With the high likelihood that there will be a huge number of blockchains operating simultaneously in the future, it seems that a focus on interoperability between different blockchains is crucial to the advancement of blockchain technology.
Two major contenders have risen up that lead the charge toward that goal— Polkadot and Cosmos. While both protocols utilize similar architecture, there are a number of important differences between them and within their respective ecosystems as well.
While Polkadot is getting a ton of acclaim, Cosmos is one that is vastly underrated. Find out why and how high the upside is for these projects. Let’s get it! BitSwap is the hottest new way to trade tokens. Crawling all the top decentralized exchanges, BitSwap gets you the very best price and value for your trades. BitSwap is changing the game. Try it now at bitswapdex.io.
Welcome to BitBoy Crypto! My name is Ben. Every day on this channel, I show you how to make money in cryptocurrency. If you like money and crypto, then make sure to hit that subscribe button. In today’s video, we will compare Polkadot and Cosmos, looking at their tech and their ecosystems. But stick around through the tech part because even if tech isn’t your thing, at the end of this video, I’m going to give you my price prediction for Cosmos and then you’re going to have to wait for my next Polkadot video to get my DOT price prediction.
But if tech videos are your thing, then smash that like button for us so we know you like these types of videos. Interoperability between different blockchains is fundamental to the scalability of the decentralized web aka Web 3.0. Both Polkadot and Cosmos use similar models to achieve this network of interoperable blockchains. However, there are some key differences between both protocols to point out as well.
Both Polkadot and Cosmos have a system of subchains that connect to the main chain, like spokes connecting to the main hub. However, Polkadot uses a sharded model where each shard in the protocol is the subchain called a parachain. Each parachain connects to the main chain which is called the relay chain.
Developers can use the Substrate development framework to effortlessly build application-specific parachains that connect to Polkadot’s relay chain. Each parachain functions as its own blockchain within the Polkadot network. This means that each parachain has its own state machine and can utilize any number of unique functions including different consensus algorithms, different gas models and more.
Each parachain has its own local block producers which are called collators. Across the Polkadot network, each parachain has an abstract state transition function or STF, and the state of each parachain is combined to create the global state of the relay chain.
The relay chain validates the state transition of all connected parachains which creates a sharded state for all parachains across the entire system. Polkadot uses a unique consensus algorithm to do this called GRANDPA. On Polkadot, parachains operate under a shared security model, meaning that if the relay chain is highly secure, then all parachains connected to the relay chain are equally as secure.
One downside to this model is that the inverse is also true, meaning if the relay chain isn’t very secure, then the parachains also will not be very secure. Also, this creates the possibility of malicious validator rejecting blocks coming from collators of a certain parachain, thus preventing the parachain’s progress from being combined into the global state.
In order to reduce the possibility of this happening, Polkadot shuffles the validators, forcing them to validate random parachains, reducing the likelihood that a validator could censor a specific parachain. In addition to that, Polkadot has a second group of validators called fishermen, who constantly check all the validators for malicious activity. Cosmos functions similarly with a spoke and hub model using the main chain and a sidechain.
On Cosmos, the main chain is Cosmos Hub and the sidechains are called zones. Developers can use the Cosmos SDK framework to effortlessly build custom application-specific zones that connect to a hub. And, no, not that hub. However, one difference from Polkadot is that Cosmos allows for multiple hubs. Also, Cosmos does not use sharding, so each zone and hub is independent with its own validator set. Another main difference is that unlike Polkadot, where the security of the parachains is dependent on the security of the relay chain, on the Cosmos network, every hub and every zone is independent and secures itself.
Each hub and zone runs its own Tendermint BFT consensus mechanism. And the state of each hub and zone is secured only by the validators from that specific hub or zone. Now, one downside to this model is that the state of each hub and zone is secured by its own validators. There’s no sharing. Unlike Polkadot which shuffles validators randomly, Cosmos makes the security of each hub and zone dependent on the validators and the number of validators it has.
To have strong security, it’s imperative that a hub or zone has a large number of validators. Unfortunately, for some smaller projects or applications, it may be difficult to recruit enough validators to have the necessary security required. However, some projects may consider this to be a selling point because it gives those projects more autonomy and control over the validation process. Now, let’s take a look at the ecosystem around each of these projects.
When it comes to Polkadot and the teams and projects building on Substrate, they have quite a few. One quick look at this page shows 130 different teams or projects currently in the Polkadot ecosystem. This includes some big names such as Ankr, Band Protocol, Chainlink, Everstake, Injective Protocol, Kusama, Ledger Integration, Ontology, Polymath, SushiSwap and Trust Wallet. So Polkadot is definitely a very popular platform and Substrate is a very popular framework with tons of interesting projects and teams utilizing it.
Taking a look at Cosmos, as of right now, their website shows 247 different teams or projects currently in the Cosmos ecosystem. And that’s kind of ironic because this project is also working 24/7 itself. This includes some pretty well-known projects, of course, such as Ankr, BAND, both Binance Chain and Binance Smart Chain, Crypto.com, Dash, KAVA, MATIC, OKExChain and Injective Protocol, just to name a few. Now, we’re actually about to do a video on Injective Protocol as well, so make sure to check that out on Monday.
There are some major teams and projects of course in the Cosmos ecosystem, so when it comes to that one, as of right now, Cosmos actually has nearly double the teams and projects that Polkadot has, giving them a clear advantage. However, when it comes to high-quality functionality and usability, I would say that Cosmos and Polkadot are very close to each other, so the race there is really neck to neck.
That is why you may have noticed some projects like Ankr, BAND and INJ were mentioned twice because they’re building on both. Instead of choosing between the two of these excellent protocols, they’re going to utilize functionality from both protocols.
I like to have my cake and eat it too as well. So it’s possible that both projects could continue to grow and be successful in the future. One interesting to note is that as of right now, more centralized exchanges and decentralized exchanges like Binance Chain, Binance Smart Chain, Crypto.com and OKExChain are building on Cosmos, whereas it seems that Polkadot is being used a lot for oracle solutions such as BAND and Chainlink. It’ll be very interesting to see if this trend continues in the future and if each protocol ends up being commonly utilized for certain specific functions, use cases and niches.
But here’s the main thing I want you to take away from this video. Cosmos and DOT are not that far apart, but they are far apart in market cap. When you see gaps like this, this is where the potential for lower-ranked projects comes into focus. And Cosmos has so much potential, it’s reaching for the stars. It’s been on the backend working and building while other projects are reaping rewards.
Eventually, Cosmos will get its turn. I see a huge run-up in the future for the ATOM coin. It’s essentially at its all-time high right now, but there’s still so much more room for it to go. I believe Cosmos will see its valuation rise, and the price of ATOM will reach $140 per coin in this bull run. What do you guys think? Is Polkadot all it’s hyped up to be? Or is Cosmos with nearly twice the projects in their ecosystem going to take the top spot? Or will each be used for different applications in the future? Drop me your comments down below.
Read More: Will Raven Coin Beat Stellar Crypto?