What is Ravencoin, and how does it work? — Matjaz Skorjanc
Ravencoin was launched in 2018 and is a Bitcoin code fork that allows anyone to issue digital assets and tokens.
It’s faster and easier to use than the Bitcoin blockchain its network is based on.
The Ravencoin blockchain
Ravencoin is a Proof-of-Work (PoW) blockchain designed with one specific function — to allow users to issue tokens easily and quickly.
In this way, it’s a viable alternative to other blockchains that create assets, such as Ethereum.
Tokens issued on RVN (Ravencoin) can be used in many ways and for different purposes. These include real-world asset transfer transactions and NFT (non-fungible tokens).
Is Ravencoin the same as the Bitcoin blockchain?
Broadly speaking, the Ravencoin network is similar to other platforms like Bitcoin. However, the Ravencoin protocol means that its market cap of total supply, block rewards and mining algorithm is optimised specifically for decentralised mining and efficiency when transferring assets.
How does Ravencoin create assets?
Ravencoin (RVN) is a blockchain designed to efficiently handle the creation of a token. Tokens issued on this peer to peer blockchain network are created for many reasons.
The only stipulation is that the purpose of the Ravencoin token is to transfer assets from one person to another.
The platform utilizes a coding structure that has a Bitcoin foundation. That is, the coding infrastructure of RVN (Ravencoin) is based on a Bitcoin fork.
Therefore, Ravencoin RVN gives token issuers an alternative to blockchains that depend on smart contracts, such as Ethereum.
The advantage of Ravencoin over other secure network platforms is that its consensus mechanism and the security model is designed for more decentralized mining.
Who backs Ravencoin?
Ravencoin (RVN) is backed by a subsidiary of Overstock.com called Medici Ventures.
The blockchain project launched in 2018 along with its RVN token/coins. There was no pre-sale or ICO intended to provide more democratic access to the project than we’ve seen with other key platforms.
As there was no pre-sale or pre-mine of its coins, no tokens were put aside for advisors, members of staff, Medici Ventures people, developers, any board member or other individuals involved in the project early on.
The Ravencoin Foundation
Two years after launch, in 2020, the Ravencoin Foundation was created. This is intended to ensure the project becomes independent from Medici Ventures.
The Ravencoin crypto is open source, which means that almost anyone can contribute to the developers’ code.
A unique mining algorithm
While its design is similar to Bitcoin, Ravencoin developers made several significant alterations to the protocol. These changes allow the creation, transfer of coins and transactions launched on the network.
In the same way as Bitcoin, Ravencoin uses a Proof of Work (PoW) mechanism for network securities.
However, its use of hashing algorithms is different. The hashing algorithm used by Ravencoin is called KawPoW, which replaced the earlier X16R.
What is different about Ravencoin’s hashing algorithm?
KawPoW is designed to allow more decentralized mining of tokens than the algorithm used by Bitcoin, which is called SHA-256.
In specific terms, KawPoW resists mining through the use of ASICs (application specific integrated circuit chips).
This specialist computer hardware is only available at a high price and is generally seen as making industrial-scale mining more profitable than that done by individual miners.
Ravencoin isn’t the only crypto that has launched hashing algorithms to combat the use of ASICs. Other crypto companies, such as Litecoin, use similar algorithms for the same reasons.
Industrial mining using ASICs can lead to centralized miners, which affects the entire network’s security.
Bitcoin fork that is asset aware
Tokens can be issued on Bitcoin’s original blockchain, but this can lead to problems. Bitcoin nodes are designed to recognize the issuance of coins/tokens. Therefore, every transaction that intends to transfer a crypto token on the BTC blockchain must also send enough Bitcoin to be recognized by the protocol to make it valid.
If the user finds that they have accidentally spent this BTC during this transaction, the token is destroyed.
Ravencoin works differently to solve this problem without resorting to the introduction of smart contracts or a non-PoW model.
Features that separate the Bitcoin and Ravencoin consensus include the value of the block reward. At the time of writing, Ravencoin’s reward is 5,000, while Bitcoin’s is 6.25. Data does change as the coins fluctuate in value.
Block time is also different, with Bitcoin taking ten minutes against Ravencoin’s one minute.
The total asset supply is different, with RVN’s market cap set at 21 billion versus BTC’s market cap set at 21 million.
As we’ve already touched on, Ravencoin developers also changed the code data used in Bitcoin’s protocol to allow issuing of coins and the transfer of assets on the network to be easy and accessible.
Examples of RVN crypto use in the real world
Ravencoin issues coins/tokens that represent more assets from the real world, including virtual goods, shares of stock, rewards, gold and lots of others from one party to a different one.
In 2018, for example, Chainstone Labs (a digital securities organisation) issued more than 12 million digital shares on the Ravencoin blockchain.
Ravencoin can also be used to create NFTs using MangoFarmAssets, which is an RVN wallet platform.
Furthermore, the Binance Smart Chain (BSC) offers a tokenized RVN version. This can be used for trading, lending and borrowing in DeFi (decentralized finance) apps.
Unique infrastructure
Ravencoin utilizes a unique infrastructure as a network based on Bitcoin that offers users features that enable them to trade and launch tokens.
As there are no smart contracts involved, Ravencoin is a good option for a company or industry that needs to launch a digital token to use mostly for asset transfer.
The latest crypto news suggests that it’s becoming more and more popular with those who want to issue tokens.
Well positioned in the industry.
We think that Ravencoin is one of the coins well positioned to attract the attention of a large number of miners following Ethereum’s move to Proof-of-Stake (PoS) in January 2022.
The project is a one use case specific blockchain with a single purpose: asset transfer via blockchain. This includes many different assets, including property deeds, for example.
Users can create and transfer ownership on their blockchain easily and quickly. With Ethereum fundamentally changing how it works, we can expect RVN to become more popular with miners.
Ethereum — what’s happening for informational purposes?
As mentioned above, Ethereum is in the process of moving to PoS. This means that there will be no more mining of coins using the Ethereum blockchain.
NiceHash has about 27% of the entire Ethereum hashrate. Miners will therefore move to other coins when the switch to PoS is complete and will naturally choose the most profitable coins when this happens. These include Ravencoin and Ergo, for example.
Ravencoin price predictions
A fork of Bitcoin, Ravencoin can facilitate much faster transactions.
As it’s purpose-built to transfer assets, the whole process is easier and more accessible for users.
As the project grows, more people will use the coin in the creation of assets. This will, in turn, increase the Ravencoin price and the interest in the community for mining it.
A recent Ethereum fork, which is one of the stages necessary for moving towards PoS, sent the Ravencoin price up by about 60%.
As the project is still relatively new, having only launched in 2018, it has enormous potential to grow further. We expect the Ravencoin price to continue to rise as Ethereum moves further towards its goal of becoming PoS.
At NiceHash, to explore the project’s future and find out more, we’ve invited the lead developer Tron Black to our Talkshow in September 2021. You can find out more about this here.
Originally published at https://www.matjazskorjanc.com on August 31, 2021.
