The Internet of Blockchains Is Now Live on Cosmos
For Cosmos, the vision of an Internet of Blockchains is finally coming to life as IBC protocol goes live.
- In January, the Cosmos team introduced Stargate, an update that enabled the final transition towards the vision of "Internet of Blockchains" laid out in the whitepaper.
- Inter-Blockchain communication (IBC) allows blockchains in the Cosmos ecosystem to exchange data and tokens with each other.
- The team today performed a live demo of IBC powered token transfers among different Cosmos blockchains.
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After five years of research and development, the industry’s first cross-chain technology, Inter-Blockchain Communication (IBC), is being rolled out onto the Cosmos Hub.
Internet of Blockchains Comes to Life
IBC has officially launched. The initial version of IBC allows users to kick off token transfers between various chains on the Cosmos Hub. This will be an unprecedented event as, for the first time, a project will have achieved true cross-chain token transfers.
With IBC going live, many Cosmos-based blockchains will be able to immediately share resources and user engagement instead of building everything from scratch. For example, a DeFi project such as Kava on the Cosmos Hub can access liquidity from a stable coin project (also on the Hub) such as Terra.
Inter-Blockchain communication (IBC) will be integrated on top of the Cosmos Hub, the central blockchain that connects all other Cosmos blockchains (known as Zones).
Each Zone within Cosmos plugged into the Hub will depend on IBC to send tokens and data with each other securely. This feature opens the door to interoperability of data and assets across dApps.
Monday will be the first time *ever* that tokens native to other blockchains will be sent permissionlessly to the Cosmos Hub.
— Peng Zhong (@zcpeng) March 26, 2021
A $50 Billion Blockchain Ecosystem
When it comes to Zones, they can host a separate token and an independent governance mechanism. This means that Zones do not have to depend on the same validators as the Cosmos Hub, and there is no minimum number of validators. In fact, one would only need a single independent validator to start a Zone.
According to experts, because individual Zones depend on independent validators, it is a more complex issue to ensure robust security in each Zone. “As more money flows into the Cosmos world, the security of individual Zones will be tested,” Kent Barton, the head of research and Development at ShapeShift, wrote in a research report.
To enhance security in the Zones, Cosmos plans to implement Hub validators to secure Zones by staking ATOMs, a concept called cross-chain validation.
Spinning a New Chain With Cosmos SDK
Centered on scalability and ease of use, Cosmos provides all the tools and environments needed to create customized blockchains.
Developers can use the Cosmos software development kit (SDK), described as developer-friendly by the team, to spin up a new blockchain with a few commands and minimal network fees. More importantly, the Cosmos SDK offers developers a door to the entire Cosmos ecosystem.
There is no upper limit on how many blockchains or zones can be added to the ecosystem, unlike sharding protocols like Polkadot, where there is a fixed number of blockchain shards (i.e., 100 parachains).
“When you zoom out and look at the current state of the ecosystem, it’s remarkable that projects like Terra and Thorchain have enjoyed so much early success even without IBC! Once cross-chain liquidity, data-sharing, and “money lego” interoperability are unlocked, Cosmos will be well-positioned to realize its grand vision,” Kent Barton wrote.
The core development team also has other features planned in the coming months, such as staking bridge with Ethereum and Bitcoin, ATOM staking derivatives, a blockchain naming system, and an NFT marketplace.
All of these features and dApps will inevitably create more activity on the Cosmos Hub, which in turn, will generate more fees distributed to validators and delegators who have staked their ATOM tokens.
Disclosure: The author did not hold the cryptocurrency mentioned in this article at the time of press.