Don't Go to the Moon, Go Into The Cosmos with the Atom Cryptocurrency
I never thought I would get up in the morning one day talking about the Atom Token and the Cosmos Ecosystem. I initially bought ATOM as an alternative to buying DOT when DOT could not be purchased in New York. For a while, DOT was using the Cosmos hub to secure its own network until they decided to part ways. After that, I had to question what the hell is Atom and why should I still have it in my portfolio? I had a rough idea what the cosmos was but I never looked into much depth until recently. This will be the first post of many about this ecosystem. However, let's focus first on the ATOM token, the centerpiece of what makes this system work.
What is Atom and Cosmos?
Cosmos is an Ecosystem while Atom is the token. To those familiar with Ethereum Ecosystem and how to use the Ethereum network won't find it intuitive as to why you should have Atom. On Ethereum, you are required to use ETH to perform transactions. This isn't true of ATOM. This has to do with the nature of cosmos.
On Ethereum, you are trying to run decentralized applications on the network. Cosmos is designed to run entire blockchains and multiple blockchains. This is the core concept of Cosmos, IBC, The Internet of Blockchains. Before projects like Cosmos, it was impossible for blockchains to communicate with each other. In the same way you cannot run a BTC transaction on an LTC network, this is true for smart contract networks. With the IBC, you are creating a number of blockchains which can interact with each other in a far more permission less way. This is all developed using the Cosmos SDK.
The second question is, what does the ATOM token do? The ATOM token has two primary purposes, to secure the Cosmos network and for governance proposals on the cosmos SDK. In order to do both, you must stake your atom. In exchange for staking your Atom, you are rewarded inflationary rewards for the creation of new atom tokens.
There are some trade-offs to staking Atom which is normative to most Proof of Stake Blockchains. You need to stake your Atom with a validator, a person or an institution responsible for validating the integrity blocks and transactions being made. However, what if the validator under performs or does what is called double signing a transaction, then the Atom you have staked can be slashed.
What are some quality Validators and how do I find additional information on validators
Researching validators is an extremely important task to handle. It is important so you can entrust your cryptocurrencies with trustworthy validators. You are also going to want to have multiple validators for a few reasons. For security reasons, you want to make sure the validators are decentralized and cannot have too much voting power. The other problem is to protect yourself, by using multiple validators, you have reduced your risks from a single party.
On Staking Rewards, they provide a lot of information regarding validators; how many users are there, what are their commission rates, their websites, their social media accounts, how much of their own Atom they have delegated. The last one is very important. By having their own Atom placed in jeopardy, it indicates the soundness of the validator.
As far as a short list of quality validators, I'll list a few suggestions.
- Stake Fish- Stakefish is a multichain validator from projects as large as ETH 2.0. If you see Stake Fish providing staking support for a network, it could be an indicator of a very sound project to invest in.
- Dokia Capital-Another very large multichain validator.
- SG-1-The nice thing about SG-1 is they are a validator that is specialized in the Cosmos ecosystem. If you are interested in supporting a large specialized validator, SG-1 might be a nice place to check out.
- Cosmostation- This is another pure cosmos ecosystem validator. Besides providing support as a validator, they also provide a lot of powerful tools for the cosmos system. They are the creators of Mintscan, a block explorer for cosmos. The created web wallets and smartphone wallet support for the cosmos ecosystem. However, I would recommend that you use the Keplr wallet as it has universal support from the entire cosmos ecosystem.
- Atomic Wallet-Another multichain but smaller validator. Their bread and butter is actually the Atomic Wallet, which allows for atomic swapping from two different blockchains. I happen to use them as my current validator.
- Imperator.co-While a much smaller validator overall, they are a major supporter of many cosmos blockchains. If you find some niche Cosmos token you want to stake, it is likely this validator supports this network.
What wallets would you recommend
Selecting the correct wallet to use can be important. Even if a wallet supports Cosmos, it doesn't mean it can be used for staking. Just because a wallet supports staking, doesn't mean it allows you to engage with the cosmos ecosystem. That is why it is important to select the right wallet for the job.
- Keplr Wallet- My first recommended wallet is Keplr. I have yet to have any problems engaging with any cosmos blockchain with this wallet. The other great feature is how easy they make it to find validators and engage with governance proposals. It has support for Android, iOS, a Web Wallet and a chrome extension.
- Cosmostaion Wallet- This is another major wallet of the Cosmos Ecosystem. It is about on par with Keplr Wallet. I have yet to use it personally but I rarely have seen much complaints about the Cosmostation wallet. The analogy is about the same as whether you prefer Coke or Pepsi. Cosmostation has support Android, iOS, and a web wallet.
- Atomic Wallet-If you are only interested in staking the Atom token and not engaging with the entire ecosystem, this wallet should work just fine. But if you are interested in engaging with the ecosystem, you should be using Keplr or Cosmostation. They have support for iOS, Android, and desktop.
- Exodus Wallet-Very Similar to Atomic Wallet. They have support for iOS, Android and desktop. They also offer support for Trezor.
Is the Atom token a good investment
Atom is a strange token to recommend. It has been a steady appreciating asset over the long run. Most people in cryptocurrency tend to love the tokens they hold but people who hold atom do not, they have a preference for the cosmos ecosystem. Having listened to developers talk about Atom have given me an impression that Atom is a necessary evil for developing the cosmos ecosystem.
There are some positive things spoken about Atom. The obvious benefit is the staking rewards which can provide a passive income for some folks. The mindset for people in the cosmos ecosystem tends to be more risk averse. Another auxiliary reason to be an Atom staker is the Airdrops. You can find more details about cosmos airdrops at https://www.cosmosairdrops.io. I'll go into more detail in another article.
When you compare it to Ethereum, we can get two different impressions. On the one year chart, according to coingecko, Atom for the most part has been able to keep up with Ethereum. However, since it's inception, it has lost value against ethereum.
This is my first article about the cosmos ecosystem. I will be releasing more research information about the cosmos ecosystem. Please stay tuned and share this article with friends and family if you found it informative. Please leave a comment below if you have an questions.