In this article I want to take a look at the future of cryptocurrency. It looks like the future will have several cryptocurrencies working together to host the global needs. By the looks of things there will be no one single cryptocurrency dominating the world. The only way that cryptocurrency will reach global adoption is interoperability. A future where each coin or blockchain does what it does best while interacting with the others. This brings us to today’s topic: Cosmos. This project tries to make the above-mentioned dream happen. We will take a look at the basic of Cosmos, the planned roadmap as well as possible concerns of this project.
Basics of Cosmos and Atom
The main technology of this project is the Inter-Blockchain Communication Protocol (IBC). The IBS basically makes it possible for just about every cryptocurrency blockchain to interact with each other via one or more hubs. By connecting to hubs it becomes possible to trade and transfer tokens between blockchains in a completely frictionless manner the same way you do on a centralized crypto exchange. You can compare this to the basic bridges between blockchains which make it possible to move tokens between more than two chains at a time and incur massive costs if Ethereum is involved.
Any crypto project that was build using the cosmos software developer kit (SDK) can be an IBC-hub. Furthermore, the Cosmos SDK makes it possible to create new cryptocurrencies from scratch. Cosmos-based blockchains all use the tendermint consensus mechanism which is one of the most secure proof-of-stake consensus mechanisms in crypto so far. Additionally, it is one of the most scalable ones. The trade off for these advantages is unfortunately centralization. These blockchains are inherently limited to about 130 validators. That is the reason why you should always choose one of the top 130 validators if you choose to delegate your ATOM-Tokens if you decide to stake them. Even so, some of the largest and most popular cryptocurrencies so far were built using the cosmos SDK including the Binance Chain or Terra.
The strategy of the developers is to make the some of the most advanced and decentralized applications ever seen so that the cosmos blockchain will be the go-to hub in the future. Some of the recent event were: the launching of “Gravity” a decentralized exchange. Like Uniswap, Gravity is an automated market maker. The difference is that Gravity allows you to trade any tokens belonging to the blockchains that are connected to the Cosmos-hub. Furthermore, the Gravity’s transaction batching technology makes front running impossible. If you want to try it out, the main platform leveraging Gravity right now is Emeris.
Roadmap
With this being said, we have to take a look at the planned roadmap. According to the roadmap Cosmos will soon be rolling out its interchain staking feature. This will make it possible for Cosmos validators to secure more than one blockchain. Furthermore, the Cosmos Team is looking to bring Bitcoin to Cosmos by the end of this year. Another feature, Cosmos is also looking to introduce is its chain name service. This will make it possible for Cosmos wallet addresses to display a human readable name instead of a random string of letters and numbers. Some of the most interesting features are planned to be released somewhere around 2022 with them being NFTs, Tokenization and Staking Derivatives.
Concerns
This all sounds incredible on paper but it looks like there might be some issues putting these plans into practice. Some issues could be tracked back due to tensions in the different developer teams. This is because each company working on Cosmos has a slightly different perspective on the project and what it should look like in the future but these kind of things are to be expected. Energy is created by friction as optimists would say. What is concerning though is that Cosmos’s core developers seem to be splintering off to start their own crypto projects.
Another hindering factor of the growth of Cosmos is the commitment of the developers to the core values of cryptocurrency. At the first glance that would be very honorable and good but focusing on things like privacy and pure decentralization is going to limit the amount of capital that can flow into a crypto project. On the other hand this could be considered a good thing since this makes Cosmos immune against the coming regulations. This could be the only way DeFi and other projects would survive in the future.
Conclusion
In my opinion a cryptocurrency interoperability is very important for the future of the crypto space. This makes Cosmos one of the most important projects for the future. Additionally, the progress that the developers are making seems to become greater every month. As centralized crypto exchanges gets regulated and have to de-list coins, Cosmos could be the place where the crypto holders could turn to. I am very curious how this project will develop and even more curious of what you guys think about this project!
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 28th October 2021
Sources:
https://docs.cosmos.network/master/ibc/overview.html
https://www.gravitybridge.net/post/the-gravity-bridge-blockchain