As developers explore the possibilities of Web3, they seek scalability and consistency between self-sufficient distributed ledgers. Cosmos and Polkadot offer solutions to this by joining several platforms to smooth the process of decentralized app (dApps) creation, albeit applying different methods.
If you consider this a promising innovation you can benefit from this by investing in the Cosmos coin (ATOM) or the Polkadot token (DOT). In this article, we compare both systems and assess the latest results of their coins, exploring their peculiarities and prospects for the nearest future.
Consistency Enhanced By Polkadot
Polkadot is a solution created in order to ensure consistency and connectivity of a number of distributed ledgers. This is the ability of various computer systems to work in tandem and synergy and swap information seamlessly. In the world of cryptos, it means enabling unalike unique systems to interact with each other and provide data necessary for specific operations.
The platform achieves the necessary result by establishing a network of interconnected chains, called “parachains.” Each of them may feature its unique consensus model, utility token, and governance structure. These connections are necessary to convey information between parachains through Polkadot’s “relay chain,” which acts as a safe hub for self-sufficient interaction.
Polkadot’s architecture has several benefits. Foremost, we should specify the feature of the creation of decentralized apps (dApps) that can utilize the features of opposed platforms. For example, a dApp could use the privacy functionality of one blockchain and the scalability features of another. This can lead to more powerful and productive dApps that offer better user experiences.
Interoperability also enables easier token transfers between different blockchains. With Polkadot, tokens can be transferred with no involvement of any digital exchange controlled beyond the ecosystem. This reduces costs and increases the quality of performance.
Polkadot’s consistency has made it a popular choice for developers. It has attracted several high-profile projects, including Chainlink, Acala, and Kusama. It has also received significant investment from venture capital firms and has a large and active community of developers and supporters.
What Is The Difference Between Cosmos And Polkadot?
Polkadot and Cosmos are two solutions designed to solve the problem of blockchain synergy. While these projects share a similar goal, they can be distinguished by their approaches and design philosophies.
Polkadot aims to create a multi-chain ecosystem where self-sufficient systems would be able to communicate and share data securely. Polkadot’s architecture consists of a relay chain that connects to multiple parachains, each with its own consensus model and state transition function. This pattern ensures connectivity between different platforms without compromising their security or scalability. The development also supports cross-chain operations and the exchange of inputs within chains’ ecosystems, making it a powerful infrastructure for building complex dApps.
In contrast, Cosmos’ target is to create an “Internet of Blockchains” by enabling interraction between self-sufficient blockchains through its Inter-Blockchain Communication (IBC) protocol. Cosmos uses a hub-and-spoke model, where the Cosmos Hub acts as a central point of coordination for connecting different blockchains. This approach allows for more flexibility and customization but requires each blockchain to implement the IBC protocol to connect with other chains.
Overall, Polkadot’s design emphasizes security and scalability, while Cosmos prioritizes flexibility and customization. Both projects have their strengths and weaknesses, and the choice between them depends on the specific use case and requirements of the application being built.
The Performance Of Cryptocurrencies?
Over the last few years, both DOT and ATOM cryptocurrencies have shown a significant rise in value, although DOT has outperformed ATOM. At the beginning of 2021, DOT was trading at around $9, and by the end of the year, it had reached an all-time high of over $50. This represents a gain of over 400% in a single year. On the other hand, ATOM started the year at around $5 and reached its all-time high of just under $40 in May, representing a gain of around 700%. However, since May, ATOM has experienced a significant decline in value and currently trades at around $12, which is still higher than its starting value.
The reason for the outperformance of DOT over ATOM can be attributed to several factors. One of the main reasons is the strong fundamentals of the Polkadot solution, which has been gaining popularity among developers due to its interoperability and scalability features. Additionally, the growth of the DeFi space has also contributed to the rise in the value of DOT, as the network is being used to develop various DeFi applications. Finally, the overall bullish sentiment in the cryptocurrency market has also played a role in the rise of both DOT and ATOM, but DOT has benefited more due to its strong fundamentals and growing popularity.
Also, if we compare the liquidity of both assets, which in crypto is based on market capitalization and coin supply limits, we will see that Polkadot is a bigger project that is able to remain on the top level for a longer time. With a market cap of over $7.4 billion, it’s the 12th biggest cryptocurrency, whilst ATOM’s market cap is $4 billion smaller compared to DOT. Both tokens feature unlimited supply.
In conclusion, while both Polkadot and Cosmos aim to solve consistency issues in the blockchain niche, they differ in their approaches. The competition between DOT and ATOM over the last year shows that DOT has outperformed ATOM, making it a better investment choice for some investors.