1. 1st layer: The Tendermint Core
  2. 2nd layer: The Cosmos SDK
  3. 3rd layer: IBC


What is it?

Cosmos sets itself apart from other blockchain protocols thanks to its advanced interoperability and different methods of customization of their “smart contracts”. Cosmos was launched by the Interchain Foundation (ICF), a Swiss non-profit foundation that was shaped to guide the development of Cosmos and its ecosystem in order to contribute to the Cosmos Network. The ICF contracted Bits Inc (dba Tendermint Inc), a software development company in order to develop the Cosmos Network.

Its founding team decided to name the Cosmos Network as the “Internet of blockchains”, because their aim is to create a web of blockchain/crypto networks which can be compatible with all the blockchains within it. The Cosmos ecosystem is rapidly expanding, it is important to mention that all of what is on its network are independent interconnected blockchains built using developer-friendly application components and it is also connected with the innovative IBC (Inter-Blockchain Communication) protocol.

Cosmos by default instead of prioritizing its own network, its intention is to spread across all of its ecosystem of networks the ability to share data and tokens without a central party facilitating the transactions. Each new independent blockchain created inside Cosmos is called a “zone”, which is then ties up to the Cosmos Hub, which keeps a record of the state of each zone and vice versa.

How does it work?

Cosmos works thanks to the proof-of-stake blockchain mechanism and is powered by its native cryptocurrency ATOM. But its PoS mechanism is a little bit different from others it also works thanks to three different layers, which are the following:

1st layer: The Tendermint Core

The underlying technology behind Cosmos is the Tendermint Byzantine Fault Tolerance (BFT) consensus algorithm, which is designed to ensure finality, order consistency, and optional availability.

2nd layer: The Cosmos SDK

The industry standard for building blockchains, Cosmos SDK is built to deliver the best in decentralized technologies: speed. Transaction throughput and latency are core components, and speed is what matters most, no one wants to pay a fee to have their transaction take hours or even days to confirm.

3rd layer: IBC

The standard protocol for inter blockchain communication, IBC allows blockchains in the ecosystem to connect so that they can transfer tokens and other data between each other frictionlessly and seamlessly.

What is ATOM?

Atom (ATOM) is the primary cryptocurrency existing on top of the Cosmos platform that is designed to facilitate communication, scaling and interoperation among the independent chains. You can also stake ATOM in order to make the network stronger and profit off of transactions fees.

What can I build with Cosmos?

With Cosmos you build a wide variety of things, for starters you can create organizations, cryptocurrencies, blockchains, marketplaces, social networks and even games.

Cosmos without a doubt, has the potential to change the crypto world forever and it is already doing so because blockchains like the Binance Chain and Terra are built using its tech.

This is how the Cosmos Network operates. (Source: https://cryptonews.com/coins/cosmos-2/)