WTF is Cosmos?

5 min read

Blockchains have come a long way in the short amount of time they have been around. In the past 10 years we’ve seen the term blockchain go from specifically referring to bitcoin, to describing a whole variety of projects. Bitcoin made the introduction, but the technology didn’t stop there.

My point in going over the history is this — in 2008 we never envisioned a time when there would be multiple blockchains, so interoperability wasn’t a concern. A lot has changed since the early days of blockchains, as projects started to pop up, building off of the technology introduced by Satoshi Nakamoto. And that process has only accelerated. By the end of 2017, roughly 5 billion dollars were raised by way of ICO.

Obviously you could make the point that not all of these projects are going to succeed, and I wouldn’t argue with you. Some unofficial measures have 50% of the companies that launched ICOs are now essentially dead projects.

With the road to blockchain progress is littered with these cautionary tales, there are projects learning from the mistakes of their predecessors. It’s likely that there are going to be multiple chains that find success, leading to a blockchain-backed world. One of my favorite things about blockchains is that they have so many potential uses, winners are going to emerge in each field.

But that brings up a problem that would have been very difficult to envision. In a world with multiple blockchains we’re going to need them to communicate and work together.

Enter Cosmos

Blockchains are all about efficiency, ideally. So what protocols can we institute in order to make popular existing blockchains work together? And how can we do so in a scalable manner, so that these blockchains can work together to address real world demand put upon them?

That’s were Cosmos comes in. They, along with a few other projects, are specifically addressing the interoperability issue, while maintaining the goal scalability.


We’ve already gone over scalability, but here’s a quick refresher. Blockchains, in their current state, can only process a handful of transactions per second. If more people want to use the network, there may be more transactions than the network can actually process.

Several scaling solutions have been explored, and it is something that multiple people are working to solve. Whether it be the Lightning Network, SegWit, or Raiden, these projects use different strategies to solve the same issue of scalability.


The other issue that Cosmos looks to solve is interoperability. All of these chains have been built separately. But for to achieve a truly interconnected blockchain world, these chains are going to have to communicate.

Right now, Ethereum, Dash, and Litecoin, for example, have no means to communicate or work together. If you want to exchange from one chain to another, you’re going to have to use an intermediary to exchange those tokens. This gives exchanges unnecessary power and revenue. Blockchains are all about skipping the middleman, so it is no surprise people are exploring chain to chain transactions.

The structure of the actual Cosmos blockchain is pretty interesting. Interoperability chains can best be described as hubs with spokes around them, kind of like a wheel. Each spoke is a different chain, and transactions can flow both ways. For example, you could conduct a transaction in bitcoin that goes to the Ethereum blockchain, using the Cosmos blockchain as a hub to facilitate this transaction.

This is actually a pretty difficult task, since smart contracts are often written in different programming languages depending on which chain they are designed for. This doesn’t matter with Cosmos. It acts as a interpreter or translator of smart contracts, allowing different dApps and code to interact with each other. Essentially, this removes the “language barrier” that prevents blockchains from communicating.

The Cosmos Blockchain Structure

Cosmos is its own blockchain, with several blockchains running parallel with the central hub. Cosmos has a native token known as Atom. It is only used for staking, creating a penalty for any malicious actor.

While Cosmos is the hub, the projects that feed into this main hub are known as zones. Each zone will have to stake in order to become part of the Cosmos ecosystem. Some of these zones are Ethermint by the Tendermint project and OmiseGo. These entities are leading the way in cross chain protocols.

WTF IS is our series where we explore some of the most frequently asked questions about blockchains, cryptocurrencies, and the technology surrounding these fields. Want to acquaint yourself with blockchain? Then WTF IS is the perfect series for you!

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