“Why Ravencoin?”

Recently I came across a post with the aforementioned question, and it had me pondering how I could succinctly, effectively, communicate what I have come to know about this project after two years of research. It spawned a series of great questions (thank you Poerroe and DynamicMiffo) and challenged me to convey important concepts that more people should be thinking about when evaluating the real value (intellectual, societal, financial) of a project. I compiled the responses in this article, which hopefully you may find helpful to share with others who may have the same difficult questions.

Start with the basics: Ravencoin is the only censorship resistant chain with digital assets that have integrated voting, messaging/memo, dividends/rewards, and encrypted IPFS hash functionality at the protocol level. It is easy to use. It is based off of bitcoin so it has the added benefits of the collective brilliant developers there, which is the biggest brain-trust in cryptographic technology for the last decade. Though coding has taken almost two years now the coding is elegant in comparison to other solutions because the functions are within the layer 1 protocol. Less attack surfaces, less conversion and counterparty risk, less middlemen

Every other “solution” is smart contract masquerading as a token (technical issues with that which make it less than ideal), requires a programmer(s) to implement and manage, or is a centralized solution subject so censure or seizure.

(more on ETH not being designed with assets in mind: https://medium.com/@tronblack/ravencoin-better-than-erc-20-88a276d3e434)

Essentially if you think that the properties of bitcoin give it benefits over fiat (sovereignty) then it isn’t a stretch to consider those same benefits should be extended to all manner of digital assets. Sooner than later all assets will be digitized and cryptographic-secured tokens, people are yet to collectively realize the importance of the principle of sovereignty to this enormous realm. The significance of being able to self-custody digital assets when digital assets include everything from real estate to videogame skins may ultimately be more impactful than self-custody of digital gold (one type of digital asset).

RavenCOIN is a built in settlement tool and is used to generate the tokens which ride on the chain which is secured by miners as a service for operating a decentralized ledger. This is a function of mining debt. The assets then are of multiple types all with different types of use cases.

“Why would one switch-over?”

More poignant a question might be: do you want to use ETH which essentially requires a special programmer and associated costs to design, or do you want to be able to do it yourself in under a minute from the wallet? Do you want easy to use built in functions that one would expect from a complete economy in a box? Digital assets will be an enormous market space, it isn’t a zero sum game, but in terms of decentralized censorship resistant chains built for this purpose they are rare, you are looking at it in ravencoin. People deserve to have the independent option, rather than a database where someone somewhere can flip a switch and tell you what you can do or can’t do. I don’t even have time to get into the potential applications but the integrated features of voting, messaging, dividends, IPFS, tags, and restricted assets open up a lot of doors for people to cut out middlemen with all manner of derivatives whether it be content distribution and monetization, capital markets, supply chain, cap tables, independent club and communication networks, or whatever. Part of the fun is that these tools are free for anyone to experiment with and most of the uses and applications haven’t even been come up with yet, so it is exciting to see new ideas pop up as time goes on; clever tools for clever people.

Use your imagination. There are already many businesses utilizing Ravencoin as part of their business models because they find a public chain with these features valuable, as well as individuals, and entrepreneurs. The coin is listed on the Tzero app, and they are the leaders in the fledgling security token space by a mile.

“So what about the actual raven coin then? What is the point? Why would anyone really mine/buy/sell RVN? Ravencoin does not seem to have a particular big focus on payments, no merchant solutions, etc. Is it all about the assets? Or did I miss something?”

The raven coin is the built in settlement tool and the manifestation of mining debt which is directly exchangeable as currency. From a specification standpoint in all metric but hash (and of course the wonderful developer community) the coin is superior to bitcoin (in respect to block time and size, more favorable transaction throughput profile), litecoin. The value of a sovereign settlement device is well established as evidenced by bitcoin. In a “settlement layer” coin finality matters, UTXO matters. It is a necessary component of a closed economic system with interoperable compatibility with other cryptocurrency systems. You will see further emphasis on this with pegged assets that work as intermediaries between various forms of digital assets and public chains. Currency suffers from rehypothecation / inflation, maintenance of a settlement layer is crucial for financial stability of an economic solution.

In short, you are likely over/under-thinking it.

Regarding the term “merchant solutions”; it is a product of “solutions for problems that don’t exist” crypto scams. Many projects “printed money” (after giving the creators a nice slice) and then promoted usage of their gift cards with flimsy attempts at merchant integration. The problem is that no one is using them even with strong incentivizing. The reason is because those “solutions” aren’t built on sound economic principles and they lack utility. Use case, usage, necessitating access at a point of sale is a true driver for “merchant solutions”. I.e. merchants need to be using it for there to be a demand, without demand a “merchant solution” is worthless, as evidenced by no high utilization “merchant solutions” in existence anywhere even at the highest levels of implementation (even bitcoin utilization for this is relatively low, partially due to the properties of a “preferred currency”).

Instead focus on usage. If you have a complete money system in a box and someone can issue an asset and distribute and monetize content directly without counterparty risk existing within a sovereign system not subject to middlemen and the solution is useful to content creators then you will see solutions pop up, and since it is based on BTC that kind of porting is comparatively easy.

Ravencoin serves as the rails for assets, if you didn’t see that you definitely missed something.

“OK, I see the point of the asset concept. The assets are cool. Cool things could be done with assets. I don’t doubt that. But the actual RVN-coin? Why would anyone want that? What is the Unique Selling Point for that? Do the assets need RVN in any way (other than burning to create the asset)?”

You are at the destination but we didn’t fully cover the beginning.

I’ll try to bring us back a step, hear me out.

A decentralized censorship resistant ledger is like a service that miners provide. They convert a valuable resource (energy) into computational power that secures a chain. The reward for doing that work that makes the ledger operate are coins. The coins are then used, and recorded immutably, on the ledger. In the case of bitcoin the coins are thought of commonly as gold moving about and the ledger is like the railroad for that.

The coins have multiple usages in the case of Ravencoin: all the BTC principles still apply but the coins can also be used to be burned to generate assets which are also secured on the ledger, and the coins can be used to settle transactions in assets natively at the protocol level, without counterparty risk. That is a strong value if you are unfamiliar, if you aren’t familiar you need to study counterparty risk because it is a core financial tenet. Every time you introduce an interloper to a transaction or a conversion you inherit the risks that come with that third party. Those risks include security risks, theft, censorship, information harvesting, rehypothecation, the list is endless. Minimizing counterparty risk historically has been nigh impossible because of the fractured ledger system and medley of distrusting ledger users. The value of that alone cannot be overstated when it comes to certain markets, like securities, where settlement-slop leads to manufactured corporate assassination, fraudulent phantom-share naked shortselling, and all manner of insider manipulation.

(More on the phenomenon: https://www.bloomberg.com/opinion/articles/2017-02-17/dole-food-had-too-many-shares)

Now let’s make a comparison to bring this full circle. Imagine a company that provided a data base service with cloud computing. That company would expend resources to build the infrastructure for that; servers, employees, office space, marketing. People with database and cloud computing needs would pay the company operating those services money as a fee. If the company made a profit and offered shares of their company then people could invest and profit share in that company as well. That context, that “business providing a service” and the market participants are just like a “business” (in the case of bitcoin a decentralized group of miners) providing a “service” (the blockchain which is then censorship resistant and neutral unlike the database or cloud service in the business version). The business could throttle, block, or delete transactions they didn’t like or someone (the government) told them not to like. A sovereign ledger is not beholden to the whims of any one participant; everyone is free to use it without having to trust the ledger itself, which is a beautifully elegant first in history.

So you can see how the coin plays a unique role in a decentralized system because it is a reflection of the mining debt as a function of the service the ledger provides as a utility to different market participants, but it is also a settlement tool, and used to generate digital assets and pay for the functions the digital assets do like voting, messaging, dividends. It is native, it doesn’t require any outside manipulated system (fiat funny money) to operate.

So finally to look at the purpose, or value, of a coin in a decentralized system you shouldn’t be looking at the tertiary gimmicky stuff that centralized systems have to resort to in order to try to force adoption of their Schrute Bucks (merchant stuff or whatever their slick marketing people call it) you should first look at the VALUE the ledger as a service can provide to people and businesses because it is that utility which will drive the value of the coinage and thus attract the miners and speculators and users and so forth. In the case of Ravencoin it is the only decentralized censorship resistant chain that has these digital asset types at the protocol level (which is an important distinction from second layer + solutions), is easy to use, and has built in functions that mimic traditional market usage needs like shareholder voting, messaging, dividends/rewards, and encrypted IPFS hash that can be used tie into the coin and digital assets for content distribution and monetization.

“Why use a blockchain when we already have a working securities market and other types of asset distribution and monetization?”

A brief comparison of cost for issuance of a digital asset on NASDAQ vs. Ravencoin.

Ravencoin: 500 raven and minimal transaction fees.

Traditional NASDAQ method of “going public”: initial issuance average ~$2,000,000 + annual renewal fees, messaging shareholders: ~$75,000 per message.

The aforementioned context is a demonstration of what happens when a complex system is made elegant, that is to say; goodbye rent-seeking middlemen.

There are many potential use cases for the system because the system is comprehensive in features; entire business models can be done within the system without having to exit the system and introduce middlemen and counterparty risk or risk of censorship or seizure. The entire economic model is contained within the protocol and this sort of “economy in a box” is simply not available anywhere else as every other solution is centralized, federated, censured or requires additional middlemen or counterparty risks at one or more steps or conversions. A decentralized (no one party controls it) immutable (the trade is the settlement) ledger (everyone everywhere has the same record at the same time) that contains all of those features is unique and could provide significant value in many different market types. Ravencoin is Bitcoin for digital assets. Ravencoin will do to middlemen everywhere what Bitcoin is doing to the fed and other corrupt fiat issuers worldwide.

It is all about actual utility and specifications that drive decentralized chains and it takes some relearning if you are used to hype based speculative arguments for ICO tokens and so forth but the distinctions are important.