For some time now, the blockchain community has been eagerly awaiting the launch of Cosmos. Cosmos is a blockchain that was developed to improve interoperability among other blockchains. Finally, the product went live launching a Cosmos Hub made up of a series of blockchains that depend on the proof-of-stake consensus algorithm. For now, users will be unable to enjoy the blockchain interoperability that Cosmos offers for existing blockchains. This feature will only be available when the Inter-Blockchain Communication protocol is activated after validators vote.
Blockchain Interoperability: A Step In Innovation
The Cosmos project has been in the works for more than three years. Ever since the possibility of blockchain interoperability came to light. The project raised up to $16 million in an ICO in 2017 with Tendermint Inc overseeing the release of the products. The director of the organization, Zaki Manian said:
“We want to take the blockchain development cycle from idea to implementation down from years to months. This is how we’re trying to transform the blockchain space.”
The director said that the software development kit that was debuted by the organization in February is already being used by big companies like Binance. He said that the Cosmos Hub is going to basically remove possible barriers of innovation in the space and lead to the development of an entirely new system of finance. Manian continued:
“Out of all these building blocks, [you’ll be able to compose] an entirely open system of finance that operates to scale and can be composed of individual, specialized chains that do different things. In order to make this whole vision of connecting blockchains work, there needs to be a set of operators who have skin in the game to coordinate this blockchain network.”
Bitcoin (BTC) Price Today – BTC / USD
Blockchains that are based on the proof-of-work consensus mechanism like Bitcoin and Ethereum, give miners who compete for block rewards the power to validate. The process requires a significant amount of electricity. With a proof-of-stake system, the validators are selected automatically based on a different metric of staked tokens that allows transaction finalization or block creation. He added:
“In proof-of-stake, the costs and rewards [of the system] are internal. So, we had to come up with a very sophisticated system of distributing rewards, of distributing the speculator taxation system, of punishing people for malicious behavior, of punishing people for going offline. All of it has to be internal to the system and that’s why proof-of-stake is such a significant engineering feat over proof-of-work.”
Cosmos users don’t have the power to transfer their ATOM tokens yet. The ATOM is the native token of the blockchain. They will be used as collateral for validators on the blockchain. It would serve as a criterion for membership selection on the blockchain. As soon as the system and validator sets are perceived to be stable, the token holders will vote for users to have the power to transfer the ATOM token.
When holders and stakers get incentives, the incentive will be in ATOM for now. In time, other tokens can be added to the mix. The launch of this blockchain for blockchains is going to propel others in the blockchain space to develop similar blockchains.
What do you think about blockchain interoperability on systems like Cosmos? Is it going to thrive or fail? Share your thoughts in the comment section.