Cosmos is a project with an ambitious mission: To create a network of distributed ledgers that will solve long-standing problems in the cryptocurrency and blockchain communities.
The Cosmos network consists of many independent, parallel blockchains, called zones, each powered by classical Byzantine fault-tolerant (BFT) consensus protocols like Tendermint (already used by platforms like ErisDB). Some zones act as hubs with respect to other zones, allowing many zones to interoperate through a shared hub. The architecture is a more general application of the Bitcoin sidechains concept, using classic BFT and Proof-of-Stake algorithms, instead of Proof-of-Work.
The first blockchain in the Cosmos network is the Cosmos hub. The Cosmos hub connects to zones via the novel IBC (inter-blockchain communication) protocol and keeps a record of the total number of tokens in each zone. Because all inter-zone token transfers go through the Cosmos hub, you can transfer tokens from one zone to another, quickly and securely, without the need for a liquid exchange or a trusted third party between zones.
The Cosmos hub can connect to many different kinds of zones, as long as each zone speaks IBC. As a result, Cosmos can support a variety of currencies and scripting languages like those found in Bitcoin, Ethereum, ZeroCash, CryptoNote, and more.
One of the great tragedies of cryptocurrencies today has been their failure to interoperate with existing systems — and each other. Cosmos offers a way to link them together, but without creating a new centralized clearinghouse or exchange.
Cosmos is built on principles of cryptography, sound economics, consensus theory, transparency, and accountability to serve as a new foundation for our future financial systems.
You can use Cosmos as a testing ground for a new cryptocurrency design, an upgrade to an existing cryptocurrency, as a means for decentralized exchange, or as a platform for scalable smart contracts.
Cosmos is not just a single distributed ledger, and the Cosmos hub isn’t a walled garden or the center of its universe — anyone can use this protocol to create their own hub to compete with Cosmos in a free market of blockchains