Cosmos (ATOM) is a layer 1 blockchain solution designed to compete for market share with Ethereum.
As the industry matures, the biggest issue facing almost all blockchains is their ability to scale.
We especially see this on layer 1 blockchains such as Ethereum, when increased network demand puts pressure on fees and transaction speeds.
If you’ve used tried to use the Ethereum network during a period of such demand such as the height of the Crypto Kitties craze, you’ll know how painful it can be.
While Ethereum already has a number of layer 2 blockchain solutions such as Polygon, questions around this Ethereum light style project truly has the ability to penetrate the market.
So back we circle to layer 1 blockchains that can truly and potentially one day replace Ethereum as the best layer 1 blockchain solution available.
Cosmos is one such example of a layer 1 blockchain that has thrown its hat in the ring and this section of our Cosmos (ATOM) guide will help make its case.
First came layer 2 solutions
The rapid adoption of DeFi, NFT and gaming applications on Ethereum continues to cause bottlenecks on the network.
By design, Ethereum’s solution is to push network fees through the roof, thus rendering the chain almost useless for anyone other than mega whales.
They don’t call Ethereum a playground for the rich, for nothing.
Not so long ago, layer-2 solutions such as Polygon were all the rage.
Moving Ethereum based dApps to Polygon for example, allow users to escape the issue of high fees on Ethereum, but still remain within the overall Ethereum ecosystem.
However, that right there is the issue.
Polygon users are never going to truly jump ship from Ethereum and the network will forever be viewed as nothing more than a temporary solution until Ethereum sorts itself out.
Ethereum’s shift to Proof of Stake (PoS) uses sharding to try and provide the chain a scalability solution on its own layer 1.
Sharding allows the network to work on transactions in parallel rather than sequentially.
With the idea that network speed and efficiency will improve.
But Ethereum’s sheer size has meant the transition won’t solve these problems overnight and with hardware and staking requirements increasing have opened up a new set of questions around decentralisation.
The aura surrounding Ethereum remains for now, but Ethereum compatible, competing layer 1 networks such as Cosmos, have now well and truly arrived.
Now layer 1 solutions like Cosmos are back in vogue
It’s time for Ethereum compatible layer 1 blockchains such as Cosmos to take their rightful place at the head of the table.
By bringing interoperable bridges to Ethereum, while most importantly offering the ability to scale in their own right, could the future in fact be layer 1?
Currently, the leading Ethereum compatible, layer 1 blockchains include:
- Cosmos (ATOM)
- Polkadot (DOT)
- Avalanche (AVAX)
Each with their own network of blockchains and dApps that do everything Ethereum does, both faster and cheaper.
In saying that however, these particular layer 1 solutions such as Cosmos, do bring their own set of issues.
Namely surrounding a lack of decentralisation and the security risks that are opened up at scale.
We haven’t even included other the popular layer 1 blockchains Solana and Binance Smart Chain, simply because they may as well be inefficient databases.
They’re certainly not decentralised enough to compete with Ethereum when mass adoption takes hold.
Cosmos is layer 1, but will that be enough?
So the final question that remains is will Cosmos (ATOM)’s position as a layer 1 blockchain be enough to truly compete with Ethereum long term?
The biggest downside of layer 1 blockchains like Cosmos is decentralisation because when push comes to shove, being truly untouchable is all that will matter.
Achieved by a vast token distribution and a network of unconnected validators, across numerous jurisdictions.
This guide to Cosmos (ATOM) has shown the chain has all the technical hallmarks to compete with Ethereum.
But ultimately, it will be up to the market to decide which layer 1 solution reigns supreme.
Best of probabilities to you.
Direct from the desk of Dane Williams.
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This Cosmos (ATOM) blog is exclusive to leofinance.io.