Cryptoassets Explained: Ravencoin – Ravencoin USD (Cryptocurrency:RVN-USD)


Purpose and Classification Ravencoin ( RVN-USD ) is a fork from Bitcoin ( BTC-USD , COIN , OTCQX:GBTC ) core that focuses on being decentralized, fast, ASIC-resistant and energy-efficient. Ravencoin boasts such investors as Patrick Byrne, the CEO of Overstock, who claimed that he invested millions in the tokens. Byrne said of Ravencoin: It’s Bitcoin,…

Purpose and Classification Ravencoin ( RVN-USD ) is a fork from Bitcoin ( BTC-USD , COIN , OTCQX:GBTC ) core that focuses on being decentralized, fast, ASIC-resistant and energy-efficient. Ravencoin boasts such investors as Patrick Byrne, the CEO of Overstock, who claimed that he invested millions in the tokens. Byrne said of Ravencoin:
It’s Bitcoin, but a thousand times more energy efficient.
– Cointelegraph
(Source: Ravencoin homepage )
Taxonomy Classification
Utility token.

Age, History, Current Status Ravencoin was launched this year after an announcement post on the Bitcointalk forum . They generated some buzz on Cointelegraph, and Peter from Decentralized TV made a short video about them back in February 2018.
(Source: YouTube )
You may recognize Peter as the “Bitcoin Lambo” guy. But really he’s a hard-working entrepreneur with many businesses and a cult-like following .

Ravencoin is now live, and they have wallets for all major platforms, including mobile and desktop.
(Source: Ravencoin website )
This is impressive to me because they didn’t have an ICO and pay the founders millions of dollars. This is all the work of a dedicated community which appears to be quite active for being so young. This is how Bitcoin got its start – people working on the project just because they believed and hoped that it would turn into something later. Bullish, in my opinion.
Software Development Ravencoin was forked from Bitcoin core, and you can clearly see this on their GitHub page.

Taking a look at the activity levels, I like what I see.
(Source: GitHub )
Eight authors pushing 42 commits is not bad at all.

Especially since this coin did not have an ICO and claims to be leaderless.
Market capitalization Ravencoin comes in 72nd in market cap as I’m writing this on October 21st, 2018. CyberMiles is just to the north, and GXChain is just to the south. However, since Ravencoin has gone up 33% in the last 24 hours, there’s no guarantee that it will be in this position by the time you read this article.
With a market cap of $99 million, Ravencoin has exchange volume that dwarfs its neighbors’ puny $1.2 million and $3.2 million over the last 24 hours. This is bullish, at least in the short term.

Since I started writing this article, the coin has moved from rank 72 up to rank 59 – what a bull run! It is now trading for $0.05 with a market cap of $111 million.
Exchange liquidity Ravencoin is listed on quite a few exchanges, such as Bittrex and Upbit, but Binance ( BNB-USD ) has the lead by far with 85% of the exchange volume.
(Source: CoinMarketCap )
Token issuance model Ravencoin seems to be following the lead of many other coins that have forked Bitcoin, and increased the coin cap from 21 million to 21 billion.

This change is merely psychological (because you can divide cryptocurrency into ever smaller and smaller pieces), but it seems to be catching on.
The block times in Ravencoin have been lowered to one minute, which is 1/10th the time it takes for a Bitcoin block.
As with Bitcoin, tokens are issued from Proof of Work (mining), but Ravencoin has a novel approach that focuses on their own algorithm called X16R.
Tokens are issued to miners who discover blocks, but the algorithm changes after each block, hopping randomly between 16 different possibilities. From the X16R whitepaper :
Some of you, if you are knowledgeable about mining cryptocurrencies, might be asking, “Hey, isn’t this what X11 already does?” X11 is the algorithm used by Dash ( DASH-USD ) and a few other coins.
Well, not exactly. Because what X11 does is to run several algorithms in a chain, so the output of one becomes the input to the next.

However, eventually they started making ASIC machines that could handle this, so the ASIC resistance broke down.

Why do people care about ASIC resistance?
Let’s look at the impact ASICs had on the largest X11 mined coin, Dash. Essentially, it increased the centralization of the network, and it made mining with a GPU (which is an easier form of mining – anyone with a gaming computer can take part) completely unprofitable. The new ASIC machines from Bitmain hit the network and spiked the difficulty so high that as the price dropped, the miners started unplugging in droves (although the hash rate seems to have been recovering again lately). See below:
(Source: BitInfoCharts )
If you happened to be one of the first ones to get your D3 dash miner, you were making hundreds of dollars per day in October and November 2017. Today, you’re lucky to make spare change, if anything.
(Source: Amazon )
This shift increases the hash power of a network by orders of magnitude, but also concentrates it in the hands of a few large cryptomining operators.

Bottom line, there are trade-offs.
Security model A large part of the security model comes from piggybacking off of Bitcoin, but the X16R algorithm plays a part too. You see, Bitcoin does have a security issue when it comes to the centralization of mining giants in China. With the overwhelming majority of equipment coming from China, and the majority of mining pools controlled in China, geopolitical pressures could have negative impact on the Bitcoin network.
What Ravencoin hopes is that by being ASIC-resistant, they can spread out miners across the globe, reducing this kind of risk. This should enhance their security if they can pull it off.

Whitepaper Ravencoin has two whitepapers: one for their coin and one for their custom mining algorithm.
At the top of the Ravencoin Whitepaper , we see this:
Thank you to the Bitcoin founder and developers.

The Ravencoin project was launched based on the hard work and continuous effort of over 430 Bitcoin developers who made over 14,000 commits by the date of the Ravencoin code fork. We are eternally grateful to you for your diligence in making a secure network and for your support of free and open source software development. The Ravencoin project is built on the foundation you built.
This I really like. It takes a special kind of jerk to fork Bitcoin’s code and then go around trash-talking Bitcoin. I mean, do you hear Neil deGrasse Tyson trash-talking Isaac Newton? Did Einstein trash-talk Pythagoras? It’s absurd, but it happens all the time in the crypto space.

Keeping it friendly with Bitcoiners is a great move. Being a part of the community rather than trying to take over the community – that’s an important change in perspective. This will help to bring more people to their cause.
They continue (from the Ravencoin Whitepaper):
Ravencoin is designed to efficiently handle one specific function well: the transfer of assets from one party to another. One goal of the Raven protocol is to create a use case focused blockchain and development effort which can create code, providing advantages for specific use cases, while contributing to open source code which could be used by Bitcoin or other projects.
What they mean by a “use case focused blockchain” is that Ravencoin wants to integrate functionality similar to what Ethereum ( ETH-USD ) had done with their ERC-20 and ERC-721 and what Mastercoin tried to do and in the same vein as “colored coins.” The concept here is that you can build things on top of Bitcoin that have more functionality, different functionality, while leaving the base protocol clear to be relatively “stupid” and fast.

The whitepaper continues (from the Ravencoin Whitepaper):
The solution is to create a bitcoin-like system that is fully asset aware
Let’s jump ahead to the conclusion, where these ideas are summarized (from the Ravencoin Whitepaper):
Ravencoin is a platform coin built on the UTXO [19] model of Bitcoin.

Modifying Bitcoin code to add these capabilities is not practical, but Ravencoin is a platform built from a code fork and issuing newly mined RVN. Ravencoin will be adding assets, rewards, unique assets, messaging, and voting. The Raven protocol’s capabilities will be rolled out in phases which will be done as a planned hard fork upgrade. The code base is designed to allow users and developers to maintain a secure, decentralized, and tamper resistant network.
The Ravencoin project can also serve as a base and starting point for projects, second layer solutions, experiments, and business ideas which might benefit from either the Bitcoin-based code base with adjustments or the native additional features added to the Ravencoin blockchain.
I like what I’m seeing here.

I think they have a good point and a good plan. But time will tell if they can pull this off and be successful.
Community Ravencoin is very new, but they have managed to accumulate 15k followers on Twitter and 4.6k subscribers on Reddit. This project seems to be growing quickly, and I expect the recent price run-up will bring more people in too.

Criticism I don’t really have much criticism for this project, except that it’s still so new we have no idea if the project will be here to stay.

With the failure rate of new projects being so high, even promising ones like Ravencoin should be eyed cautiously.

Conclusion I like Ravencoin. They have an active development team, even without having an ICO. They took Bitcoin’s model and extended it (just like Dash, Litecoin, Digibyte and many others have), while not being disrespectful to the people who worked very hard to make Bitcoin what it is today, the center of the cryptoasset universe.
Are you a Ravencoin investor? Did you catch the recent bull run? Let me know in the comment section below.
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Disclosure: I am/we are long BTC-USD, ETH-USD.
I wrote this article myself, and it expresses my own opinions.

I am not receiving compensation for it (other than from Seeking Alpha).

I have no business relationship with any company whose stock is mentioned in this article..

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