Cosmos Crypto is a blockchain, developed by a Swiss nonprofit, with the goal of connecting multiple blockchains with each other. The ATOM coin powers the proof-of-stake blockchain underlying Cosmos Crypto.
What is Cosmos Crypto?
Cosmos is a protocol that supports something called “blockchain interoperability,” which makes it possible for different blockchains to communicate with each other. Cosmos aims to link up many crypto networks with open-source tools that allow for cross-chain transactions.
Unlike many other types of cryptocurrency, Cosmos and the Cosmos cryptocurrency (ATOM) exist to serve other networks to create a scalable, decentralized blockchain web.
What Is ATOM Coin?
The ATOM cryptocurrency powers the Cosmos Hub proof-of-stake blockchain. This token is the Cosmos coin and an important part of blockchain interoperability on the Cosmos network. Users can earn ATOM tokens via a hybrid proof-of-stake algorithm and help to secure the Cosmos Hub. The ATOM cryptocurrency also plays a role in governance for the network.
Cosmos compares its ATOM tokens to the ASIC machines used to mine Bitcoin. A technical paper written by the Tendermint team once described the ATOM crypto as a piece of virtualized hardware that people need to obtain to be able to participate in the Cosmos network.
Recommended: How Many Bitcoins Are Left?
ATOM Coin Price
At the time of writing, ATOM was the 39th-largest crypto by market cap, with a price of $12.08 per coin. The cryptocurrency appreciated by roughly 110% year-to-date, having begun 2021 around $6.00. It reached an all-time high on May 7, 2021, at $32.14. The all-time low was $1.13, recorded on March 13, 2020.
History of Cosmos (ATOM) Crypto
The history of Cosmos goes back to 2014 when developers Ethan Buchman and Jae Kwon created Tendermint, the consensus algorithm that serves as the backbone to the Cosmos network. In 2016, Buchman and Kwon published the Cosmos whitepaper. That same year, the first token sale for ATOM occurred.
A Swiss non-profit organization called The Interchain Foundation (ICF) helped launch and develop Cosmos, which founders have referred to as “the internet of blockchains.” In 2017, the organization hosted an initial coin offering (ICO) for the ATOM token, raising more than $17 million. Tendermint Inc. raised $9 million in 2019 to continue developing the project.
How Does the Cosmos Network Work?
A proof-of-stake consensus algorithm secures the Cosmos network. Validator nodes stake a certain amount of ATOM tokens, with those staking the most having the highest odds of being chosen to verify transactions and earn rewards. Dishonest nodes get penalized and lose the tokens they staked.
Cosmos works to create a collaborative ecosystem of different blockchains that can share data and tokens in a decentralized way, independent of any third-party. New blockchains can be tethered to the Cosmos Hub, where they can communicate with other blockchains that are also connected to the Hub.
The Cosmos network has three layers, tied together by a set of open-source tools that allow developers to build blockchain applications.
• The application layer works to process transactions and update the state of the network.
• The networking layer allows for communication across blockchains.
• In the consensus layer, nodes agree on the current state of the system.
The application layer works to process transactions and update the state of the network. The networking layer allows for communication across blockchains. And the consensus layer is where nodes agree on the current state of the ATOM DeFi system.
The most fundamental part of the Cosmos network is Tendermint, which gives developers the ability to easily build blockchains. Tendermint Byzantine Fault Tolerance (BFT) is an algorithm used by computers that run the Cosmos software to commit blocks to the blockchain, validate transactions, and secure the network.
A key part of Tendermint is Tendermint Core, a proof-of-stake governance mechanism that keeps all the computers that run the Cosmos Hub in sync. As mentioned in the section on Cosmos crypto, validator nodes have to stake ATOM to power the blockchain. Being a validator requires a node to be in the top 100 nodes that are currently staking ATOM. Nodes receive voting power in proportion to the amount of ATOM staked.
The first blockchain to launch on the Cosmos Network was the Cosmos Hub. The hub functions as a gateway through which all the different blockchains created within the network could function. The different blockchains are referred to as “zones.”
Within Cosmos, each zone can perform independent functions. That means everything from authenticating transactions and accounts to creating and distributing new tokens and more. The Cosmos Hub lets all the blockchains work together by keeping track of their states.
What Can You Use ATOM for?
Developers need ATOM to be able to participate in the network and vote on proposed changes. Traders can trade crypto like ATOM to speculate on the price, trying to buy low and sell at a higher price later. Investors can also stake their ATOM crypto to earn rewards. Staking rewards are like “crypto dividends” in that users can be regularly rewarded with more cryptocurrency in proportion to the value of the crypto they stake.
How to Invest in Cosmos ATOM Cryptocurrency
Cosmos crypto (ATOM) trades on many popular exchanges like Coinbase, Crypto.com, CEX.io, and Kucoin. Assuming an investors has already familiarized themselves with all the investing in crypto basics, all it takes is a few simple steps to begin buying ATOM.
Step 1: Open an Account
To buy ATOM, you need an account with an exchange or another platform, such as SoFi Invest brokerage platform, that allows you to purchase crypto. Make sure the exchange provides trading for the ATOM cryptocurrency. ATOM trades on many popular exchanges like Binance, Huobi Global, and Gate.io.
Step 2: Make a Deposit
After creating an account, you can then deposit either some bitcoin, dollars, or a stablecoin, depending on what trading pairs the exchange has available.
Step 3: Execute the Trade
Simply select the trading pair that includes ATOM and the currency deposited during step number two. For example, if you have bitcoin and want to buy ATOM, you would select the pair called “BTC/ATOM.” If you had dollars, it might be “USD/ATOM.” For a stablecoin like USDT, it might be “USDT/ATOM.” Enter a buy order for the desired amount of coins at a desired price.
Alternatively, on exchanges that include order books in the user interface (like Binance), simply select the sell order at the top of the book and buy from it. As an alternative, you could use a decentralized exchange (DEX) to buy ATOM. While the same crypto regulations apply, registering with a DEX is typically faster and involves less identifying information.
Step 4: Store Your Crypto
After buying ATOM tokens, you may want to consider moving your crypto off of an exchange and into a hardware wallet that supports ATOM. Using this kind of crypto wallet provides extra security, as you can take the coins offline and put them into cold storage where they are inaccessible to hackers.
Is ATOM a Good Investment?
It depends on many factors, and is a personal decision. It’s still a relatively new cryptocurrency, and all cryptocurrency investment involves risk. That said, the more blockchains that connect to the Cosmos network, the more valuable ATOM coin could become, in theory. However, such growth could take a long time, so investors may need to prepare to HODL.
Cosmos Crypto is a protocol that aims to integrate multiple blockchains, allowing holders of different cryptocurrencies more options for using their crypto. The ATOM coin is the cryptocurrency that powers the Cosmos network.
If you’d prefer to invest in ATOM without opening an account on an exchange, you can open a crypto trading account on the SoFi Invest platform. It allows you to build your own portfolio including 21 different types of crypto, as well as stocks and exchange-traded funds.
Photo credit: iStock/Drazen_
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments.