Buy Cosmos (ATOM)
What is Cosmos?
The Cosmos team aims to structure the “Internet of blockchains” and create a network of crypto platforms. In a new article, we will tell you how the Cosmos Hub network works, why the ATOM cryptocurrency is needed and what users think of the project.
- Cosmos is committed to building its own crypto network ecosystem. Each blockchain linked to the Cosmos Hub is controlled by validators using applications;
- ATOM cryptocurrency can be used by validators for staking. ATOM is also needed to vote on changes to the Cosmos network;
- Compared to other projects, Cosmos offers innovative blockchain interoperability solutions.
What is the Cosmos blockchain project?
The Cosmos project was created in order to create a chain of crypto networks. They are combined with open source tools to optimize transactions.
It is this focus on customization and compatibility that sets Cosmos apart from other projects.
Each new blockchain created in Cosmos (called a “zone”) is then tied to the main chain, the Cosmos Hub. It keeps records of the state of each blockchain.
The Cosmos Hub, a Proof-of-Stake (PoS) blockchain, runs on its own ATOM cryptocurrency.
How does Cosmos work?
The Cosmos network consists of three tiers:
- Application - processes transactions and updates the state of the network;
- Network - provides communication between transactions in different blockchains;
- Consensus - helps the nodes to agree on the current state of the system.
To tie all levels together and allow developers to build apps, Cosmos relies on a set of tools:
- Companion software Tendermint. The most important layered design element is the Tendermint BFT software. It is a part of the network that allows developers to create blockchains without having to program them from scratch.
- Tendermint BFT consensus algorithm. It is used by a network of computers to secure the network, validate transactions, and commit blocks. It connects to applications through a protocol called the Application Blockchain Interface.
- Central to Tendermint is Tendermint Core, a Proof-of-Stake management engine. It supports synchronization of a distributed network of computers running Cosmos Hub.
- Communication protocol between blockchains. Blockchains connect to the Cosmos Hub via the inter-block communication (IBC) protocol. This mechanism allows information to move freely and securely between each connected network.
Creation history and team
The Interchain Foundation (ICF) team helped develop and launch Cosmos. It is a Swiss non-profit organization that funds open source blockchain projects.
Developers Jae Kwon and Ethan Buchman co-founded the Cosmos network in 2014, creating the Tendermint consensus algorithm. In 2016, Cosmos won the Shanghai Blockchain Week in the Most Innovative Project category.
Kwon and Buckman later wrote the Cosmos white-paper and released its software in 2019.
The Interchain Foundation conducted a two-week ATOM Initial Coin Offering (ICO) in 2017, raising over $ 17 million to date. Tendermint Inc. raised $ 9 million to continue developing the project through its 2019 Series A funding round.
The ATOM cryptocurrency plays a key role in maintaining interoperability between all blockchains in the Cosmos network. ATOM may become more valuable as more blockchains are built on the network that rely on the Cosmos Hub.
Cosmos rewards validators with an ATOM based on how many tokens they stake. Delegates receive a small percentage of the remuneration.
At present, the issue of ATOM is not limited. Cosmos adjusts the number of tokens generated based on the number of ATOMs placed.
The distribution of ATOM was as follows:
- 5% went to developers;
- 10% went to the Interchain Foundation;
- 10% went to Tendermint Inc .;
- the remaining 75% were distributed to users.
Comparison with similar projects
The main difference between Cosmos and conventional blockchains is that the platform offers a cross-chain solution. The Cosmos Hub connects blockchains into a common ecosystem.
Simply put: there is block A and block B in Cosmos Hub. We need to transfer cryptocurrency from one blockchain to another.
To do this, the tokens are simply blocked in the A blockchain, and information about them about them is transferred to the B blockchain. After that, the tokens in the B network become available.
Cosmos structure is similar to Polkadot, but they have some differences. The downside to the Polkadot security model is that validators in the Relay Chain have the final say on state changes in any parachain.
For example, validators may constantly reject blocks of a particular parachain for some reason. Polkadot tries to prevent this by shuffling the validators to check for random parachains.
In the Cosmos network, instead of using a local / global security model, each blockchain is independent and protects itself. Each blockchain has its own consensus, and the validators of each chain are only responsible for its security.
Partnerships and future plans
The Cosmos project has its own roadmap outlined in the white paper. Stargate is a collection of updates that complete the original roadmap.
Main features of the update:
- State Sync. Blockchains built on Tendermint will sync with nodes faster. The process has been shortened from 2 days to 30 minutes or less;
- Moving from Amino to Protobuf (Binary Wire Coding Protocols). Protobuf provides performance and development acceleration for blockchains based on the Cosmos SDK. It is planned to increase efficiency by 10-100 times and broader language support;
- Automatic updates. The new module simplifies the process of updating chains created with the Cosmos SDK. Moving from one version to another won't take long, compared to an hour or more.
How to buy Cosmos?
It is very easy to buy Cosmos, the crypto market has grown many times over, the industry is attracting more and more new users. However, you need to be ready for it, because digital assets are different from the sphere of traditional finance. Therefore, it is important for novice investors to understand what services, platforms and methods for buying / selling cryptocurrency exist. In this case, you can reduce the risks.
One of the easiest ways to buy Atom is through P2P exchanges. There are advertisements for the purchase or sale of cryptocurrency. You can choose an option with a suitable rate for yourself and conduct an exchange. It is a fast way to exchange digital money for fiat money and vice versa.
It should be remembered that in this case, there is a possibility of the bank transfer being canceled, so there is a risk of losing your coins. Therefore, it is better to use services with escrow accounts (they hold funds until the transaction is completed). To withdraw funds, you will need to go through the verification process, so you can not count on anonymity. The platform will require passport details and other personal information.
Another option is centralized exchanges. There are also KYC and AML procedures. However, the deal is likely to go through instantly if there are no liquidity problems on the floor. It is better to choose large and proven platforms. You should not use the exchange to store your own funds. It is better to immediately withdraw them to third-party services, ideally, when it comes to cryptocurrency, to hardware wallets (they are considered the safest in this area). In addition to hacker hacks that threaten large trading platforms, problems may arise within the company, after which customers can lose access to their account.
There are various services that offer to buy or sell cryptocurrency directly in the mobile application. Each service has its own commissions for operations, they must be taken into account when buying and selling digital assets. However, it is better to choose the most reliable and proven option and overpay a little than to try to save money and lose everything.
Many cryptocurrency wallets allow you to buy and withdraw funds. However, the commissions for such operations will be impressive, so if you want to hold Cosmos in your wallet for a while and then sell it in the same way, earnings can be literally eaten up by the site fees. In addition, many large wallets are asked to go through the verification procedure.
The simplest and most understandable, but at the same time the most dangerous way is to exchange funds in person in a private exchanger. But there is always the possibility of being deceived by unscrupulous buyers / sellers. Often, in such services, the price of digital assets for purchase is greatly underestimated, and for sale is significantly overestimated. Unlike P2P sites, here you will not be able to choose the asset price that is closest to the average market price.
How to invest in Cosmos profitably?
Trading is far from the only way to make money on the movements of the cryptocurrency rate. There are alternative instruments on the market. One of them is a CFD or CFD on a cryptocurrency. Here's how to invest in Cosmos using CFDs.
What is CFD?
CFD stands for Contracts for Differences. In the case of assets, we are talking about the price difference that has formed over a certain period.
With the help of CFDs, you can earn on "predictions" of the behavior of the cryptocurrency rate. To do this, the investor needs to place a bet on which direction the asset price will go. If his prediction comes true, he will receive, as a prize, the very difference in price. Losers, on the other hand, will have to pay for their mistake. The loss will be the difference in the opening and closing prices of the contract.
The level of earnings or losses, including, depends on how soon the contract for the difference in price will be closed.
How does CFD work?
CFD is a contract whereby the investor does not need to purchase cryptocurrency.
The system fixes the value of the asset at the time of the contract execution and the user's forecast.
When concluding a CFD, the service provider requires a deposit from the investor. This amount will be the guarantor of his solvency in case of loss.
An investor can place bets on further movements of assets across various trading pairs. They can be composed of two different cryptocurrencies, or a digital asset and fiat, for example, the US dollar.
Depending on the current market conditions, the investor can choose one or more trading pairs to work with.
Pros of crypto CFDs
Crypto CFDs have a number of advantages. We suggest that you familiarize yourself with them more closely. The pluses of CFDs on cryptocurrency include the following points:
- Small investments. CFDs allow you to make money on cryptocurrencies without buying them. All that is required is a deposit.
- You can make money quickly. The digital asset market is extremely volatile. This feature opens up a lot of opportunities for investors to make money on the movement of the cryptocurrency rate.
- The investor can choose the cryptocurrency in order to enter into a contract for the price difference.
- You can earn money on CFDs around the clock.
- You can work without restrictions. Many platforms do not have a limit on CFD transactions for cryptocurrencies.
- You can work with CFDs with leverage. The tool allows you to significantly increase income if the forecast comes true.
Cryptocurrency CFDs are a financial instrument that carries risks. At the same time, CFD attracts investors with the ability to quickly make money on forecasts.