What is Avalanche Cryptocurrency and Should You Buy It?
Avalanche. The name itself has a ring to it, doesn’t it? If you’re into the crypto industry, you must’ve heard the name. Of course, that’s why you’re here as well. The fact that you know about Avalanche means you’re interested in making money with the network, whether be validating or investing.
In this post today, we’re going to go through all the benefits of Avalanche. We’ll learn how it works, how the staking works, and how to get started.
What Problems is Avalanche Targeting?
The basic idea of blockchain technology is pretty much the same across the board. Whether you’re talking about the Veteran Bitcoin or the rookie Dogecoin. Blockchain works the same way.
So, we’re going to see what the problems are that Avalanche is trying to solve. Otherwise, what’s the point of launching yet another blockchain.
In modern day cryptocurrency networks, there is a term of gas fees. Ethereum started it all with the concept of ‘gas’ that the developers have to pay to execute smart contracts. Needless to say that being an early adopter, Ethereum had to inflict high charges to the users.
That’s the first inefficiency Avalanche is trying to fix. The gas prices are very affordable on Avalanche when you compare it with Ethereum or any other network that uses gas.
When you shove too many cars on a narrow intersection, what happens? It creates congestion, right?
That was a massive problem for the previous generation of crypto networks. There were too many users and too few operating nodes. It caused scalability issues. As you tried to grow the network, the number of resources it takes will go up.
With Avalanche, you don’t face this issue. The entire protocol is designed with scalability as one of the primary characteristics in mind. There are multiple sub-networks under the main network that accelerates the transaction time for each smart contract.
Avalanche has shown promising numbers like 6,500 transactions in one second! That’s crazy fast. And it also means that you can get more work done. Hence, scalability is achieved.
It’s A Platform for the Platforms
There is a feature in Avalanche called the Bridge. It allows you to bridge between other cryptocurrencies and Avalanche. You can use the bridge to practically ‘bridge’ between your crypto assets. You can also make money from lending and borrowing.
The Benefits of Using Avalanche
The problem-solving features of the crypto we’ve discussed in the previous section are certainly promising. But they’re not unique to Avalanche. There are other crypto networks in circulation today that can achieve the same results.
So, what makes Avalanche special? Let’s find out.
Sure, what’s the big deal? Ethereum, Algorand, etc. platforms are also programmable. But the difference is that you’re stuck with the only language offered by those platforms. And in most cases, it’s a completely new language that you have to learn from scratch. And if you don’t want to, you need to pay someone to write the contracts for you.
With Avalanche, you get flexibility. EVM and WASM are two of the supported languages. The network was built on the very famous Go language.
The flexibility with the programming now allows businesses to create smart contracts and deploy DAapps without too much hassle.
More Complex DApps
If you’re familiar with crypto blockchains like Ethereum, you’d know that they allow deploying apps known as DApps (Decentralized Apps). With Avalanche, developers get a more complex ruleset.
Developers are now free to develop regulatory-compliant assets. All of the parameters about handling and trading of the assets are included in the code.
A Deflationary Approach
This is probably the feature to set Avalanche different from the rest of the bunch. It’s a deflationary network. It means all of the fees collected for transactions and contract executions as AVAX (the token) are burned. Burn means the destruction of the tokens!
It’s done to keep the number of tokens controlled. This approach has allowed the transactions and minting processes to be done faster. Validators don’t have to spend nearly as much time competing with other nodes.
The Avalanche Consensus
Consensus protocols are an integral part of the crypto concept. Up until 2018, all crypto blockchains that came to life used the Nakamoto consensus. It’s a modified version of the classic consensus by Satoshi Nakamoto, the introducer of Bitcoin!
The Nakamoto consensus is the phenomenon that gave birth to the proof of work concept. Later, it was modified as proof of stake to reduce energy requirements for the mining/minting process.
With Avalanche consensus, the Delegate proof of stake concept is used. It is more efficient and faster than both proof of work and proof of stakes.
In the Avalanche protocol, validators (nodes) secure the network first and then approve the transactions. The requirements for the consensus are very few. It’s also a great way to ensure decentralization in the network as well.
How to Trade Avalanche
If you’re positive about trading and investing in Avalanche, your first destination should be the reputed crypto exchanges. Names like Binance, Gate.io, Huboi come to the top of our minds. You can buy AVAX using either Fiat currency or any other cryptocurrencies you may have.
Then, you’ll need a wallet. You can either use a hardware wallet or a software wallet. Our recommendation is to use a hardware wallet for the added security. It makes sense if you’re planning to buy AVAX for a long period.
Getting into the crypto market has become exponentially harder and intimidating in the last few years. The industry has grown rapidly! That’s why we’ve created this guide on Avalanche. We’re doing this with multiple other cryptocurrencies as well.
So, you can read our other guides if you’re done here. Reading all of them and comparing the benefits will help you determine which crypto network would work best for your investment.