As of right now, scalability and interoperability are some of the largest issues in blockchain development. Polkadot and Cosmos are both looking to tackle these issues. Both blockchains look to provide services that can connect with many other chains and make them easier to use. However, there are a few key differences between the chains.
What is Blockchain Interoperability?
Blockchain interoperability is the concept that blockchains can be linked to each other. For instance, BTC owners cannot send their position to a wallet on the Ethereum chain. This is because the 2 blockchains are separate and often struggle to interact.
Both Polkadot and Cosmos are looking to tackle this issue. They are hoping to make cross-chain transactions smoother and easier. This will help with the overall scalability and uses of crypto, as well as contribute to decentralization.
What is Polkadot?
Polkadot is a multi-chain network that aims to make blockchains more connected. This is through the use of Parallel Chains, or “Parachains.” Polkadot currently has over 100 chains in its network that can process up to 1 million transactions a second. However, the project is currently in a rollout phase and is not fully usable.
Kusama is a project that operates on the Polkadot network. It is more project based, allowing users to create projects that can be used on multiple chains. Kusama is essentially a beta version of Polkadot, allowing users to experiment with different uses on the chain. Once Polkadot is released, the 2 projects will merge and make the chain even larger.
Slot auctions are a way in which blockchains can leverage the power of a specific parachain on Polkadot’s network. Polkadot has a limited number of available chains, so there has to be a way to ration the parachains. This will be done through a candle auction, which is often considered more equitable than traditional auctions.
Moonriver is a way for users to test their projects before they are released to the Polkadot chain. It allows you to create a project and then have it “tested and verified under real economic conditions.” This is very important for experimental projects looking to gain traction. It is compatible with Ethereum Virtual Machine (EVM) allowing it to harness the power of the Ethereum blockchain.
What is Cosmos?
Cosmos is hoping to address many of the same issues as polkadot. They are hoping to create “an internet of blockchains” so that chains can communicate with each other quickly and efficiently.
ATOM is the natve token of the Cosmos network. It currently functions as a form of payment across chains, as well as a staking coin that helps secure the network.
Cosmos SDK is a platform for building blockchains that can easily connect to the Cosmos Hub. Right now, most chains use unique coding languages that can be incredibly difficult to interact with other blockchains. Cosmos SDK is hoping to address this by making the coding experience more beginner-friendly and easier to navigate.
Gravity DEX is a decentralized exchange that operates on Cosmos’ network. It is similar to Uniswap and SushiSwap in that it supports the swapping and trading of tokens. However, tradable tokens are those on the Cosmos chain. Every token on the chain is available to be swapped with ATOM.
Polkadot vs. Cosmos Market Capitalization
While, both projects can have strong growth potential, they are suffering from the downfall of Terra. They are looking to combat major issues with cryptocurrency. They already have billions invested into their projects, and they are not even fully functional yet. In short, it may be worth waiting for these tokens to recover—or even buying at the dip and hodling for some considerable time.
Use Cases of Polkadot vs. Cosmos
While both projects are aiming to provide a more scalable and efficient future for crypto, their uses differ. Polkadot is more security focused and Cosmos is more focused on adoption.
One major use case of Polkadot is in the loan industry. Centrifuge is a project that is hoping to make loans more accessible through the Polkadot network. It is hoping to change the loan industry by allowing you to use unorthodox forms of collateral. They are hoping to allow for the use of invoices and cryptocurrency as collateral for loans. This could have a huge impact on the loan industry.
IRISnet is a project that is looking to incorporate business into the Cosmos network. Its goal is to provide businesses with a platform to connect with consumers and improve efficiency. It utilizes a unified service model to improve business functions. It was created on Cosmos SDK.
Where to Buy DOT and ATOM
DOT and ATOM have both attracted lots of hype since their respective release dates. Because of this, the tokens are fairly easy to purchase and are available on most exchanges. However, a few exchanges stand out due to ease of use and security.
Coinbase, eToro and SoFi are great options for those looking to purchase DOT or ATOM. However, every exchange differs, so make sure to do some research before decking on an exchange.
- securely through Coinbase's websiteBest For:Coinbase Learn
Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
- securely through eToro's websiteBest For:Demo Accounts
Don’t invest unless you’re prepare to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins and learn more. Cryptocurrency is offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk.
What Has More Room to Grow: DOT or ATOM?
In terms of market cap, ATOM has more room to grow. Its market cap is well below DOT’s, meaning it has more room for growth in that area.
However, DOT may have more applications in the real world. Though Polkadot is not yet fully functional, it is set to be much more usable than Cosmos. This would make it easier for Polkadot to be used in larger operations.
Current Cryptocurrency Prices
While it once appeared that crypto was breaking into the realm of conventional finance, Terra was depegged from the dollar, Do Kwon became an international fugitive and crypto assets all lost quite a lot of value. Others say this only increases the risks associated with the currencies. Either way, make sure to check out the table of currency crypto prices to see the impacts.
So, What’s Better: Polkadot or Cosmos?
As of right now, Cosmos offers much more usability. It allows virtually anyone to create projects on the network. However, once Polkadot becomes fully functional, it may be a better platform due to increased security and uses. If Polkadot’s network can exceed expectations, it may help solve the problem of interoperability.
Frequently Asked Questions
Can you make money with ATOM or DOT?
Yes, you can make money investing in ATOM or DOT, but you should carefully invest, monitor your portfolio and exit your positions at opportune times.
Are ATOM and DOT safe cryptocurrencies?
You can invest in ATOM and DOT safely, but you should use a certified exchange and a secure crypto wallet.
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