Ravencoin Halving
Pros and Cons
I’ve been mining ravencoin since February 2021. Prior to mining ravencoin, I mined ethereum. In 2020, I built an ethereum mining rig for less than $1,000 and continued to build it out as I was able to buy more graphics cards.
My total investment in the mining rig is now closer to $2,000 and the rig currently has six graphics cards. Why did I switch over to mining ravencoin instead of ethereum?
Three Reasons:
- ETH phasing out mining
- RVN halving in Jan. 2022
- RVN will remain PoW
What Is Ravencoin?
Ravencoin is a digital peer-to-peer network that aims to make efficient transfer of assets from one user to another.
It’s a fork of the bitcoin code that was announced in October 2017 and was released in January 2018.
The ravencoin white paper was published by Bruce Fenton, Tron Black, and Joel Weight. Fenton is known for his early and influential work in bitcoin, Black is a well-known software developer who has worked in crypto for nearly a decade, and Weight is also a well-known software developer who currently serves as chief technology officer at Overstock dot com.
Ravencoin is similar to bitcoin but differs in that its block time is one minute, the total coin supply is capped at 21 billion, and it utilizes a mining algorithm (KAWPOW) which mitigates mining centralization via ASIC hardware.
What does all that mean?
Ravencoin is efficient, relatively scarce, and encourages smaller miners to participate using graphics cards.
Ravencoin Halving
On January 11, 2022, ravencoin undergoes its first-ever halving event. This marks a big point in the history of the ravencoin network.
What’s a Halving?
A halving is when the block reward received by miners gets cut in half. Miners receive rewards for validating transactions and adding them to the blockchain.
Bitcoin has a halving roughly every four years, and that is the most “comparable” event to what ravencoin is about to experience. What bitcoin has done historically around a halving, however, cannot necessarily be compared to ravencoin or any other proof-of-work cryptocurrencies.
RVN Halving Pros
There are potential reasons for both ravencoin holders and miners to be optimistic about its first-ever halving event. I’ll cover both the bull and bear case for the halving but I’ll start with the positives.
Here’s the bull case.
Scarcity
At the halving, the amount of RVN received by miners gets cut from 5,000 to 2,500, making the total ravencoin in circulation more scarce. Because there will only ever be 21 billion RVN in existence, reducing the amount of RVN that is put into circulation makes it that much more scarce.
Scarcity can increase demand.
This is not a guarantee but that’s the intention. If demand increases along with scarcity, the price of RVN could also appreciate.
Price Speculation
Scarcity leads right into a potential rise in the price of RVN. If you look at the price of bitcoin historically, its price has increased. Despite any short term volatility, bitcoin has consistently risen in price, establishing higher lows as it does so, going as high as almost $70,000 as of writing.
Ravencoin could follow a similar trajectory to bitcoin in terms of price following its halving.
It’s not fully comparable though, as bitcoin’s market cap puts ravencoin (and most other cryptocurrencies) to shame. But again, bitcoin is the most well-known proof-of-work crypto with a halving that we can examine.
In the month leading up to the ravencoin halving, the price of RVN is up roughly 20%, and that’s despite BTC seeing a 13% drawdown during the same time period. The price of bitcoin has influence over all other crypto markets, so if bitcoin flips bullish, ravencoin could stand to benefit.
Network Engagement
Ravencoin’s halving appears to be coinciding with an uptick of activity and user engagement on the ravencoin network. This shows promise.
Ravencoin’s core value proposition is around the efficient use and transfer of assets on the network. There’s been an increase in activity around the creation and use of NFTs along with other platform and application-based development around ravencoin.
So, if scarcity leads to an increase in demand which leads to an increase in the price of RVN, then existing engagement on the ravencoin network should also increase and be incentivized to continue doing so moving forward.
There’s a potential incentive cycle that could help take ravencoin into the future. Ravencoin’s market cap heading into the halving is close to $1 billion and that will only increase if this incentive cycle unfolds.
Mining Significance
Proof-of-work makes ravencoin relatively unique in the current cryptocurrency markets. Bitcoin is the most well-known PoW crypto but there continues to be increased interest in proof-of-stake in the overall cryptocurrency ecosystem. That’s potentially good and bad, but it does make coins like bitcoin and ravencoin unique.
The fact that there is no intention to pivot away from mining in ravencoin is significant.
Cryptocurrency mining exists for a reason. It encourages global decentralization and participation in the network.
Despite the rise in interest around proof-of-stake coins, people continue to see the value in bitcoin, and there’s no reason to think that will change. It can be argued that crypto mining, especially in the case of ravencoin where ASIC hardware is discouraged, is a feature, not a bug.
The other piece to consider when it comes to mining is that an increase in price and mining profitability around RVN could encourage newer miners, like myself, to remain on the network.
As ethereum moves away from mining, ravencoin stands to benefit from those miners leaving ethereum and coming to ravencoin.
RVN Halving Cons
Now, let’s move to the potential negatives that could occur around the ravencoin halving, some of which are direct arguments against what I just proposed above.
Here’s the bear case.
Mining Difficulties
Ravencoin mining makes it unique but the halving event is also a major test for the network. Miners will receive half the RVN they did previously.
If the price of RVN doesn’t increase enough relative to the cost required to mine it, miners could leave the network and turn to other, more profitable cryptocurrencies.
This is a very real possibility. Ethereum mining will eventually still go away, making ravencoin and other coins a viable option, but just how much ravencoin is more likely to succeed over these other coins remains to be seen. The halving and its initial fallout could reveal what miners are thinking.
Bearish Speculation
A lot of miners and holders of RVN are speculating. I started mining ravencoin, in part, on spec. I saw an opportunity to mine a coin that wasn’t ETH that had a potential high upside.
If that upside doesn’t fully realize, the speculation could be all for not. That said, I’m in profit when it comes to mining RVN currently. But, other miners may not be or they may not speculate much beyond what they’ve currently have if the price doesn’t appreciate the way they’d like.
I have a real question to ask myself down the line even if I do or don’t stop mining ravencoin — do I continue to hold RVN? Everyone else is asking themselves the same question. Will a short term jump in price be an opportune time to realize profits or potentially convert to bitcoin? These are the considerations every miner and holder is working through.
The other main piece around speculation relates to bitcoin.
The world’s largest cryptocurrency is witnessing a drawdown in price right at the time of the ravencoin halving. If that continues, the drop in BTC price could outweigh potential positives around RVN and limit ravencoin’s short or long term upsides.
A final piece around price is whether or not the halving is already priced in. Traders have been aware of the halving so there’s an argument to be made that it’s priced in. Looking at what bitcoin has done historically though, even when a halving is priced in, newer entrants are not always fully aware of what that means and the crypto learning curve tends to allow for the effects of the halving on price to still take place.
Engagement Suffers
The potential negatives that could occur following the ravencoin halving are more or less all related. If one piece happens, then it could impact another. If the price and demand of RVN fail to sustain itself in the long term, engagement on the network could suffer.
The market cap could fall as the unit price falls and miners leave the network, and that would discourage other development in the space.
I came to ravencoin initially via spec mining. But, I’ve enjoyed seeing some of the same growth and engagement I saw in my early days in bitcoin. It’s encouraging to see, and I hope it continues, but, like nearly all things in crypto and in life, there are no guarantees.
Conclusion
I first got into bitcoin in 2014 and have seen plenty of ups and downs when it comes to cryptocurrency. I’ve seen projects rise and fall, prices fluctuate wildly, and I continue to challenge my personal strategy and approach to crypto as time goes on.
I wrote this in part to ground my own perspective in reality, to try to be objective, and to lay my thoughts down on paper so that I could personally challenge them.
The cryptocurrency space is dynamic and ever-changing. Ravencoin is a small part of it and the halving marks a historic occasion that could either help or hurt the four-year-old crypto.
What do you think will happen? Will RVN rise in price around the halving? Will it be short-lived, or will it sustain either way? And how will bitcoin’s recent activity impact the ravencoin halving?
Let me know in the comments or follow me on Twitter to chat more about bitcoin, ravencoin, and crypto mining.
*This is not financial advice.*
*I’m not an investment or financial advisor.*
I’m simply a ravencoin miner at the time of writing this and am interested in what could happen to the ravencoin network in relation to its first-ever halving event.
These are some of the topics I’m thinking through right now. I enjoy tracking what’s happening in crypto and love staying engaged with the space — it’s a great community.
Additional Resources
I’ve written other posts about ravencoin and crypto mining in the past. Here are a few you can read that provide more insight and some other helpful links to articles or others in the space.
- Why I’m Mining Ravencoin
- Can This Crypto 10x?
- I Built an ETH Mining Rig
- Ravencoin.org
- RavencoinInfo.org
- Tron Black on twitter
- Tron Black’s posts on medium
- Bitsbetrippin on twitter
Thanks again for reading my post and for being part of the cryptocurrency community! With 2022 just getting started, I’m excited about the year ahead.
If you want more crypto info, check out my predictions for 2022 and what to keep an eye out for in crypto.
Thanks for reading! I am not an investment or financial advisor. This is not financial advice. All opinions expressed are mine alone. If you want more content like this, sign up for my weekly email.
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