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What is Avalanche (AVAX)?

Avalanche is a cryptocurrency platform designed by Emin Gün Sirer, Kevin Sekniqi, and Maofan “Ted” Yin and was launched in September 2020. The project began as a way to achieve consensus among machines and network nodes that may be unreliable. They hoped this technology would improve the stability of available cryptocurrency networks, but it grew over time to become a crypto platform in its own right.

Currently, the Avalanche platform operates three chains: the X-Chain, the C-Chain and the P-Chain. The X-Chain is the platform's exchange chain, utilised for creating and trading assets across the network. The C-Chain stands for contract chain, where smart contract transactions are processed. The P-Chain refers to the platform chain, where staking and validating activities are carried out.

AVAX is the native coin of the Avalanche network, so it is sometimes known simply as the Avalanche Coin. The name ‘AVAX’ comes from Avalanche and X-Chain, the chain on which the coin is traded. However, the AVAX Coin is also used on the C-Chain and P-Chain — on the P-Chain, for example, a Proof of Stake model is used to validate transactions using AVAX.

What is Avalanche used for?

The Avalanche network is similar to the Ethereum network because it can be used to support other digital assets outside its native currency, the AVAX Avalanche Coin. Users can utilise the network to create smart contracts that transfer various assets, including cryptocurrencies and NFTs (non-fungible tokens). Developers can also use the platform to build their own crypto-integrated applications, hosting these apps on Avalanche itself.

While Avalanche is the platform, AVAX is the native Avalanche Coin. Traders can buy AVAX to use as an alternative form of currency or to speculate on its value ahead of a later sale. The currency can also be utilised for staking — under Avalanche's Proof of Stake model. Users can pledge a stake from their AVAX assets to bid for the right to validate transactions on the network. Each validation rewards the user who owns that specific network node, although they will need to put forward large amounts of AVAX as their initial stake.

How is the price of Avalanche determined?

It's important to remember that Avalanche is the platform, and AVAX is the native currency. So, if we are talking about the price of the Avalanche Coin, we are referring to the value of the AVAX currency. AVAX is not a Stablecoin, and its value is not tied to that of any external currency or other assets. Instead, the value of one AVAX is determined according to market forces.

Like with other non-pegged currencies such as Ether or Bitcoin, the relative AVAX or Avalanche price is subject to supply and demand. The supply of AVAX is limited to 720 million units, and around half of these units were made available at launch. Additional currency units are added to the supply as transactions, validated and recorded on the P-Chain. This helps ensure supply does not spiral out of control, driving the currency's value down.

But demand still plays a big role in determining the price of AVAX. If people want to buy AVAX or investigate AVAX price in AUD, the value goes up — if there is no such desire in the market, the value will decrease. As of September 2022, the AVAX/AUD rate is around 1 AVAX to AUD 0.04.

Trade in Avalanche Coin with BTC Markets

At BTC Markets, we provide an easy-to-use yet powerful platform to support you as you buy and trade AVAX. Our features are convenient, secure and reliable, so both experienced investors and relative newcomers will find what they need. Sign up for a BTC account today, or get in touch with our team to learn more.

Frequently asked questions

Is it safe to buy Avalanche?

The Avalanche Coin (AVAX) has been available since 2020, so it is not the longest-established cryptocurrency on the market. However, it has garnered significant interest in this relatively short time, and many traders have made AVAX part of their investment portfolio. Avalanche is a reputable network based on sound research and a robust theoretical foundation. Users can be assured they are not buying into a scam if they purchase AVAX through a reputable exchange.

It's important to remember that there are no guarantees of value increases when you buy a cryptocurrency like AVAX. AVAX is not a stablecoin and has no additional protections to prevent rapid decreases in value. Instead, the price of AVAX is dictated exclusively by the market forces of supply and demand. Traders are highly encouraged to retain a conservative approach when investing in crypto.

Can you convert Avalanche to cash?

It is possible to convert AVAX (the Avalanche Coin) into fiat currency, i.e. cash. For example, you can convert your AVAX according to the latest price in AUD, USD, GBP, CAD or any other currency supported by your crypto wallet.

To do this, you'll need to complete an exchange transaction. Find a user who wishes to exchange your desired currency for the equivalent amount from your AVAX reserve. Once the trade is completed, you can withdraw the fiat currency from your wallet to your bank account.

How do I store AVAX?

When you buy AVAX or build up a reserve of the currency through trading, this will be stored in your crypto wallet. You will need a crypto wallet before you begin trading, which is an integral part of the overall experience. A crypto wallet is where currencies are stored, and your reserves are managed.

Platforms like BTC Markets provide crypto wallets alongside an array of other features. When you sign up for an account, this wallet will be built into the platform itself. Discover more about the BTC Markets wallet by checking out our frequently asked questions or contacting our team.

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This Week in Crypto: 8th December 2022
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