Cryptocurrencies as a whole are not new. Bitcoin, the first cryptocurrency, has been around since 2009. It was created as a decentralized currency without any government influence. Inspired by bitcoin, over 20,000 cryptocurrencies have been created as of July 2022.
One of those cryptocurrencies is avalanche, which uses the symbol AVAX. Even though the Avalanche platform is a relative newcomer, the coin already ranks #15 in terms of market capitalization, according to CoinMarketCap.
Read on to find out more.
What Is Avalanche Crypto?
The Avalanche platform and AVAX coin were launched in 2020 by Ava Labs. Avalanche is a smart-contract platform that uses a proof of stake protocol. Claiming to have the fastest, most secure cryptocurrency platform available, and having compatibility with Ethereum‘s blockchain, Avalanche will be tough competition for Ethereum.
In addition to that, anyone can use the Avalanche platform to create their own cryptocurrency.
Avalanche is designed to be a network of thousands of subnets to support a very stable coin. The idea is to have a diversified, decentralized interconnected network of blockchains made from many different people and places.
Quick Overview of Avalanche
Ava Labs stated on the second page of its whitepaper on the Avalanche platform that it intended to have Avalanche be an inclusive platform where anyone could connect to the network, while also being scalable, flexible, decentralized — and, most importantly, secure.
Avalanche is recognized as having one of the fastest transaction rates and being stiff competition for the Ethereum platform. It is a smart-contract platform, which means that developers can create self-executable programs that process buy and sell agreements, for example.
How Avalanche Is Different From Other Crypto Platforms
Avalanche is designed to compete directly with Ethereum. The latter was designed and released when far fewer people were using cryptocurrencies, so there were fewer transactions. It wasn’t an issue for the protocol to keep up with the transactions, but now Ethereum needs two layers layer to handle all the transactions on the platform.
Avalanche scales Ethereum’s capacity because it has three blockchains operating under one layer protocol. This significantly increases the amount of transactions Avalanche can handle at one time compared to Ethereum, and since it’s on one layer, it increases security as well.
Avalanche can achieve time to finality — the time it takes one transaction to process from beginning to being irreversible — in one second. This is compared to transactions on Ethereum’s platform taking as long as several minutes each. This also reduces the fees per transaction, since fewer resources are used.
As for use cases, one of the most impressive comes from Avalanche’s partnership with the consulting firm Deloitte to improve Federal Emergency Management Agency funding. Deloitte will use the Avalanche blockchain to support disaster relief programs.
How Do the Avalanche Platform and AVAX Coins Work?
Avalanche’s claim to fame is its three blockchains. Each blockchain has a job, rather than one blockchain to do everything.
How Are AVAX Tokens and Coins Created?
AVAX coins are the native tokens for Avalanche. Rather than using a proof of work algorithm to create the coin, as Bitcoin does, Avalanche uses a proof of stake algorithm. Proof of stake is less energy-intensive and potentially a more secure method of creating coins.
Proof of stake requires users to purchase a certain amount of coins — 2,000 AVAX for Avalanche — to participate in a consensus. These owners then become “validators” and are picked at random to receive the coin, rather than the competition-based mining of the proof of work algorithm. This algorithm uses less energy and is more accessible for people new to cryptocurrency.
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