Fin 383 – Financial Technologies and Innovations
Essay Preview: Fin 383 – Financial Technologies and Innovations
Report this essay
FIN383
Financial Technologies and Innovations
Introduction
This executive summary aims to educate potential investors of the high growth potential of Cosmos from the ICO market. I believe readers have heard of popular blockchains/cryptocurrencies such as Bitcoin and Ethereum. Where users would be able to transact things of value through their respective platforms without the cumbersome need of going through a centralized network and stringent regulations. Imagine that all these platforms can be incorporated into a single platform that would facilitate transactions between platforms. Wouldn’t it be amazing to have even greater convenience? This is what Cosmos aims to do.
What exactly is Cosmos?
Cosmos is a project that aims to create a network of distributed ledgers that solves problems in the blockchains/cryptocurrencies communities. Problems includes a lack of interoperability between applications and cryptocurrencies, scalability and capacity for upgrades.
Interoperability
Cosmos could combine multiple applications and cryptocurrencies together, which is something other blockchains do badly with. This can be done through the creation of a new zone. Where an individual would be able to pull any blockchain system into the Cosmos hub and transact tokens to and fro without the need of an third party. For example, if an individual wanted to exchange ether for bitcoin, the person would have to sell ether for a fiat currency on an open exchange and then use it to buy bitcoin on another exchange. This is time-consuming and inefficient. Moreover, there were cases where cryptocurrency exchanges were hacked (eg: Mt. Gox, Bitfinex)
Scalability
Another issue with existing blockchains is scalability. Both Ethereum and Bitcoin have limited penetration due to its slow transaction speed. It support only a small portion of payment transactions as compared to established companies like Visa and Mastercard.
In Cosmos, blockchains are organized into hubs and zones plugged into a central hub. Each zone would maintain its own governance. When a zone gets too crowded, simply add a new zone into the hub and move some of the people to the new zone. There is no limit to the number of zones that can be added into a hub. Essentially, the transaction speed would be just as quick or even quicker than before. The hub will ensure that the zones remain synchronized.
Upgradability
When newer versions