Cosmos Brings Interoperability To Blockchains
Following the success of its recent fundraiser (during which it raised $16.8 million in BTC and ETH in just 28 minutes), The Cosmos Network seems poised to deliver on its mission to facilitate interoperability amongst separate blockchains.
At present, the blockchain ecosystem is ironically behaving much like the siloed and centralized databases they were designed to uproot. The problem is that blockchains cannot effectively communicate with one another.
Take the following example: Let's say you wanted to send ERC-20 tokens from the Ethereum blockchain over to the Bitcoin blockchain. First, you would need to send those ERC-20 tokens to a centralized exchange and then convert them into Bitcoins for use in the Bitcoin blockchain. This process is time-consuming, technically challenging, and exposes token holders to security risks along the way (because exchanges are vulnerable to attackers).
Interoperability between separate blockchains would be a big deal. In fact, the creation of the Cosmos Network could ignite a protocol war similar to the one that took place during the 1980's, when several protocols (OSI, SNA, and DECNET) competed against one another to create a universal network of computers. The winner of that war, by the way, turned out to be none of the above mentioned. It was a loosely tethered community of volunteers whose protocol was known simply as ‘the Internet.’
If a similar meritocratic competition for protocol supremacy were to happen in the blockchain space, the results could be anyone’s guess. Again, we can look to the Internet as a prime example of how technology can evolve over time around a unifying set of universally accepted protocols to go places nobody could have imagined at inception.
Cosmos is being built by the same team who created Tendermint - a Proof-of-Stake "blockchain consensus engine and a generic application interface" which allows developers to deploy "state machine replication of applications written in whatever programming language and development environment is right for them."
Although the initial iteration of the Cosmos Hub (which is itself a blockchain) will be used for the facilitation of token transferability from one blockchain to another, it's possible that future iterations will allow for executable distributed code contracts to call one another across a multitude of blockchains as well. There are also plans to build an adapter zone, which will bridge the Ethereum and Bitcoin blockchains and even further plans to build a distributed exchange. All of which will be a part of the Cosmos Network, acting as a decentralized focal point for many other blockchains to connect to one another.
If executed correctly, the Internet of Blockchains, as Cosmos is being dubbed, could foster a whole new environment for blockchain compatibility and overall network effect at the protocol level. The implications at the application layer of such an event are presently left only to the imagination.