What is Avalanche (AVAX)?

Avalanche is a blockchain platform that offers fast, low-cost transactions. It has similar capabilities to Ethereum: developers can use Avalanche to build decentralised apps (dApps) and even new blockchains. What sets Avalanche apart from Ethereum is its unique approach to Proof of Stake, which enables transactions to be confirmed much more quickly.

AVAX is the native token of the Avalanche blockchain. It is used to pay for fees and to secure the Avalanche network through staking. It can also be traded just like any other cryptocurrency.

How Avalanche verifies transactions

When a transaction takes place on the Avalanche blockchain, it gets verified by a small, random sample of validators – people who’ve volunteered to be part of the network by staking their AVAX

Through a process charmingly called “gossiping,” each validator from that sample then checks the transaction with another random sample of validators. And those validators check in with others, again and again, until the transaction has been verified by every validator on the network. A single transactional “snowflake” becomes an “avalanche” validated by the entire system – see what they did there?

Just like real-world gossip, information spreads very quickly throughout the network. Avalanche can reportedly process 4500 transactions per second, and it has a 2-second finality – meaning it only takes 2 seconds for any transaction to be confirmed irreversibly across the network. By comparison, Ethereum processes up to 30 transactions per second and takes up to 15 minutes to reach finality (though future Ethereum upgrades will aim to improve these speeds).

No matter the number of validators in the network, the outcome of the validation will be reached within the desired timeframe. This also makes the Avalanche network harder to attack: compared to Bitcoin, where you’d need to take control of 51% of the network to attack it, you’d need up to 80% of Avalanche’s validators to take it over.

A little more detail: blockchains and subnets

Another thing worth noting about Avalanche is that it’s comprised of three blockchains:

1. X-chain - for exchanging. This is where digital assets, including AVAX, are created, managed, or exchanged for other digital assets

2. C-chain - for creating and running smart contracts. Avalanche supports the same coding language as Ethereum, enabling the easy development of smart contracts and apps that are compatible across different blockchain networks

3. P-chain - for platform management. This is where validators are coordinated, and where people or organisations can create and manage subnets: customised blockchain networks with their own specialised sets of rules

Subnets are a powerful tool with lots of potential. Instead of organisations reshaping themselves to fit an existing blockchain, they can create a new subnet chain to fit their own needs and requirements. Subnets can be public or private, and each subnet can leverage the use cases of all three of Avalanche’s blockchains, while the rest of the network continuously validates the primary blockchains and the subnets.

Avalanche provides opportunities for businesses and developers across industries to create decentralised smart contracts and dApps, hosted privately or publicly, which are securely validated by the entire network at a lightning pace.