the chain to transact with higher volume and speed than its competitors. This system involves holders of the ATOM token staking their tokens on-chain in exchange for the right to validate transactions and earn rewards. As of May 2022, the reward for staking ATOM is just under 10% APY. These rewards are generated from transaction fees and the creation of new ATOM tokens. For added security, if a validator does not do their job properly, then the chain has the right to take ATOM tokens from the holder.
ATOM tokens can also be used as a form of governance. Each token represents one vote. Votes can be cast on future proposals and projects, giving the community more power in terms of the future direction of the project.
Additionally, Cosmos is focused on creating a powerful and simple experience for blockchain developers. Most of the time, blockchain developers will have to learn new coding languages or go through several stages to see their programs run on a blockchain. Cosmos offers tutorials and a variety of useful tools for its developers. Essentially, the project writes most of the code for developers, but still leaves plenty of room for creativity and exploration in development.
Another issue with blockchains is interoperability, or the ability of blockchains to communicate with each other. For example, the Ethereum chain cannot communicate with the Bitcoin chain at all; you cannot exchange Bitcoin directly for Ethereum-based assets. Cosmos is also looking to solve this problem. Interoperability is one of the main objectives of the project, so it is integrated into the chain. Each new channel created on the network is automatically able to communicate with all others on the network. Cosmos is looking to create a large network of blockchains centered around their hub, which is the blockchain that sort of serves as the base for all the other chains in the network.
Why do people use Cosmos (ATOM)?
You can discover several reasons why you will want to use Cosmos. Perhaps most important is accessing the projects that are built on the chain. Some of the most prominent tokens in the Cosmos chain are Cronos (CRO) and Binance Coin (BNB). Both tokens have major support and have drawn a lot of attention on Cosmos.
Another reason to use the Cosmos chain is to develop your own decentralized applications (dApps), which are programs that rely on the blockchain to operate. The programs can be anything from a decentralized exchange (DEX) to an artificial intelligence program such as Fetch.ai. Cosmos supports almost any idea you can come up with.
Many use Cosmos as a way to earn passive income through the staking and rewards protocol. The project offers a high return. However, you must hold the ATOM token to earn the rewards, which could drop in price and eat away at profits.
History of Cosmos (ATOM)
Cosmos was created by a company called Tendermint in 2014. Two years later, in 2016, the Cosmos network was launched, along with the initial coin offering (ICO) ATOM in 2017. The ICO helped the company to raise more than $17 million.
Tendermint was founded by Jae Kwon, Zarko Milosevic and Ethan Buchman. Kown stepped down as CEO in 2020 but is still part of the project.
Since the release of the initial version of Cosmos, several updates have been released. Most notable is the integration of the inter-blockchain communication protocol (IBC). This protocol is a key part of the Cosmos blockchain that allows staking, trading and voting on network blockchains.
Where to buy Cosmos (ATOM)
Cosmos and ATOM have been around for several years, so the token is readily available on several major crypto trading platforms. Among the best places to buy the ATOM token are Coinbase Global Inc. (NASDAQ: COIN), FTX and eToro. These top crypto exchanges are well known for their low fees, security, and ease of use.
Cosmos Blockchain vs other Blockchains
Multiple major differences exist between the Cosmos blockchain and those of larger projects such as Bitcoin and Ethereum. The most important difference in the consensus model used to verify transactions. Bitcoin and Ethereum use a proof-of-work (PoW) system. This system requires computing power to validate transactions. Computing power is expensive and not readily available to most, so these cryptocurrency projects have struggled with scalability. The Cosmos PoS system can be aided by all token holders and can be scaled much more easily.
Also, the ability to create dApps is different. Ethereum has a tedious process for its dApp deployment while Cosmos tries to make it a simple and straightforward process.
How to Store Cosmos (ATOM) Safely
Although you can easily store your ATOM tokens on a trading platform, it may not be the safest option. These exchanges can be hacked and you run the risk of losing your funds in such an event. Wallets give token holders complete discretion over funds. Specifically, hardware wallets offer the most secure crypto experience.
Hardware wallets store the keys needed to send crypto to a physical device. If the physical device is not present to grant the keys, the crypto cannot be sent from the wallet.
Ledger is a hardware wallet brand that supports ATOM sending, receiving and staking. It currently offers Nano S and Nano X models. The Nano S offers basic security, while the Nano X focuses on ease of use with features like a larger screen and Bluetooth connectivity.
So, is Cosmos (ATOM) worth buying?
Cosmos is a unique project that hopes to solve some of the biggest problems in the crypto space. However, the Ethereum merger could solve many of these problems and reduce the need for Cosmos.
Conversely, the merger could continue to be delayed or Cosmos could expand rapidly before the merger occurs. For Cosmos to grow rapidly, it would need to attract a variety of new and gaining momentum.
Overall, the success of Cosmos and ATOM largely depends on the Ethereum merger, as well as Cosmos’ ability to attract new projects and increase its use cases.