This Crypto Soared Before the Ethereum Merger, It’s Not Ethereum Classic

This Crypto Soared Before the Ethereum Merger, It’s Not Ethereum Classic

called cryptocurrency Ravenquin (RVN -18.11%) rise in heels Ethereum‘s (ETH -7.92%) The merger, and its gains even outweigh the benefits of the beneficiary of the often cited merger Ethereum Classic (etc -9.18%). This smaller proof-of-work crypto is up over 90% over the past month. What is Ravencoin, and can it continue to rise?

Cryptocurrency Raven Ravencoin

Image source: Getty Images.

What is ravenquine?

Ravencoin is a Proof of Work cryptocurrency that ranks among the 60 cryptocurrencies by market capitalization. After its big month, Ravencoin is now up and running with a market price of $750 million. While Ravencoin has been hot lately, it is by no means a newcomer to the crypto world. Ravencoin started as a Bitcoin (BTC -1.79%) fork in 2018 and is similar to Bitcoin in that it has a maximum total supply of Ravencoin. There is a maximum supply of 21 billion Ravencoin against a maximum supply of Bitcoin of 21 million. Ravencoin differs from Bitcoin in that it offers smart contracts and allows owners to create their own tokens by burning 500 Ravencoins.

raven journey

Many readers will likely be familiar with the event of the Ethereum merger, which took place this week. In summary, The Merge is shifting the Ethereum consensus mechanism from Proof of Work to Proof of Stake. In simple terms, think of the merge as a software update. The main change will be in the way Ethereum reaches consensus. Until now, Ethereum miners used energy to solve complex mathematical equations to process transactions. After the merger, these mining rigs will no longer be used, and Ethereum transactions will be processed via a staking, where Ethereum holders can commit or “share” a portion of their Ethereum holdings in order to validate transactions and secure the network to earn a share of the transfer fee.

This move will bring tangible benefits to many members of the Ethereum community, who can share their holdings to earn income. But there is one group of network participants that clearly won’t benefit from this shift – Ethereum miners. Miners use expensive computer equipment to mine Ethereum, and this quest is now unnecessary, because after the merger, they can no longer use their hardware to obtain Ethereum. Moreover, the devices they own are about to become less valuable, as they have few other uses.

Miners may be down, but they’re not out, and that’s where Ravencoin comes in. Ethereum mining hardware cannot be used for bitcoin mining, but it can be used to mine other Proof of Work cryptocurrencies such as Ethereum Classic and Ravencoin. Ethereum Classic grabbed most of the headlines as a beneficiary of Merge as it is a tough fork of Ethereum and is already the top 20 cryptocurrency by market cap, but Ravencoin has been waiting in the wings as well. Ethereum mining rigs that use graphics processing units (GPUs) can be used to mine Ravencoin, giving this equipment a new lease term. Ravencoin hash rate is on the rise, indicating that miners have migrated from Ethereum to Ravencoin.

In addition, FTX, one of the largest cryptocurrency exchanges in the world, recently said that it is adding permanent futures contracts to Ravencoin. These types of listings on major exchanges can be important catalysts for smaller cryptocurrencies because they can increase liquidity, trading volume, and interest in the asset.

There is more to Ravencoin than Merge

Ravencoin looks like one winner from Ethereum’s move to proof of stake. However, Ravencoin has more than just a proof-of-work crypto in the right place at the right time due to its compatibility with GPU mining hardware. Ravencoin has a strong community, an egalitarian approach, and some interesting use cases.

Ravencoin’s mining algorithm is ASIC-resistant (Application-Specific Integrated Circuit), which means that ASIC miners cannot control the mining process and earn more rewards than ordinary users who use affordable and accessible GPU mining equipment. You can even mine Ravencoin using a PC without a GPU, although it won’t be as efficient. This also adds to Ravencoin’s decentralization and security.

Ravencoin’s focus on allowing users to create their own tokens is also interesting. For example, you can tokenize real estate with Ravencoin by splitting an investment property into 100 tokens, or even 1,000. The tokenization has many advantages for its holders. Real estate is usually a relatively illiquid asset, and you will have to sell your property to make a profit from it. This can be a long and stressful process. With real estate tokens, users have around-the-clock liquidity and can theoretically sell their share of property to anyone in the world in a matter of seconds. Also, converting a property to a token makes it much easier for ordinary investors, who may not have the money to buy an investment property but can buy a token or multiple tokens to diversify their real estate holdings.

Ravencoin should continue to benefit from the exodus of Ethereum miners in the short term. In the long run, there is a lot to like about the project other than just this catalyst, particularly its democratic approach to mining and the possibility of using tokens. Cryptocurrencies, especially smaller ones, can be risky and volatile investments, but Ravencoin looks like a buy with great potential for risk-taking crypto investors who want to make it a small part of their investment portfolio.

Michael Burn He has positions in Bitcoin and Ethereum. Motley Fool has and recommends positions in Bitcoin and Ethereum. Motley Fool has a disclosure policy.

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