One of the things to know in the crypto world is consensus. As for crypto networks, consensus is a critical process to get agreement regarding the status and state of the network.
In the context of crypto assets, for example, Bitcoin, Ethereum, and many other cryptocurrencies, consensus is needed to validate and confirm user transactions. Among the popular consensus to know is Avalanche.
Avalanche is an alternative consensus protocol developed to increase crypto network scalability, security, and transaction speed. The protocol was first introduced in 2018 by a research team led by Emin Gün Sirer.
The approach used by Avalanche is unique because it combines elements of traditional Proof of Work (PoW) and Proof of Stake (PoS) protocols with a new approach called Avalanche Consensus.
So, to understand more about what Avalanche is, its history, how it works, its advantages, and how it differs from other networks, see the following review.
What is Avalanche?
It should be noted that the main concept of Avalanche, namely creating a consensus protocol that allows crypto networks to reach consensus quickly, securely, and efficiently in a decentralized environment. Meanwhile, the main goal of Avalanche is to increase transaction speed, scalability, and security, while maintaining a high degree of decentralization.
Avalanche means its uniqueness differentiates it from traditional consensus protocols such as PoW and PoS, starting from transaction speed, 51% security against attacks, scalability, and adaptability.
On the other hand, when compared to traditional consensus protocols, namely PoW Proof of Work (PoW) and Proof of Stake (PoS), Avalanche is an innovative and attractive consensus protocol focusing on speed, scalability, and security in crypto networks.
Its distinct and unique approach offers the potential to improve performance and efficiency in the blockchain and crypto world. Avalanche also stands out regarding transaction speed compared to PoW and PoS because it allows for fast confirmations.
History of Avalanches
Historically, Avalanche launched in September 2020. A computer scientist from Cornell University, Emin Gün Sirer, initiated this. This project was first incubated at Cornell University.
Emin Gün Sirer is known to have led the research, assisted by Maofan Yin and Kevin Sekniqi. Then, this research continued with establishing a technology company Ava Labs which aims to develop alternative blockchain technologies for the financial sector.
For information, Ava Labs has received injections from venture capital firms Andreessen Horowitz, Initialized Capital, and Polychain Capital, as well as angel investor Balaji Srinivasan—former Chief Technology Officer of Coinbase and Naval Ravicant—who previously invested in Uber and Foursquare.
How Avalanche Works?
Before getting into how it works, remember that Avalanche has the advantage of being able to process transactions quickly. This is possible because the Avalanche architecture was developed with three separate blockchains with different functions, namely Exchange Chain (X-Chain), Contract Chain (C-Chain), and Platform Chain (P-Chain).
The X-chain is a special blockchain to support the creation of digital assets in the Avalanche ecosystem. C-Chain is an Ethereum Virtual Machine (EVM) compatible blockchain that allows developers to develop decentralized applications (dApps) just like the Ethereum blockchain but with the advantages of faster transactions and lower transaction fees.
On the other hand, its compatibility with the Ethereum toolkit has made it easy for developers to port dApps built on Ethereum to Avalanche. The proof is that the number of various applications that utilize Avalanche technology has skyrocketed quickly.
Until now, several applications have taken advantage of Avalanche’s technology, including decentralized exchanges, lending applications, and stablecoins (Bilira, the Turkish Lira stablecoin).
Next, there is the P-Chain, the metadata blockchain in Avalanche that coordinates validators, keeps track of active subnets, and allows the creation of new subnets.
For information, a subnet/subnetwork is several validators working together to reach a consensus on the state of blockchains. At the same time, each blockchain is validated by exactly one subnet. Subnets can validate multiple blockchains, and a node can be a member of multiple subnets.
Advantages of the Avalanche Protocol
The Avalanche protocol’s main advantage is increased transaction speed and speed. This can be realized through a probability voting approach that allows the network to reach a consensus quickly and efficiently.
The advantages of transaction speed in the Avalanche protocol can be traced from several things, including instant transaction confirmation, high scalability, cost efficiency, tolerance for bad networks, and a better user experience.
Avalanche Consensus Protocol Differences and Other Networks
The main difference between Avalanche and other decentralized networks lies in the network’s consensus protocol for validating transactions. Avalanche is known to have fought against the view that a network cannot provide security and scalability without sacrificing decentralization.
Please note the Avalanche protocol uses a new approach to ensure security with fast results and high throughput. Uniquely, everything can happen without sacrificing decentralization.
In addition, Avalanche also combines the classic consensus that focuses on speed, scale, fast finality, and energy efficiency with the Nakamoto consensus (on the Bitcoin blockchain), which prioritizes security and decentralization.
Crypto projects on the Avalanche ecosystem
After knowing the difference between the Avalanche consensus protocol and other networks, it’s time to get to know the crypto projects in the Avalanche ecosystem. Here are some of them you need to know, namely:
1. Decentralized exchanges
Several decentralized exchanges (DEXs) or applications that facilitate the exchange of one token for another using smart contract technology are currently known to be under the auspices of Avalanche. Some of them are Sushiswap, Paraswap, Pangolin, and Trader Joe.
2. Yield optimizer
In the Avalanche ecosystem, several yield optimizer applications or automated services help users get maximum returns from crypto investments. Well-known examples, among others, are Snowball, Yield, and Yield Yak.
3. Borrow, borrow
In the Avalanche ecosystem, several lending and borrowing applications based on blockchain technology are also operating, one of which is AAVE. In this AAVE application, users can deposit crypto assets to earn interest and borrow other crypto assets.
4. Buy NFTs
Furthermore, Avalanche is also known to host several NFT marketplaces, including Kalao.io and NFTrade.
5. Portfolio Management
In the Avalanche ecosystem, there is also a portfolio management and tracker application for dApp users, including Markr, and a DeFi wallet that can manage portfolios, such as DeBank.
What Can You Do with Avalanche?
Please note that on the Avalanche platform, the native token used here is AVAX. Being the default token of the Avalanche platform, AVAX has various functions on this blockchain network, including for staking and being the currency for dApps transactions.
Users can use Avalanche to stake their assets and validate transactions on the crypto network. When an AVAX owner stakes his token to secure Avalanche, he will receive an incentive reward.
One platform that also provides crypto staking features like Avalanche is INDODAX. Through INDODAX Earn staking crypto, users can lock up their crypto assets by saving money in a savings deposit. Later, the crypto assets locked in INDODAX Earn will generate rewards.
Currently, the INDODAX Earn staking crypto feature can be accessed easily anytime and anywhere via the Mobile App or the desktop on the INDODAX website, namely on the INDODAX Earn staking crypto page.
How to Buy Avalanche Crypto Asset?
If you are interested in investing in Avalanche, you can buy Avalanche crypto assets (AVAX to IDR) through the best crypto trading application, INDODAX.
Through INDODAX, you can buy AVAX tokens safely and, of course, easily. Not only the AVAX token, at INDODAX, there are also various other crypto assets that you can choose as investment tools/instruments.
Besides that, you don’t need to worry about making purchases because INDODAX has been regulated and supervised by the Commodity Futures Trading Regulatory Agency (Bappebti), so safety is guaranteed.
In conclusion, Avalanche is an important consensus protocol because it can overcome some main challenges in blockchain and crypto technology, mainly related to efficiency and security.
This is inseparable from several uniqueness distinguishing it from traditional consensus protocols, such as PoW and PoS, including transaction speed, security against 51% attacks, scalability, and adaptability.
Furthermore, the Avalanche protocol is expected to bring the potential to provide positive changes to the blockchain and crypto industry. The continued development of technology and innovation in this ecosystem will likely lead to accelerated adoption of blockchain and crypto technology in various sectors of life.