The Beginners Guide to Cosmos Blockchain Platform

Cosmos blockchain is a decentralized network of independent parallel blockchains, supported by BFT consensus algorithms such as Tendermint consensus. Cosmos offers a set of tools and SDKs for developing and hosting a dApp in the Cosmos ecosystem.

Before the existence of Cosmos, blockchains were isolated and unable to interact with each other. Cosmos addressed this issue and resolved it, providing a new vision to the blockchain industry.

In this article, all the following important aspects of Cosmos are discussed in detail:

• What is Cosmos?
• What problem does Cosmos resolve?
• What are the significant tools/ frameworks/ SDKs used by Cosmos?
• How does Cosmos work?
• What Cosmos blockchain development services does LeewayHertz provide?
• Conclusion

What is Cosmos?

Cosmos is an ever-growing ecosystem of connected applications and services developed for the decentralized future. It is a community-owned and operated universe of connected services. The apps and services on Cosmos connect using Inter-Blockchain Communication (IBC) protocol. It enables exchanging assets and data freely across sovereign decentralized blockchains.

The main focus of Cosmos is on customizability and interoperability. Instead of prioritizing its network, Cosmos fosters the ecosystem of networks that enables tokens and data sharing programmatically without any central party facilitating the activity.

Every new independent blockchain created on Cosmos, named Zone, is tethered to Cosmos Hub. The Cosmos hub maintains the record of the state of each Zone. It is a proof-of-stake blockchain that is powered by its native cryptocurrency, ATOM.

The Vision

The vision of Cosmos is to help developers to build blockchains easily and remove the barriers between blockchains by allowing them to interconnect. The end goal is to create a network of blockchains that can communicate with each other. Cosmos allows blockchains to maintain sovereignty, process transactions efficiently and connect with other blockchains in the ecosystem.

To accomplish its goal, Cosmos uses open source tools like Tedermint, Cosmos SDK and IBC. It helps to build custom, secure, interoperable and robust blockchain applications.

What problem does Cosmos resolve?

Scalability

Decentralized applications built on the Ethereum blockchain are inhibited by the shared rate of 15 transactions per second. The reason behind it is that Ethereum still uses the Proof-of-Work mechanism and its dApps compete for limited resources of the single blockchain.

The problem is not limited to Ethereum but to every blockchain creating a single platform that would fit all use cases.

Cosmos Solution

Cosmos leverages two kinds of scalability:

Vertical Scalability

It provides methods for scaling blockchains. Tendermint BFT can handle thousands of transactions per second by optimizing its components and moving away from Proof-of-Work. 

Horizontal Scalability

Even if the applications and consensus engine are highly optimized, the transaction throughput of a single chain goes down, which it can not surpass. It is the limitation of vertical scalability. Multi-chain architectures provide the solution to this limitation. Implementing multiple parallel chains that run the same application and are operated by a common validator set can make blockchains theoretically infinitely scalable.

Cosmos offers vertical scalability at launch, which is a major improvement on current blockchains and will implement horizontal scalability solutions after completing the IBC module.

What are the significant tools/ frameworks/ SDKs used by Cosmos?

Agoric Swingset

Agoric’s Cosmic SwingSet enables developers to test smart contracts build with ERTP in various blockchain setup environments. ERTP (Electronic Rights Transfer Protocol) is Agoric’s token standard for transferring tokens and other digital assets in JavaScript.

CosmWasm

It enables developers to write multi-chain smart contracts in Rust.

Ethermint

The Ethereum Virtual Machine was implemented as a Cosmos SDK module, making it possible to deploy proof-of-stake blockchains that support Ethereum smart contracts.

Cosmos SDK

It is a library collection of different SDKs that allow any blockchain protocol developer to easily write/run/execute the programming code with the help of the provided SDK library.

IBC Protocol

Inter-Blockchain Communication is another protocol that provides a way by which one blockchain protocol can communicate with another blockchain protocol. It is used to build a wide range of cross-chain applications that includes atomic swaps, token transfers, multi-chain Smart contracts and data and code sharding of different kinds.

How does Cosmos work?

Cosmos is a three-layer network:

1. Application: It handles transactions and updates the state of the network.
2. Networking: It enables connection between transactions and blockchains.
3. Consensus: It provides a mechanism for nodes to agree on the current state of the system

Cosmos uses open-source tools to tie all the layers together and enable developers to build blockchain applications.

Tendermint Byzantine Fault Tolerance (BFT)

The Tendermint BFT engine is the essential element of the layered design of Cosmos. It allows developers to create blockchains without having to code from scratch.

Tendermint BFT packages the consensus and networking layers into a generic engine and allows developers to focus on application development instead of the complex underlying protocol. Thus, Tendermint saves hundreds of development hours. It is an algorithm used by computers running on Cosmos to validate transactions, secure networks and commit blocks to the blockchain. It uses Application Blockchain Interface to connect applications through a protocol.

Tendermint Core uses Proof-of-Stake (PoS) mechanism that keeps the distributed network running Cosmos Hub in sync. The validator nodes first need to stake ATOM to power the blockchain and vote on changes. The amount of ATOM staked determines the voting power. Users are also allowed to delegate tokens to other validators, allocating votes to them while still earn a portion of the block reward. Validators, in turn, are incentivized to perform honestly.

The properties that make Tendermint BFT a state-of-art blockchain engine:

• Private or public blockchain ready
  The role of Tendermint BFT is to handle networking and consensus layers of the blockchain. It means it helps nodes propagate transactions and validators agree on a set of transactions to append to the blockchain. The role of the application layer is to define how the validator set is constituted.
  Therefore, it enables developers to build both public and private blockchains using the Tendermint BFT engine. When the application defines that validators are selected based on the number of tokens they have at stake, the blockchain is characterized as Proof-of-Stake (PoS). However, if the application defines that only the restricted set of pre-authorized entities can be validators, blockchain is characterized as private or permissioned.
  Developers can customize the rules that define how the validator set of the blockchain modifies.
• High performance
  Tendermint BFT can handle thousands of transactions per second and have a block time on the order of one second.
• Security
  Tendermint consensus is fault-tolerant and accountable. When a blockchain forks, it provides a way to determine the liability.
• Instant finality
  Instant finality means that forks are never created until more than one-third of the validators are honest (byzantine). Users can assure that their transactions are finalized as soon as the block is created. However, it is not the case with proof-of-work blockchains such as Ethereum or Bitcoin.

Cosmos Hubs and Zones

Cosmos proposed a modular architecture to connect different heterogeneous blockchains. The architecture consists of two classes: Zones and Hubs. Zones are the regular heterogeneous blockchains and Hubs are particularly designed blockchains to connect Zones.

Once an IBC connection is created between a zone and hub, zones can automatically access every other Zone connected. Therefore, only a limited number of connections are required with a restricted set of hubs. Moreover, hubs prevent double-spending among zones. When a zone gets a token from the hub, it only needs to trust the origin zone of the token.

The first hub on the Cosmos network is Cosmos Hub. It is a proof-of-stake blockchain whose native staking token is ATOM and its transaction fees are payable in multiple tokens. The launch of the hub also indicates the launch of the Cosmos network.

Inter-Blockchain Communication Protocol

The principle behind IBC working is quite simple. Let’s understand with an example. Suppose an account on chain A has to send ten tokens (ATOM) to chain B.

Tracking

Chain B continuously receives headers of chain A and vice versa. It enables each chain to track the validator set of the other. It means each chain runs the light client of the other.

Bonding

As soon as IBC transfer is initiated, ATOM is locked up (bonded) on chain A.

Proof Relay

After the ATOM are bonded, proof confirming that 10 ATOM are bonded is relayed from chain A to B.

Validation

On-chain B, the proof is verified against chain A’s header. If valid, 10 ATOM vouchers are created on chain B.

A similar process is used to unlock ATOM when they return to the origin chain.

Cosmos SDK

Cosmos SDK is a generalized framework that builds secure blockchain applications on Tedermint BFT, a simple task. It implements two major principles:

• Modularity
  Cosmos SDK creates an ecosystem of modules that helps developers spin up application-specific blockchains without the necessity to code every bit of functionality of the apps from scratch. Creating a module for Cosmos SDK is open to all. Moreover, using ready-built modules in the blockchain is as simple as importing them into the application. 
• Capabilities based security
  It constrains the security boundaries among modules and enables developers to better reason about the composability of modules. Hence, it limits the scope of unexpected or malicious interactions.

Cosmos SDK includes useful developer tools to build CLI, REST servers and various other utility libraries.

What Cosmos blockchain development services does LeewayHertz provide?

dApp development

We are the leading blockchain experts and provide decentralized applications development services based on Cosmos blockchain to our clients and help them maximize ROI and thrive in the market.

Smart Contract development

We offer Smart Contract development services for public and private blockchain networks to bolster various dApps. 

Wallet development

We have a well-versed team of blockchain developers who are experts in developing blockchain wallet applications. Wallets on Cosmos blockchain allow holding an array of currencies and digital assets and enables users to check balance and track the history. Cosmos SDKs, Libraries, toolkits and other resources help develop Web, IOS & Android wallets.

Defi applications

We create exchanges and marketplaces that allow anyone worldwide to buy, trade, invest and lend conveniently.

Building game economies

We create in-game assets that are available forever and bring lasting value to gamers by letting them take their loot to another game or into the real world.

Conclusion

In a nutshell, Cosmos is not a product, but an ecosystem developed on a set of modular, interchangeable and adaptable tools. It makes blockchains powerful and simple to develop using Tendermint BFT and Cosmos SDK. Cosmos provides the advantage of the scalability of blockchain applications and scales it to millions of users using vertical and horizontal scalability solutions.

If you’re interested in building blockchain applications on Cosmos for your project, connect with us and leverage our blockchain development services. Schedule a call and start by discussing your requirements with us.