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Avalanche (AVAX) is a relatively new cryptocurrency. Despite only having sprung up in 2020, it has gained tremendous popularity as an alternative for Ethereum developers. Avalanche has become one of the larger cryptocurrencies, with a market cap around £5.38 Billion. Here’s what you need to know about buying AVAX.
Avalanche in the digital economy
Ethereum has a few notable downsides, like high gas fees and slow transaction speeds. Avalanche was created as a highly scalable blockchain that addresses these problems. AVAX bills itself as “the fastest smart chain contracts platform in the blockchain industry.”
While Avalanche offers plenty of admirable features, crypto users are adopting it because of its nimble structure.
AVAX supports three blockchains. One, the Contract Chain (C-Chain), is ideal for smart contracts, such as non-fungible tokens (NFTs) and decentralised applications (DApps). The C-Chain is Ethereum Virtual Machine compatible, allowing Ethereum developers to use it to deploy applications.
Users pay a subscription fee in AVAX to operate on Avalanche’s blockchain, although costs are vastly lower than Ethereum’s gas fees. Gas refers to the amount of ETH required to conduct a transaction on the Ethereum blockchain.
Another fact about Avalanche: AVAX is a capped-supply token with a maximum of 720 million tokens. Currently, there are more than 330 million tokens in circulation.
You can also stake your AVAX since Avalanche runs on a proof of stake consensus mechanism.
How to buy AVAX
If you decide to invest in Avalanche, you can buy AVAX tokens in just three steps:
1. Choose a crypto exchange
Before you can buy AVAX—or any form of cryptocurrency—you need to open an account with a crypto exchange. Crypto exchanges facilitate trades on their platforms, making it easy to buy and sell tokens.
Some crypto exchanges are designed for novice investors, with very simple interfaces. Others are for more advanced traders and include features like crypto staking. The best crypto exchanges offer various cryptocurrencies and low trading fees.
2. Buy AVAX
Once you’ve opened an account and selected a payment method, you can make your first investment in AVAX.
Enter the exchange’s trading platform and enter Avalanche’s ticker symbol—AVAX—and how much you want to invest. You can usually enter a number of tokens, or you can opt to enter a dollar amount to invest.
You can also decide on an order type; market orders are processed right away, while limit orders only go through once the token reaches a certain price. A limit order can be a good idea if you expect the price to change significantly in the near future.
If you place a market order, the order will be processed right away, and you’ll be a proud AVAX investor.
3. Store your AVAX
With cryptocurrencies, you have to think about storage to protect your investment. AVAX can be stored in several different ways:
- Hardware wallets. A hardware wallet is a physical device that stores the private keys to your crypto assets. They look similar to flash drives, and they’re considered cold storage —they’re not connected to any network or the internet. Popular hardware wallets include Trezor and Ledger. In fact, the Ledger Nano X allows you to connect to any third-party wallet that supports Avalanche.
- Paper wallets. Paper wallets are exactly what they sound like: They’re printed pieces of paper with your private and public keys on them. Paper wallets are less popular now that more people are investing in cryptocurrency since there is always the risk of losing the paper—and never being able to access your investments.
- Software wallets. Software wallets are apps or programs downloaded to your device to store your crypto assets. They are often called a “hot wallet.” While not as secure as a “cold wallet,” assets on software wallets can be accessed easily when you want to trade your holdings. The Avalanche network also has its own noncustodial Avalanche Wallet for storing Avalanche assets. You’ll have to key in your keystore file, private key, and recovery phase for that web wallet.
- Crypto exchanges. Crypto exchanges, such as Crypto.com, allow you to store your crypto on their platforms. For instance, the Crypto.com DeFi Wallet will enable you to store Avalanche-C (AVAX).
What you can buy with AVAX
You can use AVAX to pay transaction fees or as a currency within the Avalanche network. Alternatively, you can simply speculate on the token’s price by buying and selling AVAX with other crypto investors.
AVAX’s price, at the time of this write, was down about 54% year over year.
If you decide to invest in Avalanche, keep in mind that the price can fluctuate wildly. For that reason, financial experts recommend that crypto investments should only make up a small portion of your overall investment portfolio.
