What is the Cosmos Blockchain?

Get up to speed on Cosmos, Tendermint, and the ATOM token.

Jan 5 · 8 min read

The Cosmos blockchain is a network of parallel, independent blockchains supported by Byzantine Fault Tolerant consensus algorithms like Tendermint. Cosmos' primary objective is to improve interoperability between blockchains. This would allow users to trade digital assets that are native to one blockchain like Bitcoin, for coins on another blockchain like Ethereum.

The central focus of the Cosmos platform is to act as the internet of blockchains. The goal of the project is to create a network that allows all other blockchains to communicate with one another and do so in the most efficient and fastest way possible.

There are three core components that work together to achieve the Cosmos mission: Tendermint Core, the Cosmos Software Development Kit (SDK) and the application blockchain interface.

The Cosmos team brings a new approach to solving the interoperability and scalability issues that are currently plaguing the blockchain space. The development team has been working on building the Cosmos network for three years. All of the key stakeholders involved possess significant experience developing other blockchain and tech-related projects that are making a genuine impact on the world today.

The team, an innovative roadmap, and the technical implementations that make up the Cosmos project are the fundamental reasons the network and its ATOM tokens collectively hold a market value of over $850 million. Cosmos ATOM token ranks as one of the top fifteen most valuable cryptocurrency projects on the planet.

The Cosmos Blockchain Team

Jae Kwon is the CEO of Tendermint, the underlying technology that helps Cosmos function. Tendermint is a mechanism that mitigates the risks associated with the Byzantine Generals Problem. Kwon also worked for Yelp, Scramble.io and Flywheel Networks. Tendermint CTO Ethan Buchman is a blockchain researcher out of the University of Guelph in Canada. Peng Zhong is Tendermint’s head of design and a full stack developer. Not only did they develop Tendermint, but they also helped get the Cosmos project started in 2016, launched an initial coin offering a year later that raised $17 million and distributed $168 million in ATOM tokens to contributors.

Tendermint and the Byzantine Generals Problem

This problem occurs in all blockchains because blockchains are made of nodes communicating with one another. They work to validate transactions, but they have to work in a completely trustless environment. They need to trust each other without having all of the information. Nodes don’t know whether their counterparts are good or bad. Nodes need to complete transactions without all of the data and be able to validate that everything is acceptable.

Tendermint is a Practical Byzantine Fault Tolerance, meaning it successfully solves this problem.

How does Cosmos work?

Four Key Advantages of Tendermint

  1. Tendermint can handle 10,000 transactions per second.
  2. The network needs only light client security, making it ideal for mobile and Internet of Things-related use cases. Most other blockchains can’t offer that.
  3. It incorporates fork accountability, which means double-spending attacks and censorship can be easily handled.
  4. Tendermint Core is application-agnostic, which means it can turn any deterministic black-box application into a distributed blockchain.

Tendermint Core connects to blockchain applications using the Application Blockchain Interface.

The Cosmos Hub and Zones

Since the Hub plays a role in everything that happens on the network, it’s protected by a decentralized group of validators. This enhances security and makes it possible for the entire network to withstand severe attacks.

The zones communicate with the Hub using inter-blockchain communication packets. The zones have their own validators, which take a certain amount of ATOM tokens with them to pass through the Hub. If any of the zones start acting suspiciously in an attempt to compromise the integrity of the network, the number of ATOM tokens they get to keep gets reduced by the Hub. This deters malicious actors.

The real value of these Hubs, zones, and the inter-blockchain communication packets is that all parties involved in an exchange of value can get what they want. All while maintaining independent token models, economics, and governance systems. It is as if each of these parties is its own blockchain, with the Cosmos network acting as the internet of blockchains.

What is the ATOM token?

ATOM tokens also act as a means of accounting for transaction fees. That doesn’t mean fees must be paid using ATOM tokens. Other currencies can be used to pay transaction fees. The incentive for using ATOM tokens for staking is that users can receive a portion of the fees in different currencies depending on the number of ATOM tokens being staked. Remember that zones are their own blockchains in the Cosmos network, which means they have their own native tokens. Validators can accept any combination of tokens they want as a transaction fee. 2% of the fees collected go into a reserve pool, and the other 98% goes to validators based on the stake they have invested in the network.

⚛️ Connect your KeepKey to the ShapeShift Platform and trade dozens of assets for Cosmos (ATOM). Trade with the best rates, no commission or spread.

Which blockchains work with Cosmos?

Binance Chain

Kira Interchain Exchange

Aragon Chain


The Internet of Blockchains

Cosmos ATOM on the ShapeShift Platform

Visit ShapeShift.com to trade Cosmos ATOM commission free with your KeepKey hardware wallet.
Visit ShapeShift.com to trade Cosmos ATOM commission free with your KeepKey hardware wallet.
> Visit ShapeShift.com to trade Cosmos ATOM commission free with your KeepKey hardware wallet <

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