Kraken home
Coinmama home

Cosmos Crypto Explained

cosmos crypto explained
Kraken home

Cosmos crypto is a network of numerous autonomous blockchains known as zones. The zones are driven by Tendermint BFT, which provides a high-performance, reliable, and secure PBFT-like consensus engine with stringent fork-accountability guarantees over malicious actors' behaviour.

Tendermint BFT is an excellent choice for scaling public proof-of-stake (PoS) blockchains. Cosmos crypto is a multi-asset PoS cryptocurrency with a simple governance system that allows the network to adapt and update.

Functions of Hubs and Zones

The Cosmos crypto network's Hub and zones connect through an inter-blockchain communication (IBC) protocol, which is like a virtual UDP or TCP for blockchains.

Tokens may be moved securely and swiftly from one zone to another without the requirement for liquidity exchange. All inter-zone token transactions are instead routed through the Cosmos Hub, which maintains track of the total number of tokens owned by each zone.

Each zone is separated from the non-success of other zones by the hub. Zones provide future compatibility with new blockchain breakthroughs since anybody may connect a new zone to the Cosmos Hub. This design addresses several current issues in the blockchain field, such as application compatibility, scalability, and seamless upgradability. Zones produced by other blockchain systems may be connected to the Cosmos Hub. Cosmos can grow indefinitely to accommodate global transaction demand because of these zones. Zones are particularly well-suited to dispersed exchanges, which will be enabled.

Cosmos crypto is more than a single distributed ledger, and the Cosmos Hub is not a fortress or the centre of the cosmos. The aim is to develop a protocol for an open network of distributed ledgers that will serve as a new basis for future financial systems based on cryptographic, sound economic, consensus theory, transparency, and accountability principles.

Etoro home

Public Blockchain

The Cosmos crypto Hub is the Cosmos Network's first public blockchain, powered by the Tendermint BFT consensus algorithm. The Tendermint open-source project was founded in 2014 to solve Bitcoin's proof-of-work (PoW) consensus algorithm's speed, scalability, and environmental challenges.

The Tendermint team was the first to conceptually demonstrate a PoS cryptocurrency that addresses the nothing-at-stake problem suffered by first-generation PoS cryptocurrencies such as NXT and BitShares1.0 by using and improving on proven BFT algorithms developed at MIT in 1988.

All Bitcoin mobile wallets now employ trusted servers to offer transaction verification. This is because PoW needs many confirmations before a transaction can be regarded as permanently committed. On platforms like as CoinBase, double-spend attacks have already been proven. Tendermint, unlike other blockchain consensus systems, provides immediate and provably secure mobile-client payment verification. Because the Tendermint is designed to never fork, mobile wallets may get fast transaction confirmation, making trustless and practical payments possible on cell phones. This has far-reaching implications for the Internet of Things applications.

Validators in Cosmos crypto perform a similar function to Bitcoin miners, but instead vote using cryptographic signatures. Validators are secure, specialized computers in charge of committing blocks. Non-validators can delegate their staking tokens (dubbed "atoms") to any validator to receive a percentage of block fees and atom rewards, but they risk being penalised (slashed) if the delegate validator is hacked or breaches the protocol. Tendermint BFT consensus's established safety guarantees, as well as the collateral deposit of stakeholders–validators and delegators–provide demonstrable, measurable security for nodes and light clients.

Validators and delegators on the Cosmos crypto Hub can vote on proposals to automatically adjust system default settings, coordinate upgrades, and vote on revisions to the human-readable constitution that governs the Hub's rules. The constitution promotes stakeholder cooperation on issues such as theft and bugs (such as the TheDAO incident), allowing for faster and cleaner resolution.

Each zone might have its constitution and governing process. The Cosmos Hub, for example, might have a constitution that guarantees immutability at the Hub (no rollbacks except for defects in the Cosmos Hub node implementation), but each zone can specify its rollback policy. The Cosmos network provides maximum freedom and the opportunity for permissionless experimentation by facilitating interoperability among different governance zones.

On this basis, the Cosmos crypto Hub runs several distinct blockchains known as "zones". A steady stream of recent block commits from zones placed on the Hub helps it maintain track of each zone's current condition. Similarly, each zone monitors the Hub's status. Packets of data are then transmitted from one zone to another by publishing Merkle-proofs as proof that the data was delivered and received. This technology is commonly known as inter-blockchain communication, or IBC for short.

Since the Cosmos crypto Hub serves as the primary ledger for the entire system, its security is critical. While each zone can be secured by as few as four Tendermint blockchains, the Hub must be secured by a globally decentralised set of validators capable of withstanding the most severe attack scenarios.


A Cosmos zone is a self-contained blockchain that uses IBC messages to connect with the Hub. According to the Hub, a zone is a multi-asset dynamic-membership multi-signature account that may send and receive tokens using IBC packets. A zone, like a cryptocurrency account, cannot send more tokens than it has, but it can accept tokens from those who do. A zone can be designated as a "source" of one or more token types, allowing it to raise the supply of those tokens.

Validators of a zone connected to the Cosmos Hub may stake atoms of the Cosmos Hub. While double-spend assaults on these zones would result in the cutting of atoms with Tendermint's fork accountability, a zone with more than 2/3 Byzantine voting power can commit an incorrect state.

Because the Cosmos Hub does not validate or execute transactions committed on other zones, users must deliver tokens to zones they trust. In the future, the Cosmos Hub's governance system may approve Hub upgrade requests that consider zone failures.

Etoro home
Author: Emmanuel Baiden

Author: Emmanuel Baiden

7 years experience within the financial services sector most notably in Sales, Trading, research and writing articles within the crypto space. I have a bachelor's degree in International Business and a Master's in Investment and Risk Finance . I am also an associate member of the Chartered Institute for Securities and Investment.


This site uses cookies, please see ourCookie Policyfor more information.