What is Avalanche (AVAX) Coin | Is Avalanche a good crypto? | Complete Guide

Avalanche Coin
Image Source: Medium

If you’re interested in blockchain technology, you’ve probably heard about Ethereum. Ethereum has established itself as a leading project that facilitates the building of smart contracts and decentralized applications (dApps) using its Solidity programming language. 

What if I told you there’s another project that supports Ethereum blockchain smart contracts and dApps at a reasonable cost and at a rapid speed? I’m going to discuss that project today.

I’ll discuss Avalanche Crypto and the AVAX coin. It all started as a platform for platforms. It adds scalability and interoperability to the equation. Now I’ll go into greater detail regarding this project and bring you to a price projection.

What is the Avalanche Crypto project? 

Avalanche is a scalability and interoperability-focused open-source decentralized blockchain project. It functions similarly to Polkadot and Ethereum, but at a much faster rate and at a lower cost.

The project’s mainnet was launched in 2020, and it claims transaction finality in less than one second. Don’t take my word for it. Have a look at the image. This is the Avalanche website’s comparison chart, which compares Bitcoin, Ethereum, Polkadot, and Avalanche.

Comparisions between blockchains
Image Source: Google Images

The properties of Avalanche are plainly seen when compared to Polkadot, Ethereum, and Bitcoin. As you can see, the transaction takes less than 2 seconds to complete. So this is the only or first blockchain that claims to be able to complete transactions in one second. That is the quickest blockchain currently available.

Then there’s throughput, which averages around 4500 transactions per second. It has a transaction rate of 4500 transactions per second. It also promises to be a green blockchain, implying that it is CPU-friendly.

When I discuss the advantages of Avalanche crypto, I’ll go over this subject in further detail. 

What is Avalanche Coin AVAX

Avalanche Token is a token that represents an avalanche. AVAX is the Avalanche blockchain’s native currency. You have Ethereum ETH and Solano SOL tokens, for example. 

It accomplishes the same objective. The main characteristic of this coin, which is present on the Avalanche blockchain, is that it contributes to the network’s security. It also aids in the payment of the transaction fee.

After that, it helps in the reward of network validators, and finally, it assists in governance. These are some of the features of the AVAX coin.

One thing to keep in mind regarding AVAX Coin is that it is a deflationary currency. This means that every time a transaction is made on the network, AVAX is burned. Additionally, while building a blockchain or custom subnets, or when paying the gas fee.

How does Avalanche work?

Avalanche combines the best of both worlds, namely Classical consensus, and the Nakamoto protocol.

How does Avalanche work?
pic credit: Google Images

As you can see in the image above, it combines two of the best consensuses, Classical and Nakamoto, to make Avalanche, which is scalable, robust, decentralized, low latency, green, and sustainable.

The Snow family of protocols is a sort of consensus protocol. So, how exactly does the Snow protocol work? Let me demonstrate by displaying the graphic below.

Avalanche Snow Protocol
pic credit: Google Images|Youtube

The Snow Protocol validates a transaction by deploying a small subset of validators that the initial validator selects. As a result, the first validator identifies the transaction in the pipeline. 

Following the selection of validators, subsets react to whether or not the transaction is valid; each validator has his or her own opinion on whether or not a transaction is valid.

Now, if a high number of validators agree to validate a transaction, it will be entered into the system and acknowledged by the blockchain. Even if a validator raises concerns about the same transaction in the future.

The same is true the other way, which implies that if a big group of validators rejects a transaction, it will never be approved in the system. Even if a validator later raises a validation error. The entire procedure may appear to be difficult and time-consuming. The network, on the other hand, validates this procedure in a matter of seconds, and that too inside two seconds.

What if there is a conflict between the validators, you might ask. Half of them are in favor of the transaction, while the other half are against it. As a result, in such a circumstance, the final decision must be made by the system’s honest validators.

They will determine whether the system will approve or deny the transaction. That is how the Snow protocol works.

Avalanche Architecture

As a result, the Avalanche blockchain is built on three different types of blockchains, each of which is connected to the main blockchain via the primary network or primary subnet, and which is used to validate transactions on the blockchains.

This reminds me of the relay chains found in the Polkadot ecosystem. If you’re not sure what a subnet or subnetwork is, look up the definition of subnets below in the Avalanche Whitepaper.

Subnets
Image Source: Avalanche  Whitepaper

Now, let me briefly go over the three different types of blockchains. The Avalanche blockchain is made up of three different types of chains that each perform a particular function.

Primary Network
Image Source: Avalanche Docs

The first is the X Chain, which stands for Exchange Chain. X Chain is a rules-based platform for creating and trading digital assets. It’s similar to trading stocks and commodities on the open market, and AVAX is one of the digital assets used to pay for transaction fees on this blockchain.

Then there’s the platform chain or P Chain. The network’s subnets are maintained by P Chain. Users can utilize the P Chain API to create subnets, a new blockchain, and validators for subnets.

The contract chain, or C-Chain, comes next. The C-Chain API supports and facilitates the creation of smart contracts. C-Chain includes Ethereum Virtual Machine (EVM) instances. Remember, Ethereum Virtual Machine is the infrastructure on which Ethereum developed dApps and Smart contracts can run.

That is the Avalanche blockchain’s power. By using Ethereum Virtual Machines, it is able to run Ethereum programs on its blockchain, similar to running a Windows operating system on a MacBook using virtual software.

Avalanche is capable of constructing new chains and virtual machines in addition to these three blockchains. As a result, this functionality attracts developers that want to establish and build various dApps and blockchains with whatever logic they want.

Remember that Avalanche is compatible with Ethereum’s Solidity programming language.

ICO of Avalanche Token

As a result, Avalanche was able to raise $42 million in under 5 hours by selling tokens for $0.50 each. If you own Avalanche cryptocurrency, you must have bags full of cash by now if you bought it during the ICO. It recently hit the $100 level.

What are the benefits of Avalanche blockchain?

1. When I think of Avalanche, the first benefit that comes to mind is transaction finality. In less than 2 seconds, it may confirm a transaction. Despite the fact that it promises to be 1 second. 

Furthermore, it has a transaction per second (TPS) of 4500, which is extremely impressive for the time being. Solana Blockchain, on the other hand, has a TPS of 65,000 transactions per second.

2. The ability to be interoperable is the second advantage. As you can see, Avalanche has quickly become one of the most popular platforms for developing and deploying dApps and smart contracts on the Ethereum blockchain.

Because Avalanche supports Solidity, developers can move their dApps from Ethereum to Avalanche and operate in a more cost-effective and faster environment than Ethereum 1.0.

Unless Ethereum 2.0 is released, Avalanche has a significant advantage over the Ethereum blockchain. Avalanche was able to scale quicker than predicted thanks to the use of EVM, or Ethereum Virtual Machines. That is why, at the time of writing this piece, it had surpassed the $115 level.

3. The next advantage that comes to mind is that it is energy efficient. Yes, the blockchain is CPU optimized, which means that when there are no transactions on the network, the network goes into dormancy and waits in a low-energy state, saving power and consuming less energy.

4. Low transaction fees are the next advantage. In comparison to other blockchains, you must pay a relatively low price to construct a blockchain, pay transaction fees, and create custom subnets. If you want to examine the costs that the blockchain charges, you may look at this list that I’ve published right below, which was taken directly from the Avalanche documents.

Avalanche Fee list
Image Source: Avalanche Docs

That summarizes the advantages of the Avalanche blockchain.

Drawbacks of Avalanche blockchain

At the time, I haven’t discovered any serious drawbacks to the Avalanche blockchain, but there has been recent news about its DeFi uses. The Avalanche Blockchain-based program has been hacked several times, which is a cause for concern for the Avalanche ecosystem.

VEE financing was the subject of a well-known Avalanche hack. The hackers took about 215 bitcoins valued at over $35 million and a little over 8000 Ethereum worth $26 million. When it comes to the DeFi platform built on Avalanche, this is one of the devastating hacks.

This was insufficient. Another hack occurred prior to the VEE Finance hack, and it was on Zabu Finance, an application based on the Avalanche blockchain once again.

These two incidents have severely harmed Avalanche’s reputation. As a result, Avalanche has a lot of work ahead of it in terms of promoting its ecosystem, which includes other blockchains. That takes us a little further down the road of disadvantages.

Price Prediction of Avalanche blockchain

Now comes the part you’ve been waiting for: the Avalanche blockchain price prediction. At the time the article was written. Avalanche has already surpassed the $150 per token mark. Consider the returns made by an investor who acquired Avalanche for $0.50 per token during the ICO.

Avalanche has a unique feature in that it can handle decentralized apps (dApps) and smart contracts created on the Ethereum blockchain. In addition, it is similar to Polkadot in that it may create blockchains within its network.

It competes with Ethereum, Polkadot, and Solana by providing interoperability and scalability characteristics within the network.

The project has a lot of potentials, but only time will tell how far it can go. At the present, I’m highly bullish on Avalanche blockchain, and I predict it will rise above $200 in the future bull market. 

That is my opinion on this project and the expected price of this blockchain. What are your thoughts on Avalanche? Leave a comment below and tell me what you think about this project.

That concludes my proficiency analysis of the Avalanche blockchain.

Disclaimer: The cryptocurrency market has a high level of volatility. This post’s content is solely for educational purposes. Only invest once you’ve done your research and reached a final decision.

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