What Is the Avalanche (AVAX) Blockchain?
Hannah Scherwatzky / ONE37pm
Although many NFT and crypto enthusiasts enjoy the Ethereum blockchain, we all wish for lower gas fees and quicker transaction times. Well, our wishes have been answered by the Avalanche blockchain.
Avalanche (AVAX) is the fastest smart contracts platform in the blockchain world, as measured by time-to-finality. Avalanche is an open, programmable smart contracts platform for decentralized applications.
Curious to know more about Ethereum's competitor? Continue reading below to learn more about the Avalanche blockchain.
What is Avalanche (AVAX)?
Avalanche is a smart contract capable blockchain that focuses on interoperability, scalability, and usability. Often the Avalanche blockchain is referred to as Ethereum’s rival blockchain, due to its smart contract capabilities.
The Avalanche blockchain delivers a scalable blockchain while still maintaining decentralization and security, and emphasizes lower transaction costs, quick transaction speeds, and being environmentally friendly.
Avalanche is powered by its native token AVAX and several consensus mechanisms. The cool thing about Avalanche is that users can create their own interoperable blockchain, and all that is required to do this is a subscription fee.
How does Avalanche blockchain work?
Many modern-day blockchains like Bitcoin and Ethereum are plagued with a lack of interoperability and problems with scalability and usability. That’s why Avalanche’s mainnet uses three different blockchains to solve this problem.
C-Chain: This chain uses what is called the Snowman consensus protocol and is used to create smart contracts.
P-Chain: This chain is used to coordinate validators and also uses the Snowman consensus protocol.
X-Chain: This chain is used to manage digital assets and uses the Avalanche consensus protocol.
The Avalanches’ consensus protocol’s main purpose is to check validators’ transaction confirmations at random, by enabling all nodes to work parallel with each other. Essentially, repeatedly doing random checks increases the likelihood of a transaction being true.
The Snowman consensus protocol works similarly to Avalanche's protocol but uses the blocks in a linear process.
What is Avalanche (AVAX) crypto used for?
AVAX serves as Avalanches’ native utility token. In other words, AVAX is the main currency used on the Avalanche blockchain for things like transaction fees, incentives, and many other use-cases.
The native cryptocurrency is also used for staking AVAX, which secures the blockchain network. As a reward, stakers are given more AXAV—and in some cases—will even earn passive income as a result of staking.
Is the Avalanche blockchain safe?
Overall, the Avalanche blockchain is considered to be safe due to its proof of stake protocol, with nearly $10 billion of staked value securing the network.
However, the DeFi platform Vee Finance which utilizes Avalanche has been exploited twice, with the most recent attack resulting in $35 million of stolen ETH and Bitcoin.
Benefits of Avalanche blockchain
Avalanche allows different blockchains to share data and various types of cryptocurrency effectively interoperating with one another.
Compared to a blockchain like Ethereum, Avalanche was built to be scalable and executes sub-second transaction times along with impressive processing capacity.
The Avalanche blockchain provides a platform that can easily incorporate new technology and software in various applications and use-cases.
- Low fees
Many people consider Avalanche to be one of Ethereum’s main competitors, and with that, Avalanche loves boasting fees as low as $0.12 for creating and minting assets. Compared to Ethereum, Avalanche blockchain fees blow Ethereum fees out of the water.
Avalanche vs. Ethereum
Currently, the main difference between Avalanche and Ethereum blockchains is that AVAX uses a proof of stake protocol, whereas ETH uses a proof of work.
Also, Avalanche has faster transaction speeds of around 4,500 transactions per second (tps), compared to Ethereum's 15 tps maximum. However, Ethereum is in the process of upgrading to its own proof of stake protocol as we speak.
It’s hard to say for sure if the Avalanche blockchain will continue to scale to be something great, but as we know it today, Avalanche shows real potential to be a competitor in the blockchain industry. With its incredibly fast transaction speeds and low costs, it gives the current Ethereum network a run for its money.
Curious about how to do your own research when it comes to buying crypto? Make sure to check out our article that teaches you all you need to know about doing your own research.
While you're at it, you might benefit from learning about one of the safest and most effective investment techniques in crypto, called dollar-cost averaging.
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