Introduction to Ravencoin: Open Source Token Platform
What is Ravencoin? This peculiarly named blockchain project is turning heads in the crypto community due to the developers and contributors involved, but what exactly does it do? In this article we will go over the basics, core concepts, and features of the Ravencoin protocol.
Contents
- …The Basics
- …The Purpose
- …The Features
- …F.A.Q.
The Basics
First, the basics: At its core, Ravencoin began as a fork of Bitcoin. That means that the code from the Bitcoin repository was cloned (or “forked”) to serve as the foundation of the Ravencoin protocol. From there, various changes were made to the code to achieve the alternative purpose of the project.
Although not central to that alternative purpose, some basic but important changes made to the Bitcoin code include:
- Block Time (1 Minute)
- Total Supply and Block Reward Denominations (21 Billion Total Supply, 5k Block Rewards)
- Mining Algorithm (X16R)(Read more about the algorithm here: https://ravencoin.org/wp-content/uploads/2018/03/X16R-Whitepaper.pdf)
In addition to these basic changes are a multitude of others, including the key changes which required a fork from Bitcoin and allow Ravencoin to serve its purpose, which is outlined later in the article. (You can follow along with code changes being made in the “Develop” branch of the GitHub. (https://github.com/RavenProject/Ravencoin/tree/develop )
Bitcoin forks are common, as the code is open-source. In other words, it is free for anyone to access, implement, and experiment with however they like; without requiring anyone else’s permission. The Ravencoin protocol and development environment are no different; and this distinction is integral to the project. You will often find a document titled A Cypherpunk’s Manifesto pinned as an important message in several of the loosely tied Ravencoin communities. Published by Eric Hughes in 1993, the very roots of blockchain itself can be traced back to the ideals and goals laid out in this manifesto, which outlined the responsibility of coders to defend and work toward a free and open society in which people still have the right to privacy. One might argue that these fundamentally activist roots of Bitcoin are inseparable from the rest of the project, and Ravencoin was intentionally designed the same way. There was no Ravencoin ICO, there is no central Ravencoin corporation, and no funding was ever raised for the development of the project; towards which anyone can contribute. Anyone can participate in the network, and no one can control it; this community is not likely to ever consider a vote to roll back transactions on the chain. When the network went live it was announced beforehand, and all participants had the same opportunity to mine RVN as everyone else; there was no pre-mined supply or developer set-aside.
Thank you to the Bitcoin developers.
The Ravencoin project is launched based on the hard work and continuous effort of over 400 Bitcoin developers who made over 14,000 commits over the life to date of the Bitcoin project. We are eternally grateful to you for your efforts and diligence in making a secure network and for your support of free and open source software development. The Ravencoin project is made on the foundation you built.
— Ravencoin: A digital peer to peer network for the facilitation of asset transfers.
In honor of Bitcoin’s ninth anniversary, the first block of the Ravencoin chain, also known as the genesis block, was mined on January 3rd, 2018.
The Purpose
If Bitcoin is all about the independent ownership and control of cash wealth, then Ravencoin is all about the independent ownership and control of assets and securities.
“Only a third of the world’s wealth is in cash, so we’re fighting this great, valuable, noble fight to say let’s make bitcoin or things like bitcoin become the new global reserve currency. Wonderful, I’m all there, but it’s only a third of the world’s money. Even if you win you still haven’t changed the whole global economy. You need to give people that kind of same power for their equities.”
— Bruce Fenton, Board of Directors at tZero, Former Executive Director of the Bitcoin Foundation, VP at Morgan Stanley, 20+ Stock Broker, Financial Manager, & more…(from “The Flippening” podcast, Part 1 of “Tokenize The World: A Security Token Audio Documentary”)
In its simplest form, Ravencoin can be described as a platform for tokens and tokenized assets. The creation, issuance, and trading of these digital assets is the primary use case of the project. Features of the protocol happen to make it especially equipped for the issuance of security tokens, which can represent investment agreements between people, property, equity, and more; as well as anything from collectible goods to “utility tokens”. (You can learn more about the different supported asset types later in the article.)
A deceptively simple concept, the world has already begun to understand the potential for tokens as an asset market; and yet, surprisingly few projects seem to be focused on this as their core use case. Even fewer projects still were fairly launched with no ICO, no pre-mine, and no developer set-aside of funds. As of this writing, ICOs have already raised over $6.3B in 2018, despite uncertain market conditions and a significant drop in the number of offerings. Some say this pales in comparison to the potential of real contractual investment agreements and assets being traded in token form, as opposed to speculative utility tokens or commodities. This concept of securities on the blockchain, or “security tokens”, are an increasingly popular topic, as the idea proposes to not only provide new benefits such as programmability, increased liquidity, and more; but also entirely replace a multi-trillion dollar infrastructure of inefficient third party intermediaries. One of the loudest advocates of this idea is the co-author of the Ravencoin whitepaper himself, Bruce Fenton:
While you will still always have to trust the issuer of an asset itself, the number of entrusted third parties and inefficient redundancies involved in the legacy system containing these financial assets is quite astounding. Truly controlling your assets is nearly impossible, moving them takes days to weeks, and they technically aren’t even in your name!
“Despite what you believe, you don’t own your stock. The 12 pages in your brokerage agreement contain pledges & hypothecation agreements. If Apple issued a stock certificate, it wouldn’t bear your name. It would have The DTCC’s” — Bruce Fenton
If you believe in the benefits of tokenization, then it is hard to argue against the benefits of tokenizing securities. You can read more about security tokens in general throughout the web, including at these recommended sources:
Security Tokens: How Wall Street and Blockchain Will Collide
https://medium.com/future-blok/security-tokens-how-wall-street-and-blockchain-will-collide-8526634a9230Tokenize The World: A Security Token Documentary
https://blog.nomics.com/flippening/security-token-documentary/
Ravencoin sets itself apart from other token platforms through its unique approach to the use case. On a basic level, unlike layer 2 solutions, which build separate infrastructure on top other blockchains, such as the Omni Layer project which you can use to create tokens on top of Bitcoin, Ravencoin is being designed from the ground up to support these features natively. It will also support the porting of other layer 2 tokens to the RVN chain, something which will be facilitated by the operation codes in the protocol.
Ravencoin even offers an alternative approach to the token application of Ethereum, boasting a native, asset-aware wallet that facilitates the intuitive creation, issuance, transfer, and management of tokens; opting for unique asset names as opposed to contract addresses, and utilizing Rootstock (RSK) to keep smart contracts off-chain instead of bundling code with transactions on the blockchain. In a sense, you could describe Ravencoin as a fairly launched, Bitcoin-based alternative to Ethereum as a token platform; but made specifically for those tokens, tokenized assets, and security tokens; rather than a decentralized computer for applications that also happens to be used for those things. It also makes a few different design choices in that regard; which issuers, developers, and users may or may not find useful for their needs.
The Features
In addition to the myriad of unique aspects outlined above (especially the fair launch!), Ravencoin boasts a few features that may prove to be useful for the token platform use case:
Native Client / Wallet
The native Ravencoin wallet is capable of asset creation, management, and transfer. This client is also asset-aware, as assets have unique names, as opposed to just contract addresses. There is no need to download a special wallet for your tokens, nor a special developer browser to upload or execute any sort of smart contract to create them, it is simply a core feature of the blockchain. In fact, smart contracts are not executed on-chain at all, unlike Ethereum, so there is no need for gas fees as compute power does not fluctuate depending on efficiency of lines of code; you can read more about this below under the “Smart Contracts” feature outline.
Dividends
Issuers of tokens will be able to send dividends in the form of RVN to token holders, directly. This is a critical function of many security arrangements, and allows issuers to manage the rewards of investors more easily.
Messaging
Stakeholders can be messaged by the issuer, allowing them to actually communicate with their token holders, engage with their investors, and even initiate elections. This system will be opt-out capable, and use uniquely created assets that act as “talking sticks” to open a potential communication channel.
Voting
Using the messaging system, issuers can call and notify stakeholders of a vote. Holders of the token will be issued VOTE tokens which they will be able to use to represent their vote.
Different Asset Types
Unique Assets
Issuers can also create singular, unique tokens of which only one (1) will ever exist. This is especially useful for representing ownership of a single unique asset.
Sub-Assets
After issuing an asset, issuers can then also issue sub-assets that exist under a sub-category of the other for an additional fee.
(For more information on specific asset types supported by RVN and how to create them, you can check out a more granular article on those details by Stillman [no affiliation to Future Blok]:
https://medium.com/@stillman_crypto/the-ravencoin-report-rvn-50ca8872c0de )
Burn Mechanism (Utility for RVN)
Tokens are issued via a burn fee which can only be paid in RVN. That means that you cannot create assets without RVN! In order to create assets it will generally cost 500 RVN, and then another 100 RVN to create sub-assets, which is sent to a burn address to be taken out of circulation forever. (These numbers are subject to change as the final functionality and economic design of these features are worked out and debated within the community of developers)
Smart Contracts (Sidechain via Rootstock)
Ravencoin does not have operations of smart contract code being executed as transactions on-chain, which is a huge difference to Ethereum when it comes to the potential for scaling. Opting instead for a second layer solution, smart contracts will still be supported via RSK, which will allow the network to focus on completing transactions, not compiling and executing custom code.
Segwit Support
Segwit support will allow for lightweight and fast transactions, by removing unnecessary data when storing data. You can read more about segwit here: https://blockgeeks.com/guides/what-is-segwit/
Lightning Network Support
Ravencoin will be supported on Lightning Network, which means that you will be able to complete extremely fast transactions and swaps using this third party solution.
References to External Metadata
Although not the biggest deal technically, the Ravencoin protocol will allow for references to outside documents, which is very important for contractual agreements between people, i.e. securities. It is likely that as we begin to enter into the “Security Token Era” it will become commonplace for investors to ask for and expect to see the real world contracts in which certain assets are legally defined.
The FAQ
- Why not just use Bitcoin?
This is a common question that was perhaps best answered by the Twitter of RavencoinTalk.org, a Ravencoin-based discussion forum:
This is a great question. There are pros and cons to utilizing different chains for different uses, and anyone would be hard-pressed to try and argue that Bitcoin doesn’t have the strongest chain. However, the protocol level changes required to allow the native tokenization and transfer of assets on the Bitcoin blockchain would be long and arduous to get approved, and goes against the development of the core use case of Bitcoin. That means core developers would be expending time and resources to develop something that does not further the purpose of the project. Also, there are other unique features that have been implemented in the code changes that an issuer may or may not decide is useful to them, which could factor into their decision as to which blockchain to utilize. However, all that said, anyone can already utilize 2nd layer solutions on Bitcoin to create new tokens, if they want. We are building an open source project that we hope will be better suited for this purpose, because it has been designed for it.
2. What is Overstock.com, tZero, and Medici Ventures’ involvement with RVN?
Overstock.com has a vested interest in Ravencoin. Having revealed that they are holding over 85 Million RVN (as of this writing) for themselves, they are clearly interested in seeing it succeed. Their venture capital firm, Medici Ventures, has full-time developers contributing to its development on company time, and are even mining the coin with their own rigs. It probably goes without saying then, that executives on the board at tZero, which is an Overstock subsidiary, also have a vested interest in seeing RVN succeed. Their plans for the coin and how it plays into their strategy are as of yet unknown, but it is safe to say they see big things in the project’s future. That being said, the project is open-source, which means anyone who contributes to the project does so of their own free will, at their own risk, and can stop at any time.
3. Is Ravencoin a Polymath competitor?
No. This is a common misconception, but RVN and POLY are not competitors; in fact, they are complementary ideas that could actually work together. POLY is a currency that you use to pay for services within the Polymath ecosystem. These KYC, AML, and STO services would still be necessary for someone if they chose to create tokenized assets on RVN if they did not have the means to do it themselves. Polymath only builds security tokens for their clients via the Ethereum platform today, but have already announced their plans to be blockchain agnostic in the future. Polymath could offer to build security tokens on RVN, Bitcoin, or anything else they want, and it would still cost clients in the POLY currency. Don’t be surprised if Polymath announces support for tokens on Ravencoin one day, because it would actually be a great fit.
4. Where can I join the Ravencoin community?
Ravencoin has a robust and decentralized community, so take your pick!
RavencoinTalk.org is an ad-free forum where you can discuss Ravencoin in all facets, follow along with development, and even connect with other Ravencoin communities; this thread with a list of all the different communities is a great place to start:
For more information about Ravencoin, you can also visit these websites (be aware that like Bitcoin, there is no “official” Ravencoin anything, as anyone is free to use the name and license; make sure to keep that in mind and DYOR, these sites are all run by community members):
https://getravencoin.org
https://ravencoin.org
and you can follow these twitter accounts to stay up-to-date:
https://twitter.com/ravencointalk
https://twitter.com/Ravencoin
https://twitter.com/Ravencoiner
That’s it for now! Ravencoin seems to be a legitimately interesting project with cypherpunk roots. It’s an open source experiment that reminds us exactly what it is that made Bitcoin special, and it will be fun to see how it compares to projects that didn’t take account of these important details in the long-run.
— Future Blok —
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