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Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.
Today, we talk about Avalanche, a relatively new blockchain technology that launched in late 2020 and has already made it into the top 10 earlier this year.
Like other projects, Avalanche’s main goal is to provide the same capabilities as Ethereum, but solve its main problems. If you’ve listened to this podcast, you will recognize them quickly: Ethereum allows for the creation of an entirely digital financial system through smart contracts, but can’t currently handle a lot of transactions and the fees are very high.
Avalanche tries to solve this problem in a couple of ways. First, it splits the three core jobs – transaction validation, exchanging money, and executing smart contracts – and operates three separate computer networks to run them. This allows it to process thousands of transactions per second as opposed to around 17 for Ethereum, and Avalanche has fees that can be thousands of times lower.
The other way Avalanche attempts to replace Ethereum is by simply being compatible with it. Computer code written to build smart contracts on Ethereum can be reused on Avalanche. That means, programmers can move over very quickly and take advantage of fast, cheap transactions, which has helped Avalanche gain rapid adoption since it’s launch.
And that’s why Avalanche is becoming so popular and starting to compete with Ethereum. And next time, we’ll talk about Polkadot.
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