Erik Weijers, a year ago

Cosmos, the internet of blockchains

The universe of Blockchains is still quite compartmentalized. The project which solves the problem of communication between these silos - the interoperability problem - awaits a hefty reward. Cosmos is one of the projects with good prospects. It is a network of independent blockchains that can still communicate. These can be blockchains built on Cosmos but also external blockchains like Bitcoin.

In short, Cosmos aims to become the internet of blockchains. In the vision of the founders, there could be thousands, even millions of these in the future. The problem with a universe with so many blockchains is that they are only really useful if they can communicate. Compare it to the invention of wifi: the usefulness of internet at home becomes much greater if all your devices can communicate via wifi.

The value of a world of connected blockchains is potentially huge. Indeed, according to Metcalfe's law, the value of a communication network increases exponentially with the number of nodes in the network.


At the time of writing (January 2022), there are 28 blockchains connected to the Cosmos ecosystem, including big names like Terra. The first blockchain to go live in the network (2019) was Cosmos Hub, whose currency is ATOM. ATOM is used for transaction fees, staking and for voting rights in Cosmos governance.

There are currently over 250 applications running on Cosmos (check out the current number). Think payment apps, smart contracts and decentralized marketplaces (dexes).

Cosmos as a response to Ethereum’s problems

Ethereum made it easy to build decentralized applications. In a similar way, Cosmos makes it easy to build blockchains. In doing so, it solves some of the problems that everyone in the Ethereum ecosystem faces. Namely, everything on Ethereum must be done on one blockchain, which leads to congestion of transactions. This centralization also gives application developers less flexibility in, for example, choosing programming languages. It also makes developers very dependent on Ethereum, for example if they need new functionality in the EVM (Ethereum Virtual Machine). For that, they have to turn to the Ethereum community.

Cosmos is trying to solve this problem - a problem that, by the way, is not unique to Ethereum but faces every blockchain. In the Cosmos ecosystem it is made very easy for developers to create blockchains and link them to Cosmos. In doing so, those blockchains do retain their independence.

Three tools

The way Cosmos helps developers build quickly is by keeping the three tools in their toolbox nicely separated. In doing so, one tool helps the other.

Cosmos' first tool is Tendermint BFT: the engine of the networking and consensus mechanisms needed for a working blockchain. Tendermint is thus a platform on which developers can build new blockchains. Blockchain programmer Jae Kwon laid the foundation for Tendermint back in 2014. The goal is to reduce the development time of a blockchain from years to weeks.

The second tool is the Software Development Kit (SDK): in that tool, multiple common programming languages are translated into a language understood by Cosmos. Through this kit, developers can quickly build application-specific blockchains on Tendermint.

The third tool is Inter Blockchain Communication Protocol (IBC). This is a protocol that is to blockchains what TCP/IP is to the internet. The protocol allows different blockchains to exchange information and value (coins).

Comparison with Polkadot

Polkadot has a similar ambition to Cosmos. An important difference is that with Polkadot a maximum of 100 blockchains can 'hook up'. With Cosmos, that number is unlimited, making scalability better. At the time of writing (January 2022), the market value of Cosmos is less than half that of Polkadot and the number of active users is relatively higher.

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