When compared to Bitcoin, Bitcoin Cash, and other proof-of-work coins competing to replace fiat, Avalanche might look like an entirely different species, but we actually have some things in common.
Avalanche is a fixed cap asset, with a max of 720M AVAX in circulation. It employs Satoshi’s UTXO model for single-use credentials to facilitate payments, rather than an account model. Finally, Avalanche structures transactions like Segwit, without backward compatibility issues, and uses the Bech32 address format to minimize errors and maximize readability.
Unlike Bitcoin, however, Avalanche consensus is designed for speed, scalability, and flexibility in implementations.
- Bitcoin achieves transaction finality in 1 hour. Avalanche transactions achieve sub-second finality.
- Bitcoin’s blockchain production is centered around 2 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 ~7 transactions per second. Avalanche has achieved 6,500 transactions per second, demonstrating that it can accommodate Visa-level throughput
Avalanche uses a proof-of-stake model for network security, which is both environmentally friendly and doesn’t require the highly-specialized (read: expensive) mining rigs that have led to centralization in mining. Meaning, thousands to even millions of individuals can fully participate in Avalanche with just a computer and internet connection — that’s real decentralization.
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.
When compared to Ethereum, Avalanche’s similarities are much more evident at the surface–after all, we do support the entirety of the Ethereum Virtual Machine (EVM) and its tooling–but under the hood, we approach our shared challenges in very different ways.
For now, Ethereum uses proof-of-work mining like Bitcoin and intends to migrate to proof-of-stake when it launches Ethereum 2.0. While proof-of-work is an excellent foundation for robust protocols, it achieves this stability by deliberately slowing down network actions and confirmations. A perfectly acceptable trade-off in Bitcoin’s “digital gold” thesis but a tough sell for the booming world of DeFi.
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, known as subnets. These subnets 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.
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, we believe we’re complementary to Ethereum as a sort of safety net as it transitions to Ethereum 2.0 with the risks of evolving the second-largest cryptocurrency by market cap.
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.
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–our team included–long thought would never be achievable.
Avalanche on social media:
Whitepapers & documentation:
- Avalanche Wallet: a simple, secure, non-custodial wallet for storing Avalanche assets.
- Avalanche Explorer: an analytics tool that enables people to search the Avalanche network for transactions, addresses, and other platform activities
- Avascan: an independent blockchain explorer for Avalanche–backed by Avalanche-X
- VScout: an analytics tool for exploring Avalanche Subnets (Dynamic Validator Pools)
- AvaxMap: all active nodes running on Avalanche
Notable media coverage on Avalanche:
Sampling of announced projects working with Avalanche: