Ethereum Vs Cosmos

It’s been more than a decade since the first crypto currency was invented and introduced to the world.

In 2009, Bitcoin, the digital money changed everything about the traditional finance system. Though developers were trying to improve the existing blockchain and make it more scalable, the difference between these chains were minimal.

It changed in 2015,with the launch of Ethereum, which showed the world the other use cases of the blockchain technology, such as its ability to store data.

This led to the creation of smart contracts, and through them, to the creation of numerous new blockchain products, countless projects, and a new era of unique use cases and experimentation with this technology. The potential suddenly seemed limitless.

When it comes to scalability and processing speed, Ethereum’s network started seeing issues, little to no improvement in its performance and an increase in the transaction fees.

This is when COSMOS the ecosystem, a blockchain network that seemed more scalable and efficient with a better user experience. Let us study both of them in detail.

Ethereum

Ethereum is the community-run technology powering the cryptocurrency Ether (ETH) along with thousands of decentralized applications. This is made possible with the introduction of new token standards, such as ERC-20.

Ethereum has an utility token model, which allows developers to quickly and easily create their own tokens without having to build it from scratch, unlike the earlier days.

In addition to smart contracts, Ethereum hosts other cryptocurrencies as well. Each token has a different protocol, but they all use Ethereum’s network.

They can be tied to other blockchain protocols ,such as Defi protocols, metaverse projects, etc.

Limits of Ethereum

Although most stablecoins use ERC-20 standard tokens on the Ethereum network, the network is not yet ready to be used for daily payments due to relatively low speed in processing transactions. In addition, the rise of gas prices, when transaction traffic is jammed up, presents another issue.

Ethereum is a general-use blockchain where the developers can build side chains to make changes to Ethereum’s blockchain using smart contracts.

However, the problem with this is that the smart contracts are all general purpose, which makes them limited in functionality. So, more complex projects have to resort to combining multiple basic contracts to achieve the desired functionality for their project.

Crypto derivatives platform dYdX, which is currently built on Ethereum layer 2, announced that it would be moving to Cosmos, a standalone blockchain, because they found Ethereum less scalable in order to handle consensus and off-chain order book matching.

Currently, the existing dYdX protocol processes about 10 trades per second and 1,000 order placements and cancellations per second, with the goal of scaling to magnitudes higher. However, the firm says that neither Ethereum layer 1 nor layer 2 solutions can meet its requirements.

Here is some major user pain points of Ethereum

1. Scalability

2. Usability

3.Sovereignty

UX Pain point : Getting started in Ethereum

• Strangers in a strange land

non-technical users may find the first few steps into the Ethereum ecosystem very disorienting.

• Built for flipping

In order to engage with the Ethereum blockchain, a user will need Ether. And to get Ether, most users will need to first buy it. Therefore, most users’ journey start at exchanges.

• Gas

The concept of gas was questioned by each and every person who is familiar with Ethereum repeatedly.

• Private Key Management & Recovery

Private key management (or rather mis-management) has left many people vulnerable to theft and loss of access.

• Standardisation of UX

A common design language and standardised practices still remain elusive across the ecosystem.

COSMOS

Strictly speaking, Cosmos is a decentralized network of independent parallel blockchains, each powered by BFT consensus algorithms, like Tendermint consensus.

In other words, Cosmos is an ecosystem of blockchains that can scale and interoperate with each other. Before Cosmos, blockchains were siloed and unable to communicate with each other. They were hard to build and could only handle a small amount of transactions per second. Cosmos solves these problems with a new technical vision.

How does Cosmos fit in?

The end goal is to create an internet of blockchains, a network of blockchains able to communicate with each other in a decentralized way. With Cosmos, blockchains can maintain sovereignty, process transactions quickly and communicate with other blockchains in the ecosystem.

This is achieved through a set of open source tools like Tendermint, the Cosmos SDK and IBC, designed to let people build custom, secure, scalable and interoperable blockchain applications quickly.

What is Tendermint BFT and ABCI

Building a blockchain requires building all three layers (Networking, Consensus, and Application) from the ground up. Ethereum simplified the development of decentralized applications by providing a Virtual-Machine blockchain on which anyone could deploy custom logic in the form of smart contracts. However, it did not simplify the development of blockchains themselves. Much like Bitcoin, Go-Ethereum remains a monolithic tech stack that is difficult to fork from and customize. This is where Tendermint came in.

Tendermint BFT is a solution that packages the networking and consensus layers of a blockchain into a generic engine, allowing developers to focus on application development as opposed to the complex underlying protocol. As a result, Tendermint saves hundreds of hours of development time. Note that Tendermint also designates the name of the Byzantine Fault Tolerant (BFT) consensus algorithm used within the Tendermint BFT engine.

The Tendermint BFT engine is connected to the application by a socket protocol called the Application Blockchain Interface (ABCI). This protocol can be wrapped in any programming language, making it possible for developers to choose a language that fits their needs.

Tendermint BFT reduces the development time of a blockchain from years to weeks. However, building a secure ABCI-app from scratch remains a difficult task. This is why the Cosmos SDK exists.

The Cosmos SDK is a generalized framework that simplifies the process of building secure blockchain applications on top of Tendermint BFT. It is based on two major principles:.

• Modularity: Additionally, developers can create new modules to customize their application.
• Capabilities-based security: Capabilities constrain the security boundaries between modules, enabling developers to better reason about the composability of modules and limit the scope of malicious or unexpected interactions.

Here is a quick recap of what Cosmos is in three concise points:

• Cosmos makes blockchains powerful and easy to develop with Tendermint BFT and the modularity of the Cosmos SDK.
• Cosmos enables blockchains to transfer value with each other through IBC and Peg-Zones, while letting them retain their sovereignty.
• Cosmos allows blockchain applications to scale to millions of users through horizontal and vertical scalability solutions.

Conclusion

We can say that Cosmos and Ethereum are not really comparable in a traditional sense.

Cosmos does things in a completely different way, and with different goals in mind. It has become an internet of blockchains on a small scale, where multiple blockchain projects exist.

Ethereum is a network that relies on sidechains that are still depending on its main blockchain, which is where all the traffic comes from.

In the end, we can say that Cosmos is a more efficient and cleaner solution, although Ethereum could still be effective, if it were more scalable.

Scalability lies at the heart of most of its problems, and solving that issue would bring the project back to glory.

However, Ethereum merge is yet to be implemented , so there is still hope that Ethereum will resolve the issues currently we are facing.

On the other hand, the cosmos has several advantages. Among others, they give more flexibility, security, performance and sovereignty. This question is justified, considering that most decentralized applications today are developed on top of Virtual Machine blockchains like Ethereum.

First, it should be stated that the reason for this phenomenon is that up until now blockchains were much more difficult to develop than Smart Contracts. This is not the case anymore, thanks to the Cosmos SDK.