The cryptocurrency sphere is filled with potential and it’s not only for the creation of virtual assets as an alternative for financial sources. It also offers other digital services like smart contracts and decentralised apps (dApps) that many crypto enthusiasts can use for their transactions and investment activities.
When it comes to these advanced features, Ethereum comes to mind since the network dominates the industry. However, there are blockchain ledgers that are starting to rival that, which includes Avalanche cryptocurrency.
Find out what you can about this up and coming blockchain-crypto asset as you browse through BCT Post.
A scalable blockchain solution is the main focus of Avalanche when it launched in 2020.Despite its fledgling status in the crypto sphere, it quickly rose in popularity and surged with a market capitalisation around US$18 billion, with each token selling at a price of US$68 as of press time.
Prior its launch, Avalanche was introduced two years prior by a group of Cornell University researchers led by Kenvin Sekniqi, Maofan Yin and Emin Gün Sirer. The team released the fundamental research about the network protocol in 2018 on the InterPlanetary File System under the pseudonym ‘Team Rocket’.
By March of 2020, Ava Labs was launched and came up with a three-blockchain solution to address scalability issues of blockchains. The consensus protocol also became open-source during this time.
Avalanche’s initial coin offering (ICO) ended in July of the same year and then followed up by its launch in September.
The native token used by the network is called AVAX and can be used to pay for fees, staking and other governance protocol that the ledger might undertake.
There is a maximum supply of 720 million AVAX tokens available for mining with only 360 million available during the main net launch.
Subnetworks and proof of stake algorithm
Avalanche cryptocurrency is validated by subnetworks or subnet. This is a dynamic set of validators that work together to achieve a consensus on mining the blockchain for transactions.
An AVAX holder can to validate transactions by staking a number of AVAX tokens in exchange. This is called a proof-of-stake algorithm which is a much more viable option compared to Bitcoin’s proof-of-work validation and governance since it uses less energy consumption.
How the blockchain works
The three main problems of blockchains including Bitcoin and other proof of work networks is the lack of interoperability as well as issues involving scalability and usability. That’s the reason why Ethereum switched to a proof of stake protocol for a more scalable ledger.
However, Avalanche cryptocurrency took it further by providing a three blockchain solution. This allows a faster transaction rate that works well with activities involving smart contracts and dApps.
The network can process at least 4,500 transactions per second. This makes it one of the fastest smart contracts platforms in the industry, as so claimed by the makers behind Avalanche.
Avalanche has a unique approach to blockchain technology. Its network consists of three separate blockchains to fast-track the processes. These all work in parallel with each other with the idea that repeatedly doing random checks increases the probability of the transaction’s validity.
Here are the blockchains that make up the main net of the AVAX network:
The X-Chain blockchain is the ledger that’s used for managing assets. It makes use of the consensus protocol to help run and govern the whole network.
Smart contracts and dApps are managed on a separate blockchain called C-Chain so that transactions don’t bottleneck.
Validators are coordinated in a separate blockchain called P-Chain.
The snowman consensus protocol
Only the C-Chain and P-Chain uses this protocol. It works similarly with the proof-of-stake protocol but uses blocks in a chain-optimised consensus protocol with linear blocks for a totally ordered process.
All blockchains function with a key principle in mind: decentralisation. The difference between these ledgers lies in what they can offer when it comes to features and crypto solutions.
The network is highly scalable because of its three blockchain solutions. Since it can simultaneously process a maximum of 4,500 transactions per second, there’s no debating how fast the network is which is beneficial for smart contracts and dApps that require larger amounts of data to mine.
Only a few blockchains allow this kind of flexibility on their platforms that allow for interoperability and one of them is Avalanche. This means that different blockchains can exchange data with the AVAX network because of its interoperability feature.
Avalanche boasts robust and efficient security through cryptography. It makes use of classical consensus protocols that can withstand attackers of the network without compromising the structure of the blockchain.
Fast transactions with minimal fees
Because of its proof-of-stake consensus, the gas fees required by the ledger are comparably lesser than the Ethereum network. This, alongside its fast transaction, makes it a good choice for investors that priorises speed.
You can store your Avalanche assets in its built-in non-custodial wallet. This means that your digital AVAX tokens would be your sole property unlike when you purchase assets from custodial wallets from major exchanges.
It’s easy to access your wallet through the Avalanche platform. Since it is a cold wallet, you can open your account as long as you have an internet connection.
Users can see the latest block transactions of the AVAX network in Avalanche Explorer. This is easily accessible through the main website and it’ll redirect you to a page completely dedicated to tracking the transactions of the main net.
What makes it efficient and useful is its filtering capabilities so that users can customise the page depending on what they would need.
Users that participate in the staking process of the Avalanche network are given incentives through its reward structure. Nodes are rewarded with AVAX tokens that can be used as passive income or additional staking rewards that can be used in governance voting.
Where can you purchase AVAX tokens?
These tokens can be purchased through different exchanges that support AVAX including Binance, Gate.io, Uphold and Coinbase. You can also directly purchase it from the AVAX platform by creating an Avalanche wallet.
Bitcoin (BTC) $ 23,594.00 0.72%
Ethereum (ETH) $ 1,650.07 0.3%
Tether (USDT) $ 1.00 0.03%
BNB (BNB) $ 324.78 2.27%
USD Coin (USDC) $ 1.00 0.01%
XRP (XRP) $ 0.411718 0.68%
Binance USD (BUSD) $ 1.00 0.14%
Cardano (ADA) $ 0.402457 0.79%
Dogecoin (DOGE) $ 0.091680 3.34%
Polygon (MATIC) $ 1.19 1.01%
Expand your knowledge and invest in the cryptocurrency industry.