Published: December 16th, 2019
– Though the cryptocurrency market seems to be in winter of sorts, one cryptocurrency is defying the odds…
Cosmos (ATOM) is relatively little known in the cryptocurrency space. It is a coin whose network serves as an ecosystem for various blockchains and despites its stature, it seems to be climbing the ladder and may soon be among the top ten cryptocurrencies by market cap.
At a time when Bitcoin and other major cryptocurrencies are experiencing major drops of between 1 and 3% in value, ATOM is recording a rise of almost 10%. The coin now stands at $3.92. ATOM has maintained an upward rise for the past three months.
Its price reflects a 26% gain in value since September. Compared to Ethereum (ETH), Ripple (XRP), and Bitcoin (BTC) that have gone down 20.5%, 31%, and 13.7% respectively during the same time, ATOM has risen meteorically.
This recent rally may be driven by the knowledge that Binance plans to add the cryptocurrency to the list of coins that platform users can stake. When a cryptocurrency puts a coin in the staking list, holders can lock it and receive passive periodic income.
Staking is a very hot topic in the cryptocurrency space at the moment. The rise of Tezos, a top ten crypto and another coin that has made impressive gains lately is primarily because of staking.
The announcement that some wallets and cryptocurrency exchanges will support the staking of Tezos has caused its price to soar. It is currently the 10th cryptocurrency by market cap and one of the only eleven that had a capitalization of more than $1 billion ($1,126,040,013) as of (December 14, 2019, 9:11 GMT). Some 660,373,612 XTZ coins are in circulation, each going for $1.71.
ATOM, on the other hand, is occupying position 16 with a market capitalization of $776,683,645 for the 190,688,439 ATOM coins in circulation.
ATOM’s meteoric rise could also be due to the increase in trade volumes. Although, trade volumes increase where interest has been sparked. This growth, as such, is probably due to the interest in the parent network, Cosmos.
Since July, the ATOM’s trade volume has doubled. The coin is now traded in more exchanges and is recording, on average, about $200 million worth of traded units daily. The adoption of Cosmos has also increased over the same period.
At the moment, prospects point to ATOM as one of the best cryptocurrencies to back going into 2020. However, every investor that wants to make this investment decision cannot stop asking if the currency will bear the good run long-term.
Well, this is a hard question to answer conclusively. First, because the cryptocurrency environment is very volatile. Many factors can lead to a shift in the position of a coin. And, such factors can lead to both positive and negative shifts.
That notwithstanding, the proposition of the Cosmos network looks great, especially with regards to tackling some of the technical challenges that the Blockchain environment is grappling with.
To understand why Cosmos stands a better chance and is a sound investment choice, you first need to know a bit about the network and its objectives.
Cosmos is a decentralized system that works with independent, parallel blockchains built on the Byzantine Fault Tolerance (BFT) consensus algorithm. The BFT consensus refers to the characteristic that enables a system to overlook the class of failures that may result from the Byzantine Generals’ problem. It is an analogy that borrows from the communication breakdown that is likely to occur on the battlefield when generals have to agree on the next course of action.
In the Blockchain space, reaching consensus may seem easy but that rarely is the case, especially in a distributed network situation.
This is where the Cosmos network comes in. It focuses on creating compatibility with other blockchains thereby interacting with other cryptocurrencies and applications. This is an achievement no other blockchain can do, at least not at the moment.
And, the ATOM coins facilitate transaction in the Cosmos network and allow network users to participate in the consensus process.
The important technical values that allow the Cosmos network to achieve its objectives in interacting with other blockchains are scalability and cross Blockchain bridges. And, the network’s decentralized exchange runs on the Byzantine Fault Tolerance’s Proof of Stake (PoS).
– So, how will these characteristics contribute to ATOM’s seemingly undeterred match to the top ten?
Scalability is a critical feature for any network seeking relevancy in the future market of deployed applications. Cosmos has intentions of increasing its scalability by employing other compatible networks that it plans to connect with through zones.
The ability to do so is attractive especially to programmers in the blockchain environment and cryptocurrency enthusiasts because it will help make the networks faster, cut on the transaction duration and bringing down the cost of business within blockchain systems.
Any network that succeeds in achieving the feat highlighted above will attract more users. Increased adoption easily translates to more demand for the ATOM coin, and, as such, a hike in the price.
Of course, most happenings in the cryptocurrency space are never as plain or as straight as they seem. The price of the coin, for instance, may be subject to other factors such as the overall investment and uptake of services in the space. That notwithstanding, the ATOM has a lot going on for it at the moment, and many investors are trooping in as a result.
The rise of the ATOM coin to the top 20 cryptocurrencies is not surprising. The coin and its network hold a lot of promise for the cryptocurrency space. While it is attractive to put money on the project, it is wise to understand that Cosmos is a Blockchain project. And, the blockchain space is very volatile. Caution, as such, should always accompany your investment intentions.