Avalanche (AVAX) – All you need to know
What is Avalanche?
A platform where developers can build applications that serve the financial markets. It’s like an alternative form of the internet, where Avalanche provides the base layer for apps to run on top of. Its cryptocurrency is known as AVAX and can be staked on the platform to earn interest.
Avalanche is designed to challenge the dominance of Ethereum as a building block for decentralised applications. Rather than being controlled by a single company or hosted by a single data centre, it’s run and owned collectively by its users, which makes it more secure and transparent than traditional, centralised, systems.
The Avalanche network launched in 2020 and has a focus on the financial world. The idea is that anyone can easily create an application where you can perform personal finance or investing tasks, such as buying stocks, earning interest, or taking out loans, and all these applications can talk to each other.
How does Avalanche work?
By using three blockchains simultaneously. A blockchain is like a public ledger that stores a history of every transaction, and Avalanche uses three so that it can process these transactions faster and offer as much flexibility as possible to developers.
Where Bitcoin and Ethereum are only able to handle a limited number of transactions every second (about 10-20), Avalanche can handle about 4500. Speed has always been one of the biggest barriers to blockchain technology being used more widely, and Avalanche, along with other platforms like Polkadot and Algorand, aims to remove it.
The other key benefits to its multi-blockchain design are that it can interact with other platforms, such as Ethereum itself, and create custom ‘rules’ for different parts of the network. That is particularly important for widespread financial adoption, because there might need to be different regulations for people accessing it from different countries, for example.
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