What Is Avalanche? Should You Invest In AVAX And Where To Buy It?

Last Updated October 14th 2022

20 Min Read

There are several cryptocurrencies out there that can change your life. Some of these cryptos are not just stores of value – they are native currencies of important blockchains and cryptocurrency platforms that solve real problems within the digital currency universe and beyond. Avalanche is one such platform. Though it is a new project, many have seen the potentials, which is why the reputation is growing.

If you are an ardent cryptocurrency investor, then you must have heard of Avalanche or its native currency AVAX. You may have been contemplating investing in the cryptocurrency, especially since it has had an amazing year (2021). But what exactly is Avalanche AVAX? Should you invest in Avalanche AVAX? And where can you buy Avalanche AVAX? These are some of the most important questions you should answer before investing in a coin.

Avalanche is similar to Ethereum in many ways. It is among a select group of blockchains that can best be described as platforms of platforms. Other projects in this category include Polkadot and Cosmos. Here, we are going to focus on Avalanche and its native currency AVAX. We are going to discuss the most important things you need to know about the digital coin, especially as it concerns investing.

At this point, it is important to stress that we will not give you a “Yes” or “No” answer to any of the critical questions here. Rather, we will discuss Avalanche in a manner that will help you answer these questions yourself. In the end, this post should help you understand what Avalanche is and determine whether it is the right investment for you.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Content:

What Is Avalanche?
Brief History Of Avalanche
What Makes Avalanche Unique?
More About Avalanche Token (AVAX)
Should You Invest In Avalanche?
Is Avalanche A Safe Investment?
Major Reasons To Invest In Avalanche
Reasons To Reconsider Investing In Avalanche
Where Can You Buy Avalanche (AVAX)?
Best Platform To Buy AVAX
What Next After Buying Avalanche AVAX?
Key Points To Keep In Mind
Final Words

What Is Avalanche?

According to its whitepaper, Avalanche can best be described as an open, programmable smart contracts platform for decentralized applications. We can also describe the platform as a layer one blockchain for decentralized applications (DApps) and custom blockchain networks. In terms of functions, it is similar to Ethereum. However, it has unique features and characteristics that make it a unique and valuable cryptocurrency platform.

Just like other Ethereum rivals, Avalanche aims to become the number one blockchain for smart contracts. It offers a number of advantages, including a higher transaction output of up to 6500 tps (transactions per second), without compromising scalability. In fact, it offers significantly improved scalability, especially when compared to old blockchains like Bitcoin and Ethereum.

One of the reasons Avalanche performs a lot better than rival blockchains is its unique architecture. Unlike most projects with a single blockchain, Avalanche boasts of three individual blockchains, namely the X-Chain, C-Chain, and P-Chain. The best part is that each of these chains serves a distinct purpose. In fact, the blockchains even use different consensus mechanisms to serve their individual purposes optimally.

Avalanche was launched in 2020, but it has gained widespread adoption in the cryptocurrency space. Though it is still developing its ecosystems of DApps, it has become an important part of the DeFi subsector. Some Ethereum projects, including SushiSwap, have integrated with Avalanche. The platform is designed in a manner that encourages interoperability with Ethereum and similar networks.

To conclude this part, we have to state that Avalanche also refers to the cryptocurrency that powers the Avalanche network. Also called AVAX or Avalanche AVAX, the native currency of the platform is used to settle transaction fees and can also be staked to secure the network. It is also the primary investment vehicle, meaning that it is the asset regular cryptocurrency traders or investors can buy and sell to make profits.

Brief History Of Avalanche

Avalanche is one of the most important cryptocurrency projects launched in 2020. The project officially started when Emin Gün Sirer, a Cornell University professor, founded the Ava Labs. Recognized as a veteran in cryptographic research, Professor Sirer is believed to have designed a conceptual peer-to-peer virtual currency six years before Bitcoin’s Whitepaper was released. He has reportedly worked on Bitcoin scaling solutions and also did some important research work on Ethereum prior to the 2016 DAO hack.

Professor Sirer founded Ava Labs in 2018 with Kevin Sekniqi and Maofan “Ted” Yin, both of Cornell University too. In February 2019, the project closed a seed round with several notable investors taking part, including Polychain. Before launching its mainnet in September 2020, Avalanche had a successful ICO on 15th July 2020, raising $42 million in about 4.5 hours. Many notable investors were involved, including participants from an Ethereum Genesis address.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

What Makes Avalanche Unique?

We’ve already stated that Avalanche is a unique platform. What exactly makes it unique? Well, for a starter, Avalanche utilizes three blockchains instead of one. As mentioned already, these three blockchains serve individual purposes. This is Avalanche’s primary approach to solving the blockchain trilemma.

We’ve also named the three different Avalanche blockchains in previous paragraphs. The X-Chain is also called the Exchange Chain, and it is responsible for creating and exchanging AVAX for other digital assets. It uses the Avalanche consensus mechanism. The C-Chain is also called the Contract Chain, and it hosts smart contracts and decentralized applications. It uses the Snowman consensus mechanism. The P-Chain is also called the Platform Chain, and it is responsible for coordinating network validators, tracking active subnets, as well as enabling the creation of new subnets. It also uses the Snowman consensus mechanism.

Thanks to its unique architecture and division of tasks by the blockchains, Avalanche achieves higher throughput while remaining truly decentralized. The design and unique approach also improve interoperability, allowing several suitable blockchains to integrate with the Avalanche ecosystem. The use of two different consensus mechanisms also improves the efficiency of the network.

More About Avalanche Token (AVAX)

Like every other major project in the crypto universe, Avalanche has a native currency that powers the ecosystem. It can best be described as a hard-capped, scarce digital asset that can be used for a number of things within the platform and beyond. It is officially called AVAX but can also be called Avalanche or the Avalanche token.

One of the primary uses of AVAX is for payment of fees while transacting on the platform. It is also used for staking, which is critical in securing the network. The Avalanche token (AVAX) also provides a basic unit of account between the multiple subnets that exist on the Avalanche ecosystem.

As you can tell, AVEX is the primary investment vehicle in Avalanche. It is the digital currency regular investors and traders can buy and sell to make profits. Like other assets on the crypto market, it is volatile. The implication is that it is a risky investment vehicle that can also be rewarding.

Avalanche AVAX is available on many cryptocurrency exchanges and trades under the ticker symbol “AVAX”. At the time of writing, it was trading for $16 per token with a 24-hour trading volume of $359 million. Its market capitalization is $4.77 billion, making it the #18 ranked cryptocurrency in the world. Its circulatory supply is 296,352,033 AVAX, while the maximum supply is 720,000,000 AVAX.

Check Out: Avalanche Price Predictions

Should You Invest In Avalanche?

From what we have discussed so far, you can confidently say that Avalanche is an incredible platform. It is well designed as a smart contracts platform and has the necessary infrastructure to support advanced decentralized apps (DApps). The fact that it supports interoperability with other blockchains makes it a lot more appealing in the DeFi space. But do all these good features translate to a good investment? In other words, should you invest in Avalanche AVAX?

There are many factors to consider before concluding that a cryptocurrency is a good investment. Of course, you already know that Avalanche has a native currency that also serves as the investment vehicle. The profitability of Avalanche investment fully depends on the performance of this digital coin. Of course, the nature of the Avalanche ecosystem will affect the price of the native currency, but there are several other factors that determine whether the coin can be called a good investment.

Investing in Avalanche can be profitable. In fact, many have made mouthwatering profits by investing in AVAX. However, we need to consider the safety of investing in the crypto and also discuss various reasons to invest or ignore the coin. We will do that right away to help you determine whether to invest or ignore.

Is Avalanche A Safe Investment?

With what has happened in the cryptocurrency space, the safety of investment should be the most important thing to consider before making any decision. To a large extent, the safety of a cryptocurrency network is dependent on the way it is designed. In this regard, Avalanche can be described as a secured platform.

The Avalanche token you will have to buy to invest is traded on the Exchange Chain (X-Chain). As stated already, this chain uses the unique Avalanche consensus mechanism. This proprietary consensus mechanism differs from both proof-of-stake and proof-of-stake consensus mechanisms in the sense that there is no single leader processing transactions and depending on validators to approve them. Rather, all the nodes in the network process and validate transactions. They achieve this by employing a DAG (directed acyclic graph) protocol.

Since there are basically no blocks in the Avalanche consensus mechanism, the network works at an incredible speed. It allows for immediate finalization and simultaneous processing of transactions without compromising accuracy or security. All transactions are correct with statistical certainty and the network is properly secured.

Don't Miss: Should You Buy Avalanche (AVAX)? 4 Pros, 4 Cons

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Major Reasons To Invest In Avalanche

The cryptocurrency space is one of the most exciting investment scenes. You have several investment options, which means you can choose to ignore Avalanche and invest in other digital coins. In such situations, one of the best ways to make a decision is to consider the reasons to invest and the reasons not to invest.

At this point, we will briefly discuss some of the major reasons you may choose to invest in Avalanche.

✅ Avalanche is one of the projects that can compete with Ethereum

Ethereum is regarded as one of the most important projects in the blockchain industry primarily because it has the capacity to host several other projects. For years, it has been the number one smart contracts platform, placing it at the forefront of the incredible decentralized finance (DeFi) industry. There are many new projects that are trying to compete with Ethereum. So far, Avalanche is the most viable one. Though it is one of the newest challengers, it has proofed to be better than others in many ways. It is the one true project that can compete with Ethereum – the potentials are enormous.

✅ Avalanche beats most competitors in key performance areas

The cryptocurrency space is becoming a lot more competitive than it was in the past, and we still feel it is a good thing for developers, investors, and the general public that will get to use the products and services in the near future. Some of Avalanche’s major competitors include Polkadot and Cosmos. However, Avalanche is better than all when it comes to throughput, sub-second finality, as well as scalability and the ability to use custom vms. It is seriously contending to become the number one ecosystem in DeFi.

✅ Avalanche has a unique architecture that offers several benefits

Avalanche was created by a University professor, who happens to be a top researcher in cryptography. The network was properly designed with a unique architecture that offers several advantages over old networks. With three blockchains performing three distinct functions, the ecosystem is optimized to serve every user satisfactorily. The division of computational power and the use of two consensus mechanisms makes the ecosystem secure, fast, and energy-efficient.

✅ Avalanche is a highly secured platform

As mentioned earlier, security is one of the most important factors to consider when deciding to invest in a cryptocurrency. We have also stated that Avalanche is a highly secured platform. The point is included here for the sake of emphasis.

✅ Avalanche has grown significantly since its mainnet was launched

Avalanche mainnet was launched in September 2020, a few months after the project was launched through a successful ICO. A year and a few months after the launch, the entire ecosystem has witnessed significant growth. Of course, Avalanche is set to explode further in the future, and those who invest now will be in a better position to benefit from the growth.

✅ Avalanche is so good that other platforms are integrating with it

One of the easiest ways to tell that a project will succeed is to consider its adoption within the industry it serves. In the case of Avalanche, it is fast becoming the most attractive project in DeFi. As hinted earlier, it is designed in a manner that allows other projects to integrate with it, and many have already done that. We may see other projects porting to Avalanche from other crypto platforms.

✅ Avalanche (AVAX) has grown significantly in a short while

The easiest way to measure the growth of a cryptocurrency platform is to consider how far its native currency has gained in the market. In the case of AVAX, it has performed wonderfully well in a matter of one year and a few extra months. From an ICO Token price of $0.5 on 15th July 2020, the coin reached an all-time high of $146.22 on 21st November 2021.

✅ Avalanche is set for more growth as the ecosystem keeps expanding

As we have already explained in the very first section of this post, Avalanche is an open-source platform for launching advanced decentralized applications and many other digital projects/items. The ecosystem also supports the launching of new financial primitives and interoperable blockchains within its ecosystem. The ecosystem will keep expanding, and that will definitely result in more significant growth for Avalanche AVAX.

✅ Avalanche has attracted several key investors and partners

At the time of its launch, Avalanche attracted many key investors. About $42 million was launched in about 4 hours, which indicates that the investors trusted the project even when it was still at the formative stage. More investors have stepped in, which is evident in the fact that AVAX has grown to become the #18 ranked cryptocurrency in the world. You can bank on the confidence of more experienced investors when buying AVAX.

✅ Avalanche AVAX is relatively cheap when compared to what it can be in the future

At the time of writing this piece, Avalanche is selling at a little over $16 per token. To the uninformed, that is a high price for a new cryptocurrency. However, this is nothing compared to what the coin can be worth in the future. It has the potentials to cross $50 and buying now will be advantageous.

Reasons To Reconsider Investing In Avalanche

As you can tell from the last section, there are several reasons to invest in Avalanche. If not for anything else, you can choose to invest because many have made lots of profits by buying and selling AVAX. However, there are always two sides to a story. There are also bad sides to investing in Avalanche AVAX, and it is only fair that we discuss them too.

❌ Avalanche is a relatively new project

The cryptocurrency space is full of uncertainty, which is one of the major reasons experts warn investors to always be cautious. Even cryptocurrency analysts will advise anyone to be careful when buying a new cryptocurrency. In spite of its exploits, AVAX is still a new digital currency. Though we expect it to explode, no one can confidently tell where it will be tomorrow. The value of the coin is more likely to increase in the coming years, but there is also a good chance that it will drop with time.

❌ Avalanche has several competitors, including Ethereum

When Ethereum was launched, many assumed that it will be the best thing to happen to the blockchain industry in many years to come. Just six years afterwards, Ethereum has several competitors, including Avalanche. Ethereum is still regarded as one of the most incredible blockchain projects and also remains a competitor to Avalanche. As we expect Avalanche to grow bigger and compete favourably with Ethereum, we also expect that many new projects will be created in the future, and some may still perform better than Avalanche, reducing its popularity and potential value in the long run.

❌ Avalanche AVAX is a volatile asset

Volatility is one of the dreadful reasons people steer clear of the cryptocurrency market. Almost every asset in the industry is volatile, and AVAX is not an exception. Volatility can be favourable to some investors, but it is generally a big problem for inexperienced investors. The volatile nature of AVAX means it is easy to lose lots of money while trading/investing in Avalanche AVAX.

Where Can You Buy Avalanche (AVAX)?

Like most other cryptocurrencies, AVAX is available across a wide variety of platforms. A simple Google search can lead you to several legitimate places to buy Avalanche, but you can also be led to a website where you will lose your money while trying to invest. It is important, therefore, to understand your options when you want to invest in any coin.

Practically, there are three major places you can buy AVAX and other digital assets. The commonest places are called cryptocurrency exchanges. They are very much like the stock market, except for the fact that they are websites that exclusively deal on cryptocurrencies. AVAX is available on most exchanges, including Coinbase and Binance.

Besides official cryptocurrency exchanges, you can also buy AVAX and other cryptocurrencies from brokerages. There are a good number of progressive brokerage firms that have understood the place of cryptocurrencies in today's world, and they make some of the best coins available for their users. Most brokerages that offer cryptocurrencies also offer other investment vehicles like stocks, forex, options, ETFs, etc.

There are other websites and apps where you can legitimately buy AVAX and other cryptocurrencies. Though they are neither official exchanges nor brokerage firms, such websites make buying and selling of cryptocurrencies and similar assets easier for regular folks. The major challenge is that there are several such platforms that are run by scammers and people with questionable ethics.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Best Platform To Buy AVAX

Knowing that the cryptocurrency space is full of uncertainties and that there are places where you can lose money while trying to buy a digital coin, you should choose your platform carefully at all times. But which platform is the best place to buy AVAX?

Though cryptocurrency exchanges are the commonest places to buy cryptos, they are not the safest. To an extent, buying a cryptocurrency from a recognized exchange is safe, but leaving the asset for too long in such a platform can be dangerous. Many exchanges have been hacked in the past, and though most have adopted preventive measures, experts continue to advise investors against leaving digital currencies in exchanges even for a short time.

As hinted earlier, it is dangerous to trust every investment or trading platform for cryptocurrencies that are neither an exchange nor brokerage firm. Though many of these sites and apps are run by legitimate companies in different countries, some are not better than scam sites run by individuals with questionable ethics.

With the points raised above, it is easier to conclude that brokerages can be the best places to buy cryptocurrencies. This is especially true for newbies and inexperienced traders. If you are thinking of buying AVAX right away, then eToro is one of the best platforms to use. eToro is an exceptional brokerage that has been recognized as one of the best social trading platforms in the world. AVAX is available on eToro at the best possible price. The platform also offers several perks, which is why it is often regarded as the best platform for traders/investors of all experience levels.

What Next After Buying Avalanche AVAX?

Buying a cryptocurrency is only one aspect of investing in it. There are several things you can do with most cryptocurrencies. Some can be staked and some can be used for lending and borrowing activities. At one point or the other, you will need to sell the asset. But what exactly should you do after buying AVAX? The next important thing is to keep it safe in a digital wallet.

Like other cryptocurrencies, AVAX can be stored in a digital wallet. In fact, it is compatible with a good number of digital wallets, meaning your options are many. Depending on your experience level, you may have a trusted digital wallet that can conveniently hold AVAX. However, if you are a newbie buying through eToro, you will have a safe, easy-to-use, multi-token digital wallet for AVAX and other assets you may buy in the future.

Key Points To Keep In Mind

We’ve discussed almost everything you need to know about Avalanche AVAX to determine if it is the right investment option for you. Of course, what we have above is a lot of information, and it may be a little difficult for everyone to read and understand every part of it. Here, we will summarize the most important parts that should influence your decision:

Avalanche is an open-source and smart contracts platform for launching advanced decentralized applications and other projects like new financial primitives and new interoperable blockchains.
Avalanche was founded by a veteran in cryptographic research, Professor Emin Gün Sirer, who worked with a few others at Cornell University to create the Ava Labs in 2018.
Avalanche is one of the top platforms in the DeFi space that can favourably compete with Ethereum.
Avalanche has three blockchains that perform three distinct functions, using different consensus mechanisms.
Avalanche is a highly secured platform with adequate infrastructure to bring needed changes in the DeFi space and the entire blockchain industry.
Avalanche beats its current competitors in key performance indicators.
Avalanche AVAX was launched in 2020 but has grown significantly, yielding 3,100% ROI, according to Coin Market Cap.
Avalanche attracted several notable investors when it was launched and many cryptocurrency platforms have integrated Avalanche, even as others are expected to port to the wonderful platform.
Avalanche AVAX is relatively cheap, especially when compared to its potentials.
AVAX is a volatile cryptocurrency, and like others, is considered a risky investment.
eToro is one of the best platforms to buy Avalanche AVEX. It is secured and offers several benefits that exchanges and other trading/investment platforms do not offer.

Final Words

With so many cryptocurrencies on the market, it is difficult to know what to invest in. Experienced investors study every asset carefully before investing. Here, we have discussed Avalanche properly. We intentionally focused on the aspects of the project that can help you determine whether it is a good project or not. We also discussed your options when it comes to buying AVAX and other digital assets.

Investing in AVAX can be profitable. However, you must recognize that it is a risky investment that can yield huge rewards. If you have the stomach for it, you can invest in AVAX. However, invest what you can lose, and don't forget to buy from a secured source like eToro at all times.