Most investors are now familiar with the concept of Bitcoin mines, a critical component of the network's functionality. In this system, miners engage in the consensus protocol, earning rewards for their pivotal role in upholding the infrastructure. The Bitcoin network operates on a competitive proof of work model, where miners work independently, and only the first to solve a block is rewarded.
In contrast, the Avalanche Network adopts a team-oriented approach among its infrastructure providers, known as validators. These validators share both the consensus workload and the rewards. Thanks to an innovative framework and protocol, Avalanche can finalize transactions in under one second, setting it apart in terms of efficiency.
Avalanche's architecture is distinctly designed for scalability, facilitated through the creation of subnetworks. This approach essentially positions Avalanche as a Blockchain As A Service Ecosystem, where subnetworks can develop their custom blockchains supported by validators that also maintain the main network. Consequently, these subnets enjoy the advantages of Avalanche’s fast and secure protocol.
To support a subnet, validators must also contribute to the main network's security. The Avalanche documentation suggests a minimum of five validators to start a subnetwork, with more complex networks requiring additional validators to manage the increased data processing.
Becoming a validator involves both technical acumen and a substantial investment of 2000 AVAX tokens, highlighting the capital-intensive nature of expanding the network. While running a validator is technically open to anyone, the practical demands and broad needs of the business community often exceed individual capabilities.
Businesses may need validators to comply with various standards, including:
Compliance and IT specifications
Data privacy and retention
KYC (Know Your Customer) standards
Geographic location requirements
Therefore, operating infrastructure on the Avalanche Network equates to running validators, a task that demands both capital and technical expertise. This necessity has carved out a lucrative niche for infrastructure providers. Being a validator is akin to owning "network real estate," where providers can leverage their space within the network protocol (secured by committed AVAX Tokens) to serve applications requiring network access.
Our commitment to the Avalanche ecosystem, through active participation and running infrastructure, is driven by our belief in its potential and our dedication to fostering its growth. We see immense value in our infrastructure role and the varied opportunities for validators to earn rewards. This venture represents a significant investment within the blockchain space, one we are eager to expand and enrich.
