Want to jump straight to the answer? You can buy AVAX on Coinbase.
Avalanche is a decentralized platform that can be thought of as the “blockchain for blockchains.” The system operates on its own blockchain but has the capability of aggregating other cryptocurrencies and blockchain protocols onto its network. Avalanche is seen as an Ethereum alternative, and with Ethereum’s ever growing transaction fees, AVAX token has risen significantly in value.
AVAX is the native cryptocurrency on the platform and it’s used for payments, rewards and governance on Avalanche. The platform seeks to digitize any type of asset on its blockchain, such as other crypto assets, stocks, art and commodities.
What is Avalanche?
Avalanche is a protocol that operates in the decentralized finance (DeFi) industry. The DeFi industry seeks to replace centralized banking functions with code on the blockchain called smart contracts. Smart contracts differ from traditional code because they’re able to hold crypto assets in escrow on the blockchain without a centralized custodian. Avalanche aims to make smart contracts more accessible with open, programmable smart contracts platform for DApps.
Avalanche is unique because it is the only DeFi platform that finalizes transactions in less than a second. Also, it connects to multiple blockchain networks, allowing its users to access platforms on popular blockchains such as Ethereum.
There are two main ways to power blockchain technology (also called consensus mechanisms): proof of work and proof of stake. Proof of work powers cryptocurrencies like Bitcoin and Ethereum with computational power from a distributed network of computer nodes. The main disadvantage of proof of work is the low transaction volume and high transaction fees. Proof of work networks can use an exorbitant amount of electricity too.
Proof of stake uses validator nodes that have a financial stake in the cryptocurrency to secure transactions on the blockchain. These blockchains are much more scalable and energy efficient than proof of work blockchains. Avalanche’s blockchain works under a proof of stake system, allowing transactions to occur in seconds for a fraction of what it would cost on a proof of work blockchain.
Brief History of Avalanche
Ava Labs launched Avalanche’s mainnet in September 2020 after raising $60 million from private and public investments in August 2020. Avalanche is backed by prestigious venture capital firms like Adreessen Horowitz and Polychain Capital.
The project was founded by a team of 3 co-founders –– the most notable founder, Emin Gün Sirer. Sirer is a computer scientist from Cornell who has been involved with Bitcoin scalability upgrades since the early days of cryptocurrency.
AVAX token was launched in August to raise funds for the project. In September 2020, the token was trading at a price of $4.10 per coin with a market capitalization of $100 million. While significantly down at the start of 2022, Avalanche is still up from its prices in early 2021.
How to Buy AVAX
- Open an online account.
You’ll need to make an online account with a crypto brokerage that supports AVAX in order to purchase the token. If you only have a cryptocurrency exchange account with Coinbase, you’ll need to make another account with a separate exchange, as these platforms don’t support AVAX trading.
Exchanges that support AVAX include Binance, Huobi and OKEx. Similarly to stock exchanges, you’ll need to provide the platform with personal information for tax purposes. Some information you’ll need to provide when you make an account are your full name, address, Social Security number and birthday.
- Buy a wallet (optional).
Cryptocurrency wallets allow you to store your crypto assets safely. You should only keep your crypto on an exchange if you’re actively trading it, as you can’t trade cryptocurrencies from most crypto wallets. Exchanges are much more at risk for being hacked than wallets, so it’s recommended you store your crypto in either a hardware wallet or a software wallet.
Software wallets are computer programs that you can securely store your cryptocurrency in. These can be computer programs and mobile apps, and they’re many software wallets on the market to choose from. Most software wallets are free, and some even let you earn interest on your cryptocurrency holdings.
Hardware wallets are physical devices that store cryptocurrency offline. These are the most secure way to store your cryptocurrencies and it’s inaccessible to online hackers –– the only way for you to gain access to your funds is through the physical device.
- Make your purchase.
Once you’ve chosen a cryptocurrency wallet to store your assets in, you need to place a buy order on a crypto exchange to purchase AVAX. You can place your buy order as either a market order or a limit order, depending on the price you want to purchase AVAX at. If you place your order as a market order, you’ll purchase AVAX at the current market price.
With a limit order, however, you’ll only purchase AVAX at a specified price, and if the price falls to that level, your order will be filled. If you change your mind, you can cancel a limit order at any time before it gets filled.
You Can Buy AVAX on Crypto.com & Changelly
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Recommended Crypto Wallets for AVAX Tokens
Learning how to store your cryptos safely is just as important as learning how to buy AVAX. If you're looking for a more secure way to store your cryptocurrency, you should use a hardware or software wallet. Software wallets are typically free, and they let you control your cryptocurrency from your smartphone or desktop. Be sure to write down your private keys and put them somewhere safe, as this will give you access to your digital assets if you lose access to your wallet.
Hardware wallets are the most secure way to store cryptocurrency. These wallets store your private keys on an external device that isn't connected to the internet, making it impossible for hackers to steal your crypto via the internet. The downside to hardware wallets, however, is they cost money and make it harder to actively use your cryptocurrency.
Best Hardware Wallet: Ledger Nano S
The Ledger Nano S is perfect for investors who want industry-leading security without breaking the bank. There are very few hardware wallets that support AVAX, but thanks to its Ledger Live platform investors can download applications to their wallets to store lesser-known cryptocurrencies like AVAX.
The Ledger Nano S supports hundreds of cryptocurrencies, including major cryptos like Bitcoin, Ethereum, ERC-20 tokens and Ripple. The Ledger Nano S is only $59, making it an affordable option for most cryptocurrency investors. Ledger also offers 2 premium models: the Nano S Plus and Nano X. The Nano S Plus adds a larger screen and more memory. The Nano X has the same larger screen and increased memory as well as Bluetooth functionality for seamless on-the-go use.
Best Software Wallet: Avalanche Wallet
Avalanche Wallet is a software wallet made by Ava Labs to store your AVAX tokens on. The wallet may be confusing at first — there are many features that aren’t typically available on software wallets.
You can stake your avalanche tokens on the Avalanche network to earn interest on your cryptocurrency holdings. Because there is no central liquidity for DeFi protocols, projects like Avalanche incentivize users to stake their tokens for rewards.
Another unique feature of the Avalanche Wallet is its ability to mint new non-fungible tokens (NFTs). Each NFT has its own distinct value. These tokens can be used to authenticate art, music and collectibles. NFTs have the potential to tokenize any real world assets in the future, which is Avalanche’s goal with this platform.
Trade or Sell Your Cryptocurrency
If you decide you don’t want to HODL your cryptocurrency, then you can either trade or sell it. To sell your AVAX, you’ll need to send your tokens back onto a cryptocurrency exchange if they’re in a cryptocurrency wallet. Once they’re sent to the exchange, you can sell your AVAX by placing a limit or market sell order.
Once you sell your AVAX tokens for USD, you can transfer your funds from the exchange to your bank account. Alternatively, you can continue trading the AVAX-USD pair to try and accumulate more AVAX tokens. Crypto markets are highly volatile, so day trading tokens is a high-risk, high-reward strategy.
Current Crypto Prices
The cryptocurrency markets offer a unique opportunity for risk-tolerant investors. It's more volatile than traditional equities, and if history is any indication, it's growth potential is far greater than most other investments. This being said, digital assets are more risky than traditional assets, so only invest money you're able to lose, and always do your research prior to investing in a token. For up to date cryptocurrency prices, check out our table below.
Avalanche’s Long-Term Outlook
Avalanche has an ambitious goal of tokenizing all types of real-world assets. Ava Labs is led by an amazing team and venture capital partners, and they’ve developed several innovative features on the platform.
Avalanche’s biggest competitor is Ethereum. Ethereum is the most used platform for creating DeFi projects and has far more transaction volume and daily active users than Avalanche. However, Ethereum is a proof of work chain, so it’s much more expensive to transact crypto on Ethereum’s blockchain.
Avalanche recognizes that it offers many advantages over Ethereum’s network, making it possible for any Ethereum project to upload its blockchain to the Avalanche blockchain. If more DeFi projects migrate to Avalanche, AVAX will likely appreciate in value.
Frequently Asked Questions
Is Avalanche token AVAX a metaverse investment?
Considering Avalanche announced a $290 million metaverse development incentive program, it could be considered a metaverse investment. This program intended focused is to accelerate the adoption and growth of subnet which would enable scalable app specific blockchains.
What are some metaverse tokens built on Avalanche?
Some popular metaverse tokens built on Avalanche include: Crabada (CRA), Yield Hunt (GEM), and Avaxtars (AVXT).
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