Opinion: Avalanche is a promising smart contracts platform built on the first breakthrough in decentralized systems since Satoshi Nakamoto released the Bitcoin whitepaper in 2008.
In the twelve years since Satoshi introduced Bitcoin to the world, we’ve seen countless efforts to create networks that attempt to unlock the next generation of decentralized assets and applications. These projects, while claiming technical superiority, have either copied Bitcoin’s model or tried to implement decades-old designs for distributed systems — designs whose flaws are well-known and recorded in the last 40 years of research.
What Is Avalanche?
Avalanche is an open-source platform for launching DeFi applications and enterprise blockchain deployments in one interoperable, highly scalable ecosystem.
In addition to supporting sub-second finality, Avalanche is capable of throughput orders of magnitude greater than existing blockchain networks (4,500+ transactions/second), and safety thresholds well-above the 51% standards of other networks.
One big difference between Avalanche and other decentralized networks is the consensus protocol. Over time, people have come to a false understanding that blockchains have to be slow and not scalable after seeing the existing blockchains in action. The Avalanche protocol employs a novel approach to consensus to achieve its strong safety guarantees, while achieving quick finality and high-throughput, without compromising decentralization.
Unlike other networks that force terms and conditions of network participation uniformly across the system, Avalanche empowers individuals and enterprises to easily create powerful, reliable and secure applications and custom blockchain networks with complex rulesets or build on existing private or public networks that fit their use case.
Take, for example, a regulated financial institution wanting to issue digital assets. It’s simply not possible for them to do so compliantly in a system where they cannot control which nodes validate their network activity. In Avalanche, the same institution can achieve complete control over the virtual machine running their use case and the conditions of running a node on their custom sub-network.
What Is the Avalanche Token (AVAX)? What Is Its Function?
The Avalanche (AVAX) token is the native token of the Avalanche platform and is used to secure the network through staking, pay for fees and provide a basic unit of account between the multiple subnetworks created on the Avalanche platform.
Who Is the Team Behind Avalanche?
We are a company of around 45 people today, delivering the most innovative breakthrough in blockchain technology.
How Is Avalanche Different From Bitcoin and Bitcoin Cash?
Unlike Bitcoin, however, Avalanche consensus is designed for speed, scalability, and flexibility in implementations.
- Bitcoin achieves transaction finality in one hour. Avalanche transactions achieve sub-second finality.
- Bitcoin’s blockchain production is centered around two dozen mining pools and solo miners. Avalanche can accommodate thousands to many millions of block producers without leaking value out of the system.
- Bitcoin can facilitate ~seven transactions per second. Avalanche has achieved 6,500 transactions per second, demonstrating that it can accommodate three times the transaction flow of VISA.
With Avalanche, we’re implementing some of our favorite qualities of Bitcoin, but optimizing the rest of the system for smart contracts and asset issuance.
How Is Avalanche Different From Ethereum?
As long as Ethereum uses proof-of-work, it will struggle to scale participation without incurring massive fees and network congestion. Ethereum 2.0’s proof-of-stake approach will help, but it also introduces significant complexity and execution risk with its approach to scaling, “sharding,” which aims to process transactions simultaneously, rather than consecutively.
Avalanche attacks the scaling challenge from the absolute foundation for decentralized networks: consensus. Protocols in the Avalanche family are capable of achieving sub-second finality, supporting 4,500+ transactions per second and scaling up to millions of full, block-producing validator nodes participating in consensus.
Unlike Ethereum, where applications have to compete for the same finite pool of network resources – which drives up fees for all participants – apps on Avalanche can run in their own independent blockchains validated by a dynamic, custom set of validators. These subnetworks are still connected to the broader ecosystem of chains on Avalanche, but now their relationships are purely value-adding (e.g. cross-network value transfer) rather than competitive.
Not only does this enable the creation of private subnets, it also allows developers to define the rules, economics, participants and security of their implementation.
Similar to how we cherry-picked our favorite parts of Bitcoin, we’re implementing some of the amazing innovations of Ethereum and the EVM, while changing the core mechanics to make it faster, lighter, and cheaper to run.
How Is Avalanche Different From the “Ethereum Killers”?
Well, first and foremost, we don’t see ourselves as an Ethereum Killer. Many of the people working on Avalanche took their first steps in crypto with Ethereum, and we still love the Ethereum community and what it’s achieved thus far. In fact, I’d argue we’re complementary to Ethereum as a sort of safety net as it transitions to Ethereum 2.0 with the immense risks of evolving the second-largest cryptocurrency by market cap.
I won’t name names, but the projects that are fine with being labeled Ethereum Killers have gathered around a family of classical consensus protocols whose limits are well-understood and heavily researched over the last 40 years.
Yes, you’re reading that right, Satoshi and the entire world of researchers in my field knew about these decades-old approaches and came to independent conclusions that these protocols are unsuitable for decentralized systems.
These projects are often the most outspoken about transaction throughput and speeds, and suspiciously quiet about their decentralization — as characterized by the number of participants a network can accommodate or reliance on nominated leaders — and the resultant security tradeoffs of small cohorts having so much control.
Unlike these Ethereum Killers, Avalanche achieves sub-second finality, high throughput and efficiency without sacrificing decentralization or security.
On Avalanche, validators conduct individual experiments when determining which nodes to sample. Each node samples without any consideration to the selections made by other nodes. No preferential treatment or enterprises buying special seats to peer down on nodes of lesser privilege.
To be clear, that’s not an easy needle to thread. It took the first major breakthrough in over a decade to make possible what scientists and researchers — myself included — have long thought would never be achievable.
What’s Next for Avalanche?
Our mainnet launched on September 21, 16 months after we exited stealth mode. I’m immensely proud of what we’re bringing to market and the strength of our community of developers already building on Avalanche.
We plan on showing the world the true potential of blockchains and following in Satoshi’s footsteps to have the same, defining impact as we stand on the cusp of a new decade.