Cosmos Network's technology is novel in nature but stands upon some of the existing concepts like the Proof-of-Stake consensus mechanism. The novelty comes from having an original implementation. The key focus is on proving an ecosystem of blockchains that have to stay connected with each other, unlike traditional ones that are isolated. 

The platform consists of key components such as the Cosmos Hub, the primary blockchain referred to as the Hub, parallel blockchains (sidechains) referred to as zones, Tendermint consensus mechanism, and Inter-blockchain Communication protocol (IBC). In addition, there is a Cosmos Software development kit for building " out of the box" blockchains on the network. 

Tendermint

This is a Byzantine fault-tolerant Proof-of-Stake consensus mechanism that powers the Cosmos Network. It is both an engine and an interface used for building applications. Unlike traditional BFTs, where each node has the same voting power, the Tendermint PoS distinguishes the nodes with voting power. These nodes that have voting power are called Validators, and they participate in the consensus protocol by broadcasting cryptographic signatures, or votes, to agree upon the next block.

Their voting power is set at the genesis block for side chains and can later be changed by the blockchain upgrade or can depend on the amount of token staked which is the case in the Cosmos Hub. 

The consensus is achieved by a fixed set of validators identified by their public key that vote on one block at a time in rounds. The votes are cast on the block proposed by the round leader who is selected randomly, but the odds of being Selected is proportional to ones stake in the network.. The voting process is accepted as valid if ⅔ validators come to a consensus. 

Tendermint consensus can achieve high transaction throughput speeds of 1000-10,000 TX/s per blockchain. In benchmarks of 64 nodes distributed across 7 data centers on 5 continents. 

Cosmos Hub and Zones 

The Cosmos Hub is the first of potentially thousands of interconnected blockchains - zones that will eventually comprise the Cosmos Network ecosystem. 

As you can see per the graph above, the Cosmos Hub is the first blockchain in the ecosystem and is the focal point between its sidechains, referred to as a zone. They are connected and are communicating through a novel inter-blockchain communication protocol (IBC). The protocol communicates the token types and transfers within the ecosystem as well as transactions and the number of tokens in each zone. This is why the token transfers can be seamless without the need for liquid exchange because all inter-zone coin transfers go through the Cosmos Hub. Since the zones can be derived from existing blockchains, any blockchain system can be plugged into the Cosmos Hub, thus achieving true interoperability. Also worth mentioning is that every zone can also become a Hub through an acyclic graph. 

Thus, the Cosmos Hub is a central ledger for the whole system and is a multi-asset blockchain through which these tokens are moved across the network. They are transferred in a special IBC packet called a “coin packet.” The hub is responsible for preserving the global invariance of the total amount of each token across the zones. IBC coin packet transactions must be committed by the sender, hub, and receiver blockchains.

Inter-blockchain Communication (IBC)

This is the protocol by which data is transferred inside the Hub and the Zones network, and it does so in data packets. To move the packet from one chain to another, a proof is posted on the receiving chain that states the sending chain published the packet into the designated destination. Then the receiving chain checks this proof through the senders’ block header. 

The IBC protocol has two types of transactions: an IBCBlockCommitTx transaction, which allows a blockchain to prove to any observer of its most recent block-hash, and an IBCPacketTx transaction, which allows a blockchain to prove to any observer that the given packet was indeed published by the sender’s application, via a Merkle-proof to the recent block-hash.

Cosmos SDK

Lastly, the Cosmos ecosystem's key component is its Software development kit, which enables “out of the box” blockchain development. It provides a set of tools for developers to easily and quickly build and design new blockchains and decentralized applications. 

This tool kit allows them to quickly write custom blockchains with their own logic, launch their product and connect to other blockchains in the ecosystem. 

The Cosmos Network can proudly say that it already has a vast ecosystem of dApps that have built on top of the provided infrastructure. Those that are specifically designed for further developing and building on top of Cosmos enable easier smart-contract integration to marketplaces, games, social networks, and financial applications. 

Some of the notable ones include Band Protocol, Binance Smart Chain, Coinex DEX, Crypto.com, CyberMiles, Data, Ethermint, Kava, Lambda, Matic from the range of over 200 projects and applications that currently run on the Cosmos Network. 

But when it comes to product and feature that are specific to the Cosmos Network, they can be divided into two segments: 

Since the Cosmos Network is focused and built around interoperability in mind, it is perfect for every use case that needs seamless exchange of value and data. This is why it is perfect for Decentralized Financial Applications (DeFi) and all of its variances: Decentralized Exchanges, Lending, and Borrowing platforms Staking and so on. 

This would be different than the currently most known process of how DEXs work via an AMM or even with an order book. The closest thing to what Cosmos Tendermint can offer is an atomic swap. Still, unlike in the case of atomic swap where users have to be online to perform a transaction, the Tendermint protocol can ensure that zones in Cosmos can finalize transactions fast – for both exchange order transactions as well as IBC token transfers to and from other zones.

A second use case can enhance the scalability of the existing blockchains such as Ethereum by offering a bridge transaction. This bridge is similar to the way Cosmos Hub communicates with its parallel blockchains - zones. So the traditional blockchain can be bridged inside the Cosmos ecosystem and utilize its network to increase the transaction throughput. A "bridge-zone" on the Cosmos network keeps up with the Hub and the other cryptocurrencies. The indirection through the bridge-zone allows Hub's logic to remain agnostic and straightforward to other blockchain consensus strategies such as Bitcoin's proof-of-work.

While these are some use cases that utilize Cosmos Network’s main distinguishing features, some of the more standard ones would be building a wide range of decentralized applications for Gaming, Healthcare, Prediction markets, cross-border payments, and many more.