The Ethereum network has increased its use cases in recent years, with decentralised finance (DeFi) and Non-fungible Tokens (NFTs) becoming more accessible. While the developments have been great for the ecosystem, it has come with various challenges such as network congestion that have led to high gas fees. That is where Avalanche comes in.
What is Avalanche?
Avalanche is a blockchain ecosystem designed to function as a secure, globally distributed decentralised network. It comes with sub-second transaction times and extremely low transaction fees. The project seeks to create a platform that allows for interoperability and a trustless framework for building blockchains. It also offers payment solutions through its native token (AVAX).
The project had one of the most successful capital funding rounds having raised $18 million from a number of companies like Polychain Capital and Andreessen Horowitz. The token also raised more than $42 million in less than 4.5 hours following its launch in July 2020.
Avalanche seeks to solve a range of challenges in most blockchains today. It looks to ensure decentralisation by providing an alternative to the major networks like Ethereum. This it does by coming up with better features, functionalities and programmability.
With sub-second transaction speeds, it works best for scalability. The lower transaction fees also make it more affordable to use.
How does Avalanche Work
Avalanche uses a triple-blockchain system for conversion and development simplification. Given it is a recent blockchain project, it has the benefit of employing the best features of the earlier projects while improving on their shortcomings. It has robustness, scale and decentralisation while also employing speed, quick finality and energy efficiency.
Avalanche uses a novel proof-of-stake consensus mechanism which helps it achieve its massive transaction speeds. It then reduces the network congestion through the use of a segwit-like protocol.
The Avalanche network has multiple chains with each operating as an independent virtual machine while supported with the other custom virtual machines like WASM and the EVM. This allows the chains to have specific use cases within the network.
The network has a subnet that allows for the deployment of the various chains. It is where the various validators ensure all the transactions meet network consensus.
AVAX Staking
The Avalanche network allows users to stake and earn rewards in the form of AVAX. Unlike other crypto networks, the Avalanche network does not have massive computer system demands. With a 4 GB Memory, dual-core processor, and 40 GB SSD computer, you can operate as a validator in the network.
Any validator must hold more than 2000 AVAX. While the validators are free to validate any subnet, they must also work on the primary network.
Trading AVAX
AVAX is a popular cryptocurrency available on all major crypto exchanges such as CoinSpot, Coinbase, BTC Markets and Swyftx. But if you’re in Australia, CoinSpot is a top-notch choice as it supports over 370+ cryptocurrencies and competitive trading fees compared to other poorly rated exchanges like Swyftx. You can read our Swyftx review to be aware of the red flags with this exchange.
For storage, you will opt for a hardware wallet for long-term holding. The ideal options are the Ledger Nano and Trezor.
