Cosmos is a decentralized network of independent parallel blockchains, each powered by BFT consensus algorithms like Tendermint consensus.
In other words, Cosmos is an ecosystem of blockchains that can scale and interoperate with each other. Before Cosmos, blockchains were siloed and unable to communicate with each other. They were hard to build and could only handle a small amount of transactions per second. Cosmos solves these problems with a new technical vision. In order to understand this vision, we need to go back to the fundamentals of blockchain technology.
Who Are the Founders of Cosmos?
The co-founders of Tendermint — the gateway to the Cosmos ecosystem — were Jae Kwon, Zarko Milosevic and Ethan Buchman. Although Kwon is still listed as principal architect, he stepped down as CEO in 2020. He maintains he is still a part of the project but is mainly focusing on other initiatives. He has now been replaced as Tendermint’s CEO by Peng Zhong, and the whole board of directors was given quite a substantial refresh. Their goals include enhancing the experience for developers, creating an enthusiastic community for Cosmos and building educational resources so greater numbers of people are aware of what this network is capable of.(https://coinmarketcap.com/currencies/cosmos/)
How does Cosmos fit in the broader blockchain ecosystem?
THE BITCOIN STORY (BLOCKCHAIN 1.0)
To understand how Cosmos fits in the blockchain ecosystem, we need to go back to the beginning of the blockchain story. The first blockchain was Bitcoin, a peer-to-peer digital currency created in 2008 that used a novel consensus mechanism known as Proof-of-Work (PoW). It was the first decentralized application on a blockchain. Soon, people started to realize the potential of decentralized applications and the desire to build new ones emerged in the community.
At the time, there were two options to develop decentralized applications: either fork the bitcoin codebase or build on top of it. However, the bitcoin codebase was very monolithic; all three layers—networking, consensus and application — were mixed together. Additionally, the Bitcoin scripting language was limited and not user-friendly. There was a need for better tools.
THE ETHEREUM STORY (BLOCKCHAIN 2.0)
In 2014, Ethereum came in with a new proposition for building decentralized applications. There would be a single blockchain where people would be able to deploy any kind of program. Ethereum achieved this by turning the Application layer into a virtual machine called the Ethereum Virtual Machine (EVM). This virtual machine was able to process programs called smart contracts that any developer could deploy to the Ethereum blockchain in a permissionless fashion. This new approach allowed thousands of developers to start building decentralized applications (dApps). However, limitations to this approach soon became apparent and still persist to this day.
Limitation #1: Scalability
The first limitation is scaling – decentralized applications built on top of Ethereum are inhibited by a shared rate of 15 transactions per second. This is due to the fact that Ethereum still uses Proof-of-Work and that Ethereum dApps compete for the limited resources of a single blockchain.
Limitation #2: Usability
The second limitation is the relatively low flexibility granted to developers. Because the EVM is a sandbox that needs to accommodate all use cases, it optimizes for the average use case. This means that developers have to make compromises on the design and efficiency of their application (for example, requiring use of the account model in a payments platform where a UTXO model may be preferred). Among other things, they are limited to a few programming languages and cannot implement automatic execution of code.
Limitation #3: Sovereignty
The third limitation is that each application is limited in sovereignty, because they all share the same underlying environment. Essentially, this creates two layers of governance: that of the application, and that of the underlying environment. The former is limited by the latter. If there is a bug in the application, nothing can be done about it without the approval of the governance of the Ethereum platform itself. If the application requires a new feature in the EVM, it again has to rely entirely on the governance of the Ethereum platform to accept it.
These limitations are not specific to Ethereum but to all blockchains trying to create a single platform that would fit all use cases. This is where Cosmos comes into play.
THE VISION OF COSMOS (BLOCKCHAIN 3.0)
The vision of Cosmos is to make it easy for developers to build blockchains and break the barriers between blockchains by allowing them to transact with each other. The end goal is to create an Internet of Blockchains, a network of blockchains able to communicate with each other in a decentralized way. With Cosmos, blockchains can maintain sovereignty, process transactions quickly and communicate with other blockchains in the ecosystem, making it optimal for a variety of use cases.
This vision is achieved through a set of open-source tools like Tendermint, the Cosmos SDK, and IBC designed to let people build custom, secure, scalable and interoperable blockchain applications quickly. Let us take a closer look at some of the most important tools in the ecosystem as well as the technical architecture of the Cosmos network. Note that Cosmos is an open-source community project initially built by the Tendermint team. Everyone is welcome to build additional tools to enrich the greater developer ecosystem. (https://v1.cosmos.network/intro)