What is Cosmos (ATOM) Crypto and How to Invest in It?
Cosmos is an ever-expanding ecosystem of many collective independent blockchains. Known as the “internet of blockchains”, each new independent blockchain created within Cosmos is powered by its native ATOM cryptocurrency.
The goal of Cosmos crypto is to create an ecosystem of networks. Data and tokens can be shared through these networks programmatically with zero intervention from any central party.
Every new blockchain created within Cosmos is tethered to Cosmos Hub – a proof-of-stake blockchain that’s powered by ATOM cryptocurrency.
Read on to know how Cosmos works and how to invest in it.
How to Invest in Cosmos ATOM Cryptocurrency
For the last two years, the ATOM crypto price has been hovering between $8 and $15 per coin. When the ATOM token was launched, it was the 38th largest crypto by market capitalisation. Since then, the price of the coin has gone up by around 110%.
The token trades on many popular exchanges, such as Crypto.com, Coinbase, Kucoin and more. You can begin investing in ATOM coin by following these simple steps:
- Step 1: Create an Account
You will have to open an account on your preferred crypto exchange to buy ATOM tokens. However, make sure that the platform you choose allows trading for ATOM. - Step 2: Make the Deposit
After creating an account, you need to deposit some amount of sum, either in the form of Bitcoin, Stablecoin or dollars. This depends on the trading pairs an exchange allows. - Step 3: Start Trading
Select a trading pair that includes the ATOM coin and the currency. For example, if you currently have Bitcoin and seek to buy ATOM, choose “BTC/ATOM”. After that, create a buy order for the number of coins you want to purchase.
However, for exchanges that offer order books, you need to select the sell order at the top of the book and then continue with your purchase. Alternatively, you can also use a decentralised exchange to buy ATOM coins. - Step 4: Store Your Coin
After buying the coin, you can consider moving your crypto from the exchange to your personal crypto wallet. This will provide extra security to your assets.
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How does Cosmos Crypto Network Work?
The network of Cosmos crypto works via different technological blocks. All such blocks work together to achieve the needed function. Here are the blocks that the network operates on:
1. PoS (proof-of-stake) Consensus Mechanism
Cosmos utilises the PoS mechanism to validate transactions on its network. This mechanism allows crypto traders to stake some of their cryptos to earn passive income. This works as long as the coin belongs to that particular blockchain. Upon then, the system randomly chooses stakers to help validate blocks.
2. Networking Functionality
Any procedure facilitating communication between various platforms on the Cosmos network becomes its networking functionality. Cosmos crypto allows the inclusion of different functions from various sources. This is one of the primary aspects of the Cosmos Hub.
3. Housed Applications
Housed applications are the platforms that are used on the Cosmos network. These applications work to facilitate transactions on the network. This allows users to update their progress continuously while adhering to the PoS consensus mechanism. Each of the nodes on the Cosmos network is referred to as zones. Moreover, the Cosmos crypto maintains a record of each zone’s state.
That said, the Cosmos blockchain features three layers. They are tied together by open-source tools, allowing users to build blockchain applications. These layers include:
- Application layer, which protects transactions and updates the network’s state
- Networking layer, which allows communication across blockchains
- Consensus layer, where nodes agree on the prevalent system state
What is a Cosmos Coin?
The in-house staking token in Cosmos is ATOM. Also known as Cosmos coin, ATOM is used to maintain interoperability between all zones in the Cosmos hub.
Unlike other cryptocurrencies, there is no limit supply of new Cosmos coins (ATOM). The network is designed to adjust the number of tokens created based on the amount of ATOM being staked.
What is ATOM Crypto?
ATOM is the native token of Cosmos. It powers the blockchain and is also used to validate transactions. Thus, you can use this token to earn passive income and conduct trading with other users.
You can easily earn ATOM cryptocurrency through a hybrid PoS algorithm and assist in securing the Cosmos hub. This crypto also plays a major role in the network’s governance.
Having said that, Cosmos compares its native token to ASIC machines that miners use to mine Bitcoin.
Benefits and Drawbacks of Cosmos Crypto
When it comes to the world of cryptos, there are always some pros and cons. Consequently, Cosmos cryptoextends the following benefits and drawbacks:
The Benefits
- Cosmos proves that collaboration between different blockchains does not disrupt their anonymity. Moreover, Cosmos crypto has tackled the problem of scalability, which was a major headwind in the cryptocurrency space.
- Multiple other projects in the community support Cosmos crypto. This is primarily because of the strong outlook it exhibits.
The Drawbacks
- Cosmos faces challenges from a technical viewpoint. For instance, some blockchains are unwilling to participate in a collection of networks. This keeps the future of this project in question.
- Cosmos also faces strong competitors, such as Polkadot, AION and Panta. So, to attract people, the network needs to make fast-paced advancements.
The Future of Cosmos Crypto and the ATOM Crypto Token
In simple terms, the future of Cosmos seems uncertain, mainly due to the extreme volatility in the crypto market. Additionally, various other businesses are trying to attempt a similar business model. This increases competition for the network.
However, the founders of Cosmos believe that the business will be able to pick pace in the coming times.
Having said that, this protocol has made several tweaks in recent times. It brings frequent updates and upgrades in its system, which is commendable. If it keeps on following this path, the future of Cosmos looks bright.
Final Word
Cosmos crypto is typically a protocol that attempts to bring together several blockchains under a single roof. By being mindful of your investment, you can generate substantial passive income through its native token, ATOM.
FAQs
Ans. Whether ATOM is a good investment or not depends on your personal goals and risk appetite. However, note that all cryptocurrencies come with a certain amount of risk. Thus, ensure to conduct your own research before making the decision to invest.
Ans. You can trade ATOM and earn substantial rewards if you can correctly speculate on the crypto’s price. Moreover, you can also stake the crypto to earn incentives from the network. These rewards are similar to crypto dividends, which offer more cryptocurrencies to users proportionately to the amount of crypto they stake.
Ans. Tendermint allows developers to build blockchain easily on the Cosmos network. The Tendermint Core, which is a key part of the system, keeps all computers in the network in sync. It also provides validation for transactions and secures the network.
Ans. Jae Kwon came up with the idea of Cosmos in 2014. He later teamed up with Ethan Buchman in 2015 to make a software development kit. After this, they created the Cosmos whitepaper in 2016. This project was then called Gnuclear, which was renamed to Cosmos in August the same year.
Ans. As of July 2022, the Cosmos cryptocurrency features a market cap of $2.76 billion. It is the 25th top cryptocurrency globally in terms of market capitalisation. The network features its native coin ATOM, which features a market dominance of 0.27%.
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Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.
Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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