Altcoins: What Is Avalanche (AVAX)? A Deeper Look Into The Avalanche Platform | Rebecca Duthie

Altcoins: What Is Avalanche (AVAX)? A Deeper Look Into The Avalanche Platform | Rebecca Duthie

Summary:

  • What is the Avalanche Platform and how does it work?
  • Advantages of the Avalanche exchange.
  • Avalanche’s past, present and future price positions.

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The Avalanche Platform

The Avalanche platform is extremely fast, low-cost and eco-friendly. The Avalanche platform is an open, programmable smart contracts planform for decentralised applications (DApps). The Avalanche cryptocurrency rivals Ethereum, and its native token is AVAX. Avalanche prioritises transaction speed and scalability. In addition, the Avalanche network is a proof-of-stake (PoS) network.

The Avalanche platform was officially launched in september of 2020. The platform is built across three chains: the C-chain (contract chain) which hosts Avalanches DeFi ecosystem, X-chain (exchange chain) and P-chain (platform).

Through the launching of Ethereum's decentralised applications, (which confirm and instantly process thousands of transactions per second, which is far ahead of any decentralised platform today) it is possible to build fast, low-cost solidity-compatible dApps.

Avalanche has a maximum supply of 720 million AVAX tokens, with more than 271 million in circulation currently. Avalanche’s current market capitalisation is around $7.25 billion.

It is possible to launch private and public customised blockchains; these blockchains can be deployed to fit users own personal needs, dictate how the blockchain should operate and build their own virtual machines.

Users are able to scale to millions of validators even through using minimal hardware. Users can lock-up or stake their AVAX to help process transactions and further secure their platform (the security guarantees are well above the 51% standard). The hardware required to join the platform likely exists on your devices already.

The Avalanche platform has strong, rigid competitors such as Ethereum, the validators on the platform must stake 2,000 AVAX, careless or malicious validators do not get penalised on this platform.

Avalanches native token, AVAX

AVAX is used to secure the Avalanche network, to act as a basic unit of account amongst the blockchains in the Avalanche network and to pay transaction processing fees. Avalanches transaction fees are burnt. The AVAX token is used in staking (pledging crypto), to participate in the validation process and to help secure the blockchain.

Factors that make Avalanche unique:

  1. The rate of coin creation: Avalanche users decide how fast new coins are created. The users control the rate of coin creation by means of voting to change the amount of AVAX that is rewarded to those users who add new blocks to the Avalanche blockchain.
  2. Transaction fee structure: the transaction processing costs change depending on the type of transaction and Avalanches network congestion at the time. All fees are burned (removed from circulation) to enable AVAX to become more scarce over time. The AVAX transaction fees are changeable due to the fact that Avalanche users vote on the fee.
  3. Consensus mechanism: the transactions made on the Avalanche blockchain are confirmed through the use of a unique method that requires many small, random subsets of network participants in order to confirm transactions before they are finalised.
  4. Participation incentives: both high uptime and fast responses can boost the amount of AVAX rewards that a network participant can earn for processing AVAX transactions.

Advantages of Avalanches platform:

  1. Fast transaction processing time.
  2. Reward structure incentivises participation.
  3. The avalanche platform is capable of supporting many blockchain-based projects.
  4. The randomness of the consensus mechanism makes it a secure cryptocurrency. Avalanche claims that its platform supports stronger safety measures, therefore making the blockchain less vulnerable than other blockchains.

Where to buy AVAX

There are currently many top exchanges where users can obtain AVAX, such as Binance, OKX, CoinTiger and FTX.

Past, present and future prices of Avalanche

After the launch of the Avalanche network, the price took a few months to take off, and has since seen quite a lot of volatility. The price rose substantially in the second half of 2021 but has since fallen consistently.

Over the past few months, the markets have been facing strong investor risk-off sentiment in the wake of the geopolitical tensions, Covid-19 lockdowns in China and supply chain issues. The cryptocurrency market has followed the trends of the greater market during these times, therefore the price of most cryptocurrencies have been falling, Avalanche falls under this category.

According to some analysts the future price of AVAX could reach up to $268 by 2026. However, it is important to remember that this future price prediction is based solely on data and does not take into account factors such as investor sentiment and the ever changing market conditions, both of which make it difficult to make accurate future price predictions.

Altcoins: Avalanche (AVAX) What Is It? - A Deeper Look Into The Avalanche Platform - 1 AVAX Price Chart

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Sources: cryptonewsz.com, finance.yahoo.com, coindesk.com, investopedia.com, avax.network

Rebecca Duthie

Rebecca Duthie

Remote Editor and writer Intern
FXMAG.COM

Rebecca has a bachelors degree in Investment Management, a Post Graduate Diploma in Financial Planning and is currently enrolled in a Masters program in International Management with a Specialization in International Finance.