Cosmos cryptocurrency (ATOM)

If you want to invest in Cosmos in New Zealand, it's worth knowing more about the coin.

Cosmos is a project that is working to develop an interactive ecosystem of parallel independent blockchains. In other words, Cosmos aims to allow various blockchains to interact with one another and so create an 'Internet of Blockchains'. 

It is this focus on interoperability (blockchain interoperability) that sets Cosmos apart from other projects. For example, the project's developers are not just developing blockchain, but creating an entire ecosystem for the operation of various networks in which data and digital assets can be exchanged without a centralised intermediary. At the same time, Cosmos users can create independent blockchains. For this purpose, the project team has developed special tools that enable the creation of their own blockchain networks. Each individual blockchain is managed independently, but can communicate with other blockchains in the network. There are two types of blockchains in Cosmos: Zones and Hubs: Zones are regular blockchains Hubs are blockchains that connect zones to each other Cosmos Hub was the first blockchain (and hub) to be launched in the Cosmos ecosystem. It is a public blockchain based on the Proof-of-Stake (PoS) consensus algorithm: it has no mining and new coins are mined by validators through stacking. Each new independent blockchain created in Cosmos is linked to Cosmos Hub. Once a blockchain zone connects to Cosmos Hub, it begins communicating with all other zones connected to the hub. This allows blockchains to exchange data with other networks, applications and validators. 

What is Cosmos?
What is Cosmos?

Features of Cosmos Cryptocurrency

The Cosmos project is a decentralised ecosystem of autonomous, parallel blockchains. Each blockchain has its own settings and parameters. The blockchains can have different consensus algorithms based on the BFT consensus algorithm, a Byzantine consensus for sustainability that solves the problem of achieving trust in an environment where no one trusts anyone. 

A special feature of the platform is the ability to make payments not only within a blockchain, as all cryptocurrencies do, but also between blockchains. 

At the moment, direct payments between blockchains are only being tested. The number of blockchains between which direct payments can be made is mostly limited by the consensus used in cryptocurrency mining. The Cosmos project offers technology that enables direct payments between blockchains of different cryptocurrencies without the involvement of exchanges. Thus, Cosmos itself is a decentralised exchange platform. Cosmos enables interaction between blockchains within a single ecosystem. The technology used not only enables payments between blockchains, but also the exchange of any information and content between the various blockchains within the platform. 

Cosmos peg zone
Cosmos peg zone

What problems does the Cosmos platform solve?

In today's world, blockchain technology is evolving. Thanks to blockchain, it has become possible to create various projects and decentralized applications on them. The number of cryptocurrencies is constantly growing. The increasing number of cryptocurrencies and tokens creates a problem of exchange between them. There are a huge number of exchanges. However, most decentralized exchanges suffer from a lack of liquidity and the ability to work with a limited number of tokens, for example, decentralized exchanges can only support tokens on the Ethereum blockchain. Centralized exchanges have big problems with security and regulation by government authorities. At any time, the accounts of exchanges and traders can be frozen by regulators, and centralized exchanges themselves can be shut down by government authorities. Decentralized exchanges, unlike the centralized ones, cannot be closed. But the more cryptocurrencies appear in the world, the more exchange problems they have. It turns out that a coin or token can only circulate within the project platform, and when it comes to exchanges there are problems with liquidity. The point is that in all cryptocurrencies, payments and exchanges can only be made within a blockchain. Different blockchains cannot communicate with each other. Each blockchain is a closed ecosystem that cannot communicate with other similar systems. The only means of interaction are exchanges. But exchanges only allow you to exchange cryptocurrencies and tokens with each other. Blockchains can be used in a much broader way than just to make payments. Any kind of information can be stored on a blockchain and a huge variety of transactions can be recorded. Interaction between blockchains is needed first and foremost to exchange the information that is stored on each of these blockchains. The data exchange must be secure and not affect the integrity of each blockchain in any way, so as not to break the blockchain and ensure the safety and integrity of the information being transmitted. 

The Cosmos project plans to become a "blockchain internet. Just as the TCP/IP protocol suite ensures the interoperability of internets, Cosmos has developed mechanisms that will allow different blockchains within the Cosmos ecosystem to interact.

Cosmos ecosystem
Cosmos ecosystem

History of the Cosmos project and key stages of development

In 2014, Tendermint Inc. was created. Based on the study of Byzantine Fault Tolerance (BFT) consensus capabilities, the Tendermint consensus algorithm was created, which is a hybrid of the PoS algorithm using BFT principles. In 2015, the ability to connect the Tendermint kernel to applications written in any language through the Application Blockchain Interface (ABCI) was developed. This made it possible to create independent blockchains using any programming languages, as well as basic modules. In 2016, the Interchain Foundation (ICF) was created to develop the Cosmos ecosystem. An agreement was signed with Tendermint Inc. for interaction and further cooperation in the implementation of the Cosmos project. In 2017, $16.8 million was raised in 30 minutes of token sales to bring Cosmos ideas to fruition. 2017 was characterized by large fundraising amounts during ICOs, so the amount of funds raised is not unusual or uncommon. In this case, the timing of the ICO is much more impressive. The first prototype Cosmos SDK was launched. In 2018, the concept of Inter-Blockchain Communication (IBC) was developed, which is a mechanism for transferring data between blockchains within the Cosmos ecosystem. Development of the specification is beginning. More than 20 public test networks have been launched. In 2019, the world's largest cryptocurrency exchange Binance announces Binance Chain, which is built on the Tendermint Core and Cosmos SDK technologies.

Cosmos network
Cosmos network

How to buy Cosmos (ATOM) in New Zealand?

You can buy ATOM on an exchange or from a broker. Let's understand how a cryptocurrency broker and an exchange are fundamentally different. 

What is the difference between a broker and a cryptocurrency exchange?

Broker facilities are suitable for cryptocurrency trading. There are multiple reasons for this, include security and high liquidity. After you deposit funds, you are offered a variety of trading options, depending on the broker you turn.

Invest in Cosmos in New Zealand through online trading platform
Invest in Cosmos in New Zealand through online trading platform

On the other hand, the exchange offers a more simple procedure using the order stack of the trading pair associated with the deposited asset, be it cryptocurrency or fiat. In this way, the exchange brings between buyers and sellers, for which it charges a service fee.

It is important to note that in spot trading, the exchange makes a physical delivery of the exchanged asset, while in the event of margin trading with a broker, the underlying asset is traded without any physical delivery.

The difference difference between an exchange and a broker can also be seen in the target audience. The services of cryptocurrency exchanges are mostly used by hodlers who are interested in long-term or medium-term investments. Such clients, for example, buy a particular cryptocurrency and wait for its value to increase, or simply buy certain digital coins in order to then transfer them for safekeeping to their hardware wallet.

Brokers are typically approached by speculative investments who take advantage of services provided by brokers, such as margin trading. They perform various types of transactions with the possibility of using available technical analysis tools. Such clients seek short- or medium-term profits, and a broker acts as an intermediary to help them obtain them.

Brokers provide additional tools for margin trading, such as Contract for Difference, or CFD. 

Brokerage platforms also offer traders a variety of special tools to assist users in the trading process. They include technical analysis tools, such as various indicators, moving averages and so on. All of them are aimed at managing risks and improving trading results. 

Buy Cosmos in New Zealand via online trading platform
Buy Cosmos in New Zealand via online trading platform

Registration and Verification Process

Each exchange has its own registration procedure. Some exchangers only need to provide an active email address, which must then be confirmed and a password set that's the end of the registration process. Other platforms, particularly those that work with fiat, require verification. The customer may be invited to a video call, asked to take a picture with his identification document, scan this document or undergo the KYC procedure (Know Your Customer). KYC procedure is especially used when a trader is going to use high limits for deposit and withdrawal of his funds.

As with cryptocurrency exchanges, many brokers also offer uncomplicated registration methods. But verification is also very important for brokers because they are subject to regulation. In most cases, their representatives will ask for identification and some kind of proof of home address, such as an electric bill or rent.

The verification process itself usually takes less time than on an exchange. As soon as the account is verified, the trader can deposit funds and start trading.

Verification Process
Verification Process

Deposits and Withdrawals

The cryptocurrency exchange offers two options for deposits and withdrawals. The first option is depositing with fiat money, and there are a few nuances here. Firstly, many exchanges simply do not accept fiat. Secondly, the exchanger may charge a large commission for depositing fiat currency. Usually commissions are charged for depositing fiat currency through a bank account, as well as for using a debit or credit card. The same applies to withdrawal of funds. And in this case commission can be even higher than that for depositing. If the customer decides to do so, they are usually advised to make sure that the receiving bank accepts transfers from cryptocurrency exchanges in order to avoid unpleasant surprises.

Commissions can be much lower if you deposit and withdraw cryptocurrency funds. 

Most exchanges don't charge commissions at all for deposits, only for withdrawals.

There are clear advantages for customers here when using a cryptocurrency broker. Brokers offer more options for depositing money: bank account, debit card, credit card, different types of electronic payment systems, as well as cryptocurrencies. In this case, the commission for depositing funds, as a rule, is not charged.

In addition, traders do not have to pay high commissions when withdrawing funds from the brokerage account. They typically range from 0% to 3%, while some cryptocurrency exchanges charge 6% for withdrawals!

Brokers offer many options for depositing money
Brokers offer many options for depositing money


What are the similarities and differences of a cryptocurrency broker and an exchange when we speak about them as sources of revenue? 

Because both the exchange and the broker profit from trading charges.

Cryptocurrency exchanges appeal to traders with a variety of trading pairs for whom they have a rather high spread due to the liquidity of the relatively low market depth They usually charge higher commissions for trades, withdrawals and even sometimes for depositing funds.

The broker, for his side, offers lower withdrawal and trading commissions, but here they trade large sums, so the total profit from commissions can be the same as in the exchanges.

Conclusion: buy Cosmos from a broker or on the stock exchange?

To summarize, there is no one-size-fits-all answer to the question "Cryptocurrency broker or cryptocurrency exchange?" Each of these options may suit a certain type of client depending on their trading goals.

The choice of investment option depends on your goals
The choice of investment option depends on your goals

If a trader has large sums of money available, it is better to use the services of cryptocurrency brokers. They are regulated and audited, and all of their funds are kept in bank accounts. Even if the broker gets hacked, clients will be able to get compensation. The broker also offers professional traders to use additional tools, such as technical analysis and the ability to use automated trading strategies.

Brokers are also worth approaching for those clients who engage in short-term and medium-term margin trading in order to benefit from fluctuations.

The financial services provided by this website carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose