What is Cosmos Coin (ATOM) – Cosmos Token (ATOM) Review


The Cosmos platform went live in March of 2019 and has benefited from investments by venture capital funds run by Bain, Paradigm and several other investment companies. The Cosmos mainnet was designed to be a decentralized network of independent blockchains, which can communicate with each other using the Inter-Blockchain Communications layer that is a core part of the platform. The Tendermint BFT, which is the other core component of the Cosmos platform, is an open-source, blockchain development layer that handles the networking and consensus protocols of blockchain functionality, leaving developers free to focus on developing applications and rules for their independent blockchains. Developers who wish to build a blockchain on the Cosmos platform must ensure they employ a consensus model that is compatible with the byzantine fault tolerant (BFT) consensus algorithm used by the Tendermint BFT engine.

The guiding principle behind the development of the Cosmos platform, of which the ATOM coin is the staking coin, is to provide a network for blockchains that is both flexible and scalable. Furthermore, the creators wished to provide a platform that allows developers to introduce new features to upgrade and fix their blockchain applications without having to wait for central blockchain governance approval, as is the case with single blockchain environments such as Ethereum and Bitcoin. This approach is intended to facilitate faster development times and avoid unnecessary delays when urgent fixes may be required.

The Founders

Tendermint was created in 2014 by Jae Kwon and Ethan Buchanan, and many of the developers involved in the project went on to join All in Bits, the organization behind the Cosmos network. Jae Kwon and Ethan Buchanan went on to form the Interchain Foundation (ICF), which supports the Tendermint team’s continuing development work on the Cosmos network. The foundation also provides grants to independent teams that research and develop systems and applications designed to benefit the Cosmos ecosystem. Jae Kwon had previously contributed to a number of online software projects, including Yelp and Flywheel networks while Ethan Buchanan spent two years working as a research scientist prior to his involvement with the Cosmos project. With their combined backgrounds, it is not surprising that they decided to develop a very ambitious and innovative blockchain environment rather than just another cryptocurrency blockchain.

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The ATOM Coin

The ATOM coin is the staking coin that network validators can use to join consensus hubs on the Cosmos platform. Validators found to have contravened network rules may have their stakes reduced, by way of a fine, while nodes that are found to have behaved dishonestly are permanently removed from the network and their ATOM stake destroyed. In common with other cryptocurrencies, the total supply of ATOM coins has been capped, at 236 million, but in contrast to conventional cryptos such as Bitcoin, the coins are not mined: ATOM coins are earned through a proof of stake algorithm. Transaction costs on the Cosmos network are paid with Photon tokens, which can be earned through validation work by ATOM stakeholders.

How Cosmos Proposes to Solve Scalability and Flexibility Problems

The Cosmos network, as mentioned above, was designed to allow independent blockchains to operate on the same platform, and to enable them to communicate with each other through common protocols. It aims to make the development of new blockchains a much less daunting prospect and to allow these new chains to process transactions at much faster speeds than is currently the norm in the crypto industry.

  • Flexibility – By providing a decentralized environment with secure protocols, the Cosmos network allows independent blockchains to communicate with each other safely and efficiently, at the same time as maintaining control over their own resources, transactions and governance. The tools provided by Cosmos allow each blockchain development team to quickly build their own custom applications. The Cosmos SDK is a modular development framework that enables developers to create new blockchains quickly and easily, without getting bogged down in the coding details. All the basic building blocks are already in place, making life much easier for all concerned.
  • Scalability – The Tendermint BFT is capable of handling thousands of simultaneous transactions every second, which is in marked contrast to the painfully slow Ethereum and Bitcoin networks. The Cosmos network has been designed to combat the problems encountered by other cryptocurrency networks when attempting to process large volumes of transactions on a daily basis, with the aim of making cryptos more competitive with established digital payment platforms such as PayPal. The fact the platform uses proof-of-stake rather than proof-of-work is a major plus as far as transaction times are concerned and the embedded transaction types and functions also perform much better than those that live in a virtual machine environment such as the Ethereum Virtual Machine.

Each individual blockchain on the platform inhabits its own zone and can communicate with other chains and apps through the Cosmos network hubs. In addition to facilitating communication between different chains/apps, the hubs are there to validate transactions and act as a compatibility layer between diverse blockchains, thereby allowing cross-chain transactions to take place.

How to Store ATOM Coins

If you decide to acquire some ATOM coins, either as a long-term investment or with the view of trying to actively trade them on one of the major crypto exchanges, you are going to need a wallet to store them in. While there is a secure command line wallet available, written especially for the network, most crypto investors prefer to use wallets that offer a graphical user interface, such as the Lunie Wallet. This web and mobile wallet was originally developed in-house by the Cosmos team but has since become an independent project. Its user-friendly interface makes it a good choice for less tech-savvy crypto investors and traders, and the staking functionality it offers is a bonus for long-term holders of ATOM coins. It can also, as detailed below, be used in conjunction with a hardware wallet for added security.

Another mobile wallet you may like to consider is the Trust Wallet, which was developed especially for the Binance exchange environment. If you have an account with Binance, this could be a convenient option, at least for short-term storage of your ATOM coins. The Trust wallet also allows for staking of ATOM coins and gives investors the option of buying new coins directly from the wallet. It is, in common with the Lunie wallet, available as both an Android and iOS app. For long-term storage, a hardware wallet is preferable, owing to the higher level of security they have to offer over their mobile and web counterparts.

The Ledger Nano S is the hardware wallet of choice as far as many cryptocurrency holders are concerned and with good reason. With support for well over a thousand different cryptocurrencies and industry-leading security, it is a great option for those who wish to ensure their holdings are completely safe at all times. When you wish to load or withdraw coins, you simply connect the Ledger Nano S to your PC with a standard USB cable and use the Lunie Wallet software to manage your coins. This software needs to be loaded onto the Ledger as it does not come with it as standard but it is a relatively simple procedure so there is no need to worry that you won’t be able to manage it.

What Does The Future Hold for Cosmos and the ATOM Coin?

As the Cosmos network is primarily an ecosystem where independent blockchains can communicate and conduct transactions with each other, the future of the network and its staking coin depend very much on the level of participation from other cryptocurrency platforms in the future. The Cosmos team is also working on bridges to other cryptocurrency networks that will allow transactions to be completed between those blockchains and the blockchains hosted by Cosmos but as of the time of writing, the Inter blockchain communication (IBC) layer has yet to be officially deployed so how successful these efforts will be remains to be seen.

The IBC layer does work with blockchains that have been developed on the Cosmos/Tendermint ecosystem but the big test will be when it is deployed to provide a bridge between Cosmos and one of the major players in the cryptocurrency world, such as Ethereum or Bitcoin. This is one of the main goals of the Cosmos team but it is going to take a lot of work to reach that point. If and when they do, it will be a very interesting time for the crypto industry and everyone involved in it.

If you are interested in being involved in the latest developments in the cryptocurrency sector, ATOM coins may be an appealing investment opportunity for you but whether it will be a profitable one is not something that can be predicted at this moment in time. As with other cryptocurrency projects of a similar nature, the Cosmos network could be the next big thing in the digital coin sector or it could end up as a bit player in an ever-expanding marketplace.

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