Avalanche is a decentralised network that has been dubbed the “blockchain for blockchains.” The system runs on its own blockchain but may accept other cryptocurrencies and blockchain technologies onto its network. Avalanche is viewed as an Ethereum alternative, and with Ethereum’s ever-increasing transaction costs, the AVAX token’s value has skyrocketed.
AVAX is the platform’s native cryptocurrency, and it is used for payments, incentives, and governance on Avalanche. On its blockchain, the platform aims to digitise every sort of asset, including other crypto assets, equities, art, and commodities.
Avalanche is a system that functions in the field of decentralised finance (DeFi). The DeFi sector aims to replace centralised banking processes with blockchain-based code known as smart contracts. Smart contracts are distinct from regular code in that they may store crypto assets in escrow on the blockchain without the need for a centralised custodian.
Avalanche is unique in that it is the only DeFi platform that completes transactions in under a second. It also links to numerous blockchain networks, giving its users access to platforms on prominent blockchains like Ethereum.
Blockchain technology is powered by two methods: proof of work and proof of stake. Proof of work provides computational power to cryptocurrencies such as Bitcoin and Ethereum via a distributed network of computer nodes. The biggest drawback of proof of work is its limited transaction volume and expensive transaction fees.
Proof of stake secures transactions on the blockchain by utilising validator nodes that have a financial stake in the coin. These blockchains are far more scalable and efficient than proof-of-work blockchains. Avalanche’s blockchain operates on a proof-of-stake mechanism, allowing transactions to take place in seconds for a fraction of the cost of a proof-of-work blockchain.
After obtaining $60 million in private and state financing in August 2020, Ava Labs launched Avalanche’s mainnet in September 2020. Adreesen Horowitz and Polychain Capital are among the venture capital companies that have invested in Avalanche.
The initiative was formed by a group of three co-founders, the most renowned of whom being Emin Gün Sirer. Sirer is a Cornell computer scientist who has been working on Bitcoin scalability improvements since the cryptocurrency’s inception.
To acquire the token, you must first open an online account with a crypto brokerage that offers AVAX. If you just have a Coinbase or Gemini cryptocurrency exchange account, you’ll need to open another account with a different exchange because these platforms don’t enable AVAX trading.
Binance, Huobi, and OKEx are among the exchanges that accept AVAX. Similarly to stock exchanges, you will be required to disclose personal information to the site for tax purposes. When you create an account, you must submit your full name, address, Social Security number, and birthday.
Cryptocurrency wallets allow you to securely store your digital assets. Because you can’t trade cryptocurrencies from most crypto wallets, you should only keep your crypto on an exchange if you’re actively trading it. Because exchanges are significantly more vulnerable to hacking than wallets, it is suggested that you keep your cryptocurrency in either a hardware wallet or a software wallet.
Software wallets are computer applications that allow you to keep your bitcoin safely. These can be computer programmes or mobile applications, and there are several software wallets available on the market. The majority of software wallets are free, and some even let you to earn interest on your bitcoin investments.
Hardware wallets are physical devices that store cryptocurrency in a secure location. These are the most secure ways to keep your cryptocurrency, and they are unavailable to online hackers – the only way to access your assets is through the physical device.
After deciding on a cryptocurrency wallet to put your assets in, you must submit a buy order on a cryptocurrency exchange to purchase AVAX. Depending on the amount you wish to pay for AVAX, you can put your buy order as a market order or a limit order. If you place a market order, you will buy AVAX at the current market price.
However, with a limit order, you will only buy AVAX at a specific price, and if the price goes below that level, your order will be completed. You can cancel a limit order at any time before it is filled if you change your mind.