What is Ravencoin (RVN) and how does it work? All you need to know

What is Ravencoin?

The Ravencoin blockchain is open-source software that enables the issuance and transfer of digital assets. It was created by modifying Bitcoin's codebase to add more features for a distinct purpose. The protocol incentivizes a network of computers to operate the platform, enabling users to create and transfer new blockchain assets representing real-world commodities, securities, collectibles, or loyalty rewards.

How does Ravencoin work?

The underlying structure of Ravencoin closely resembles that of the Bitcoin blockchain, but it incorporates several key differences to facilitate the creation and transfer of tokens within its network.

Despite being initially derived from a fork of the Bitcoin blockchain, Ravencoin has established its own distinct network, assets, and protocols. To make mining more accessible on its network, Ravencoin utilizes a modified version of the Proof of Work consensus mechanism known as KAWPOW. Similar to Proof of Work in Bitcoin, KAWPOW secures the Ravencoin protocol, verifies transactions, and distributes newly minted RVN tokens among a network of computers running the Ravencoin software.

Who founded Ravencoin?

In 2018, Bruce Fenton, Joel Weight, and Tron Black co-founded the Ravencoin crypto project. Unlike many in the cryptocurrency space, all three had extensive experience in business and software development prior to starting this venture.

Fenton was a well-known figure in crypto, having served on the board and as executive director of the Bitcoin Foundation. Before entering the blockchain world, he had a successful career in investment banking, including a vice president role at Morgan Stanley dating back to the 1990s.

Weight currently serves as the chief technology officer at Overstock.com, the parent company of Medici Ventures, which launched the Ravencoin blockchain. He previously held positions as the chief operating officer and chief technology officer at Medici Ventures and has a background as a software developer dating back to the dot-com era.

Like his co-founders, Black has a strong track record leading software development companies as CEO. Since 2013, he has been involved in various crypto projects, including co-founding CoinCPA and Verified Wallet, and working as a senior software developer at t0.com. He was the principal software developer at Medici Ventures during the development and launch of Ravencoin and currently serves as the president of the Ravencoin Foundation.

In 2020, the Ravencoin Foundation was established as a non-profit organization dedicated to supporting and safeguarding the Ravencoin project.

What sets Ravencoin apart from other cryptocurrencies?

Ravencoin introduces four significant modifications from the original Bitcoin code:

• Users can create custom assets on the Ravencoin blockchain, rewarded with 5,000 RVN.
• Block time is reduced to one minute.
• The total supply of RVN is capped at 21 billion, a thousand times more than BTC.
• The KAWPOW hashing algorithm aims to reduce mining centralization caused by ASIC hardware.

Recent additions include the ability for token holders to send messages to others using IPFS and display them in wallets using JSON. A token voting system allows token holders to propose questions, conduct polls, and gather votes.

Ravencoin maintains its commitment to decentralization by avoiding pre-mining, pre-sales, or allocation of coins to developers, the Medici Ventures team, or any other project participants.

What is the underlying value proposition of Ravencoin?

The value of the RVN coin comes from its essential role in operating the Ravencoin network, as it is required for creating new assets. Similar to other Proof of Work systems, Ravencoin compensates miners for adding new data to the blockchain after verification by the network.

RVN ownership enables users to create custom tokens with distinct features and monetary rules. As Ravencoin gains popularity as a platform for creating and trading digital assets, it could potentially evolve into a long-term store of value.

What is the current circulation supply of Ravencoin (RVN) coins?

Of the total capped supply of 21 billion coins, approximately 13.85 billion RVN are currently in circulation. Estimates suggest that the entire supply of 21 billion RVN will be minted by approximately 2080.

Other technical data

The block reward for Ravencoin, currently set at 5,000 RVN, will decrease by half every 2.1 million blocks, approximately every four years depending on block time, until it reaches its minimum. This means that 50% of the total market cap will have been mined by 2022, 75% by 2026, with mining continuing at a reduced rate thereafter until all 21 billion RVN have been mined. Miners will continue to be incentivized throughout this period because, like BTC and other similar blockchains, they will still receive transaction fees as a reward.

What measures are in place to ensure the security of the Ravencoin network?

Ravencoin secures its network using a consensus mechanism similar to Bitcoin's Proof of Work protocol. However, it employs a different hashing algorithm called KAWPOW, which replaced X16R and X16RV2 in May 2020. KAWPOW is designed to promote decentralization by being ASIC-resistant, enabling individuals without access to expensive mining hardware to participate.

This reliance on the KAWPOW algorithm is complemented by a fair coin distribution method. This approach aims to prevent any individual or group from acquiring enough hash power to execute a 51% attack or manipulate the market through price fluctuations.

Despite these security measures, Ravencoin experienced a successful hack in June 2020, where hackers minted 315 million RVN coins, valued at approximately $5.7 million at the time. Fortunately, no Ravencoin holders were directly affected, and they could continue using their holdings as usual.

How to use Ravencoin?

Ravencoin offers coin holders the enticing prospect of serving as a platform for digital tokens representing real-world assets. Additionally, it can extend the security and transaction model of blockchains to new asset classes.

• Asset issuance and transfer: Users can create a new crypto asset by "burning" (i.e., destroying) a set amount of RVN coins and assigning a unique name to their new token. This process allows issuers to specify various characteristics for their token, such as the total number of tokens issued, fractional divisibility, and fungibility. This approach could be beneficial for cooperatives looking to allocate resources or capital among participants. Issuers can create different categories of token holders, such as Class A Shareholder, Class B Shareholder, Lifetime Member, etc.
• Rewards: Ravencoin enables issuers to reward token holders in a straightforward and equitable manner. For instance, a cooperative issuing its own tokens to participants can automate and ensure fairness in dividend distributions to selected categories.
• Messaging: Token creators can use Ravencoin to communicate with their token holders, providing updates about a company, organization, or community. All Ravencoin tokens are fully transferable, allowing holders to delegate their stake or sell it if desired.

Investors may also view Ravencoin as a potential store of value, especially if they anticipate a shift in market sentiment towards decentralized blockchains where users can create their own tokens.

How to choose a Ravencoin wallet?

Ravencoin offers its own dedicated desktop wallet for Windows, Mac, and Linux, along with a paper wallet generator on their website. However, RVN is compatible with various third-party wallets. Potential investors or miners should conduct their own research when selecting a wallet.

For the most secure storage option, hardware wallets or cold wallets like Ledger or Trezor are recommended. These wallets offer offline storage and backup, but they can be more complex to use and are typically more expensive. They are best suited for storing larger amounts of RVN by experienced users.

Software wallets provide a free and user-friendly alternative. They can be downloaded as smartphone or desktop apps and can be custodial (private keys managed by the service provider) or non-custodial (private keys stored on your device). While convenient, they are considered less secure than hardware wallets and are better suited for smaller amounts or less experienced users.

Online wallets, or web wallets, are also free and easy to use, accessible from any device with a web browser. However, they are considered less secure than hardware or software wallets as they are connected to the internet. It's crucial to choose a reputable service with a strong security track record. Online wallets are suitable for holding smaller amounts or for frequent trading.

Kriptomat offers a secure storage solution for RVN, allowing you to store and trade your tokens with ease. Their platform provides enterprise-grade security and user-friendly functionality, making buying, selling, or trading RVN quick and easy.

Ravencoin mining

A core principle of Ravencoin's philosophy is to make mining accessible to individuals with modest hardware investments, rather than being dominated by large, centralized operations with substantial resources for hardware and energy.

As a result, mining RVN has been streamlined and simplified. It involves creating a wallet, downloading the necessary software, and entering the correct wallet address.

It's important for prospective miners to note that Ravencoin will undergo a halving in January 2022, reducing the block reward from 5,000 RVN to 2,500 RVN.

Advancing decentralization

Ravencoin unquestionably brings significant improvements over blockchains like Bitcoin, particularly in decentralization, token creation, asset transfer, messaging, and voting. These enhancements align with Medici Ventures' original aim of offering users fairer and more democratized access to blockchain structures. They also offer businesses, organizations, and communities a simpler and safer method for distributing assets and rewards among their members. Additionally, Ravencoin has the potential to serve as a foundation for second-layer solutions, experiments, and business ideas that could benefit from its Bitcoin-based code adapted with additional features.

Given its potential to impact users beyond the cryptocurrency sphere, Ravencoin is undoubtedly a cryptocurrency to monitor closely.