Cosmos

Cosmos fundamentally believes that it’s impossible to get everyone to agree on a single set of rules to govern a world-wide economic network. This is already evident in the real world where you see multiple forks of Bitcoin being created because of philosophical and political disagreement. On the other hand, in Ethereum’s case, we’re seeing that stakeholders can’t agree on the right form of governance or have a tendency to resist formal governance, which can be counter-productive and slow down the progress of development.

Cosmos tries to solve this by enabling interoperability among many sovereign blockchains, even and ESPECIALLY if they have different governance policies. Therefore, social AND economic scalability is one of the core value props of Cosmos. It give its users and developers the ultimate freedom and potential for permissionless experimentation.

A core tenet of Cosmos is that blockchains should be sovereign, meaning they are 100% in control of their own governance. In this world, ETH can fit into the internet of blockchains and its governance will continue to operate as it currently does.

On chain governance is a disaster -- coin vote based governance is a disgrace....it disenfranchises everyone who doesn't have coins -- even those with only a small amount.

I was already a huge Cosmos fan, largely because of their thorough dev and launch process to mainnet. The way they seem to be managing this vuln further encourages me....An open system like this with a few battle-scars feels more trustworthy to me than one which is apparently flawless. “Flawless” to me indicates either that it hasn't really been tested or that the devs covered it up.

If you just look at Twitter, you’d think Lightning is the only real layer 2 proposal for Bitcoin, but I think Cosmos actually presents a fascinating alternative, with very different tradeoffs.

Imagine a Cosmos zone with a validator set (maybe the ATOM validators, or maybe not) who control a Bitcoin multisig wallet. There are a lot of ways you could choose these validators (with a staking token, using BTC itself as a stake, or even with some variant of Proof of Work) but you can use this basic framework to have a zone where users can send Bitcoin, and then use it in ways that mainchain bitcoin can’t be used, for example in complex smart contracts that extend functionality beyond what Bitcoin Script allows.

Something that’s always put me off about a lot of the ETH ecosystem is that seemingly every new project comes with a new, increasingly illiquid token. Cosmos plus Bitcoin gives us the chance to create things like prediction markets without needing a new token at all—and using the single cryptocurrency that is most “money-like” as a result of its superior liquidity and acceptance.

The free movement in and out of cryptocurrency communities is crucial if we want to maintain the open, inclusive values that the industry was built on. Today 99% of crypto-to-crypto exchange volume is happening on centralized exchanges like Coinbase and Binance. Trusted 3rd party bridges work well for some people, but censorship, security breaches and theft have proven to be major problems that users of centralized exchanges face. A self-sovereign bridge that connects cryptocurrency communities is an important piece of infrastructure that the space needs. This is where the Cosmos SDK, the Cosmos Inter-Blockchain Communication (IBC) protocol and Tendermint come together.

Every project that uses the Cosmos SDK can gain interoperability in the Cosmos network by utilizing the IBC and connecting to a hub. The Cosmos Hub will be the leading hub at the onset, but there may be many hubs over time that connect different zones. If you are building a Bitcoin peg zone like Nomic, you can use IBC to connect to the Cosmos Hub and make BTC interoperable with any token also connected to the Cosmos Hub. You could imagine interfaces on top of a widely connected hub to make the decentralized exchange of any IBC-enabled token (not just ERC-20) possible. This new construct removes power from centralized exchanges and empower cryptocurrency users to freely move in and out of different communities.