Analysis of Cosmos: Consensus Mechanism, SDK Capabilities, and IBC Protocol
Cosmos Hub aims to generate thousands of interconnected blockchain systems built on the Cosmos network.Source: cryptopedia
Compiled by: Hu Tao, Chain Catcher
Cosmos Hub is a blockchain protocol built on the Cosmos network that allows an increasing number of blockchains to communicate with each other. Its functionality is very similar to how you share files on a computer that can be opened on any operating system. While Cosmos is designed to support multiple tokens, the native cryptocurrency of Cosmos is ATOM, which is the driving force behind Cosmos Hub. ATOM provides several functions:
Maintaining network consensus
Staking through incentive-based validator nodes
Reducing spam as a medium for paying gas fees
Providing a voting mechanism to propose network amendments through Cosmos governance proposals
Cosmos Hub is built by the Tendermint core team, which is the main organization responsible for designing and contributing to the Cosmos network. They play a key role in building critical network infrastructure such as Cosmos Hub, Cosmos SDK, and Tendermint Core—providing state-of-the-art tools to help realize the full potential of the Cosmos network. The Tendermint team has built Cosmos Hub as an interoperable blockchain platform that allows the protocol to connect with independent blockchains within the Cosmos network (called zones).
This article will mainly discuss three key aspects of the Cosmos network:
Tendermint Core Byzantine Fault Tolerance (BFT) consensus method: A language-agnostic consensus algorithm designed by the Tendermint team for state machine replication to replicate other blockchain networks built in the Cosmos network.
Inter-Blockchain Communication Protocol (IBC): Designed by the Tendermint team as an interoperable communication layer between different blockchain networks.
Cosmos Software Development Kit (SDK): An open-source, extensible infrastructure aimed at building multi-asset Proof of Authority (PoA) and PoS blockchain platforms within the Cosmos network.
Tendermint Core BFT Consensus
Typically, Proof of Work (PoW) blockchain protocols are slow and costly, with significant scalability challenges and high energy consumption. The Tendermint BFT consensus mechanism addresses these issues by utilizing a consensus based on Proof of Stake (PoS) for faster transaction times in the network.
Tendermint is the underlying consensus algorithm of the Cosmos network, built as a high-performance BFT State Machine Replication (SMR) platform that can replicate services, which can then be simulated as deterministic, non-random state machines. Essentially, this means that the creation of Tendermint Core is intended to replicate dedicated servers (or states). This is achieved through a special machine that replicates the servers and propagates them across the global Cosmos network. This process allows software engineers from Tendermint Core to replicate blockchains on state machines around the world.
The significant technical capabilities of Tendermint allow developers to create their own blockchain platforms without having to build everything from scratch. This is helpful as it enables users to create any type of blockchain system they want—almost everything has been done for them except for their application logic and tokens. Tokens hosted on the Cosmos network include: Kava (KAVA), Terra (LUNA), Band Protocol (BAND), Aragon (ANT), and Akash Network (AKASH), among others.
The Cosmos ATOM coin also plays a crucial role in the functionality of the Tendermint Core BFT consensus mechanism, as Cosmos Hub is a Proof of Stake blockchain platform. Cosmos relies on a network of 100 validator nodes to maintain consensus, security, and operational efficiency. To keep the system running, users must stake their ATOM coins.
The role of validators is to run a full node—verifying the network rules—and broadcasting votes to the network, subsequently submitting new blocks to the blockchain. In return, validators earn income in the form of ATOM based on the amount of ATOM staked as collateral.
Finally, ATOM is used as a spam prevention mechanism, with transaction fees that can deter a large number of spam transactions. The Cosmos coin also serves as a governance voting mechanism for proposals that influence the direction of the Cosmos network. Participants in the Cosmos network have the opportunity to vote according to their ATOM holdings.
Inter-Blockchain Communication (IBC) Protocol
The Cosmos IBC protocol aims to address one of the most significant challenges facing today's blockchain systems: the lack of communication and data sharing between networks.
Interoperability and the ability to communicate with external and internal blockchain protocols are crucial for the widespread application and technological adoption of blockchain and cryptocurrency in the real world. Imagine a telephone network that can only communicate with participants within its direct geographical area. It simply wouldn't work. Cosmos IBC is a messaging protocol similar to TCP/IP, designed to share information and data, ultimately enabling communication between multiple blockchains.
Capabilities of Cosmos SDK
Cosmos SDK is an extensible open-source infrastructure designed to build multi-asset public PoS blockchain platforms, such as Cosmos Hub, as well as permissioned Proof of Authority (PoA) blockchains. Ease of use is a key attribute sought by software engineers to build interoperable, application-specific blockchains in a timely manner. Cosmos SDK is a modular framework designed to build application-specific blockchains rather than VM-based applications.
Virtual Machine (VM) blockchains like Ethereum are created to host application development as a set of smart contracts on top of existing blockchains. Smart contracts may be beneficial for specific use cases, such as one-off applications. However, they are often ineffective for the development of complex, decentralized platforms.
Generally, the versatility, sovereignty, and technical performance of smart contract technology are limited. Cosmos supports application-specific blockchains designed to run a single application and allows engineers the freedom to make structural design modifications necessary for the optimal operation of their applications.
Cosmos SDK not only allows developers to use pre-built modules but also enables them to use their own custom modules, allowing them to test their minimum viable product before launching their own public mainnet (a blockchain protocol that has completed testing and is ready for public use). Additionally, Cosmos SDK allows users to connect their own blockchains to the Cosmos network via IBC, increasing liquidity and user adoption rates. Cosmos SDK has also been used to build many key blockchain and cryptocurrency projects, such as Binance DEX, Kava, Terra, and IRISNet.
An Interoperable Blockchain World
The Tendermint BFT consensus mechanism, IBC Protocol, and Cosmos SDK are all designed to simplify how software engineers build their own blockchain protocols as part of the Cosmos network. Many leading blockchain enterprises have created the core of the Cosmos Network by utilizing its flexible and interoperable framework.
Cosmos Hub itself is an extremely powerful decentralized blockchain network, whose structure and governance allow network participants to remain calm—with ATOM coins serving as a staking mechanism that promotes security, consensus, and operational efficiency. The Cosmos network helps address many underlying interoperability challenges that impose fundamental limitations on today's blockchain technology.
