in some ways STEP (GMT -2.69%) has been one of the standout success tales for the crypto group in 2022. Since its launch in March, STEPN is up roughly 320% for the 12 months. What makes STEPN stand out is that it pioneered a completely new idea: move-to-earn gaming. Until this 12 months, for those who had instructed somebody that you can earn crypto by shopping for a pair of digital sneakers on-line after which going out for a stroll in your neighborhood, folks would have thought you had been loopy. But the concept was so novel that traders instantly grasped its significance.
So what is likely to be the same sort of idea that can captivate the crypto group subsequent? This must be extra than simply “the subsequent sizzling non-fungible token (NFT) mission” or the “subsequent large meme coin.” This must be an enormous, macro storyline that impacts the complete blockchain and crypto trade and galvanizes traders to suppose large about crypto in 2023. One such storyline is likely to be the “Internet of Blockchains” idea from Cosmos (ATOM 3.58%).
What is the Internet of Blockchains?
One large downside the blockchain and crypto trade faces proper now’s interoperability, and that is precisely the downside that Cosmos is attempting to resolve. Quite merely, totally different blockchains have a tough time speaking to one another. Sending digital belongings from one blockchain to a different blockchain can typically be unnecessarily advanced or costly. So Cosmos is attempting to grow to be the blockchain that helps cryptos speak to one another. It is asking its method the “Internet of Blockchains.”
Image supply: Getty Images.
The idea of interoperability may sound easy and apparent, besides that it is not. Most folks do not understand how troublesome it’s to change information and digital belongings (reminiscent of NFTs) throughout blockchains that aren’t suitable. It can be as if two folks couldn’t talk as a result of they’re utilizing telephones with totally different cellular working methods. Or take into consideration two folks not having the ability to ship electronic mail messages to one another as a result of they’re utilizing totally different electronic mail shoppers.
Interoperability is a urgent technological challenge proper now, and that is why the Internet of Blockchains method might be so big for Cosmos if it manages to resolve this downside. Using the Inter-Blockchain Communication (IBC) protocol, for instance, two totally different blockchains can seamlessly change information and belongings. Using the Cosmos software program growth package (SDK), blockchain builders can simply create app-specific blockchains that plug into the Cosmos ecosystem. Some of the highest-profile blockchains in the world — together with Cronos (CRO -3.16%)which is the blockchain for Crypto.com — have been constructed utilizing the Cosmos SDK.
The Cosmos funding thesis takes off
One cause I believe the story of move-to-earn gaming took off this 12 months is that it was a simple idea to know. You did not have to know something about blockchain structure or crypto governance tokens to know {that a} enjoyable gaming expertise that may additionally make you cash. This made for an extremely enticing funding thesis for placing cash into STEPN.
So it was attention-grabbing that, in August 2022, New York-based funding supervisor VanEck put out a $140 worth goal for Cosmos, primarily based largely on the idea of blockchain interoperability. This, of course, raised so much of eyebrows, provided that Cosmos is at present buying and selling at solely round $15. What did these cash managers in New York know that almost all retail traders didn’t? All of a sudden, YouTube crypto influencers began to publish movies on-line about Cosmos on the brink of explode in 2023.
Can Cosmos actually grow to be the subsequent STEPN?
Now, this isn’t to say that Cosmos goes to grow to be the subsequent STEPN. Cosmos remains to be comparatively tiny, with a market capitalization of a bit of greater than $4 billion, and many individuals have in all probability by no means heard of it. And there are a lot of different developer communities additionally engaged on the idea of blockchain interoperability, so there’s lots of competitors for Cosmos.
However, primarily based on our collective expertise round move-to-earn gaming, it’s potential to see how an extremely excessive idea crypto can grow to be “attractive” if individuals are earning profits from it. Could the similar factor occur with Cosmos? Over the previous 30 days (about the time of the VanEck report), Cosmos is up about 30%.
For now, I’m taking a wait-and-see method with Cosmos. I nonetheless have to dig extra into the technical specs of Cosmos. But I’m positively paying consideration now that Cosmos ranks as one of the top-performing altcoins of the previous month. I’ll be trying out the upcoming Cosmoverse 2022 convention in late September and placing Cosmos on my watch checklist for the the rest of the 12 months.
Dominic Basulto has no place in any of the shares talked about. The Motley Fool has positions in and recommends Cosmos. The Motley Fool has a disclosure coverage.