Crypto Market Commentary 

5 May 2019

Doc's Daily Commentary

Doc’s 4/30 Trade School on Risk Management is posted in the archive.

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This week’s seminar will be on Small Account Trading.

Checkmate's Coins


Checkmate’s Coins: Ravencoin Review


Ravencoin is a relatively new cryptocurrency project which is somewhat of a rare find in this industry. It has a founding story and core principles very similar to that of Bitcoin yet a rational and valuable use-case. Where Bitcoin is intended to be a decentralised protocol for money, Ravencoin intends to expand that to become a decentralised protocol for asset issuance (tokenization). What I really like about the Ravencoin protocol is how specific and focused the use case is and how it is intended to be a supplementary layer to Bitcoin, not a competing network.


Ravencoin is the refined asset issuance layer of Bitcoin following in the footsteps of Mastercoin, Omnilayer, RSK and Counterparty whilst in many ways improving on the tokenization characteristics of Ethereum. It does not use any smart contracts, instead having the tokenization functionality built into the core protocol layer.

Ravencoin’s fork story

The origin story of Raven is that it forked the Bitcoin code base, even going so far as to pay homage by launching the protocol on 3 Jan 2018, the 9th anniversary of the Bitcoin genesis block. The protocol makes some minor adjustments to the Bitcoin issuance schedule and hashing algorithm whilst adding in support for asset/token issuance which is challenging to achieve on the Bitcoin base layer. In order to embed assets on Bitcoin, the user needs to be aware of its existence within received coins otherwise they may be destroyed on the next spending transaction which is not a sound approach.


The reality is, Bitcoin’s base layer is not designed for asset issuance, it is focused on the sound money use case and that is all. By maintaining the Proof of Work mining and UTXO architecture, Ravencoin maintains the core security, censorship resistance and decentralisation of Bitcoin whilst adding in features to become an asset-aware blockchain. The protocol was launched without a founders reward, development fund nor with private or public funding. As such, Raven is almost certainly in the same category as Bitcoin with regards to securities law – a commodity or currency (depending on jurisdiction) and not an unregistered security. In contrast, the assets which can be issued on Raven are indeed securities which is akin to what we have seen with Ethereum where the SEC deems the core protocol is not a security yet tokens issued on top are.


If I was to pick one quote from the Whitepaper which really summed up Ravencoin for me, this was it:

“Only an open protocol will work in a global economy where there are multiple jurisdictions, each with complex and conflicting regulations.” The simplicity of Ravencoin as a UTXO chain is what makes it so powerful. Regulators do not need to know how to read code, they can just sum up transactions in a block explorer or spreadsheet in the event a spot check is needed and determine who owned what asset and when.

Figure 1: Overview of main Ravencoin modifications to the Bitcoin code base (

Ravencoin uses the x16R hashing algorithm which is an ASIC resistant method that randomly cycles through 16 different cryptographic proofs. ASICs are good for Bitcoin because its network value can support and sustain multiple industrial scale miners. However for smaller coins, ASICs pose a real threat to centralisation, particularly in the early days and now that ASIC manufacturers are in full operation. ASICs are not impossible to create for Raven but it is certainly much more difficult and expensive than other coins making it a GPU dominant mining coin for now.


Another exciting feature is that having the Bitcoin code base, Ravencoin can fairly easily be implemented into the Lightning Network or adopt features such as privacy or scalability which are built on Bitcoin in the future. Alternatively, Ravencoin may well get implemented as a layer atop Bitcoin to provide the asset issuance infrastructure layer. This is exciting stuff and shows the long term value of aligning with the #1 protocol.

Asset issuance

The Raven asset issuance system enables creation of tokens native to the protocol by any user of the Ravencoin platform straight from the wallet. This is a permission-less tool for token creation, ownership, issuance and transfer. Users can create tokens in three different formats:

  1. Unique – Assets which are guaranteed to be singular (e.g. ART:MonaLisa, GOLDBAR:id56552)
  2. Limited – Assets which a limited but non-fungible supply (e.g. equity shares, tickets, software licenses)
  3. Fungible – Assets which are fully fungible and indistinguishable (like bitcoins, derivative contracts)


A few examples of future applications for tokenisation on Raven are:

  • Physical goods and commodities
  • Security tokens
  • Partnership agreements
  • Crowdfund items with a resale value
  • Tickets, licenses or Ownership Deeds
  • In game currency or company internal items, credits reward points


In order to issue a token, 500 RVN must be burned (permanently I believe) and the user must set the parameters for how many tokens are created, what the decimal value is, and whether additional tokens can be created in the future. Tokens can have features built in such as dividend payments, pro-rata profit share, token holder communication channels for notifications, voting mechanisms and privacy features to maintain token holder confidentiality where needed. For an additional 100 RVN a sub-token can be set-up underneath the parent token with a similar set of parameters assigned and below that 5RVN will create a totally unique asset.

Figure 2: Snapshot from the Ravencoin wallet showing options and RVN fees for creating assets

Main Assets issued on Raven must have a unique identifier which cannot be duplicated and behave similar to a domain name where there can be categories of tokens sub-listed below the main ticker. An example may be a Main Asset representing the CHICAGOBULLS.


The Main Asset is CHICAGOBULLS

A season ticket Sub Asset may be CHICAGOBULLS:Season2019id659746

A ticket to a specific game may then be Unique Asset CHICAGOBULLS:Season2019id659746:Game1-SeatJ5


A quick scan of the Ravencoin asset explorer shows many folks have already taken ownership of likely token domain names which could be in demand for the future such as “BTC”, “Binance”, “APPLE” and “GOLD”. I would expect to see a marketplace develop for these token names if Ravencoin ever does reach a level of mass adoption. There is also a risk that people saturate the market with so many “speculative bets” that many tickers become unusable. Time will tell if using 100% unique and permanent token identifiers was a mistake or a great feature.

Comparing to Ethereum

Now this is interesting in contrast to Ethereum which was actually not created with intent of being an asset issuance platform in mind. Instead Ethereum was created as a much larger scale general platform for running smart contracts. The tokens issued during the ICO boom are actually not native to Ethereum and are instead based on the ERC-20, ERC-721 and ERC-223 standards. These standards are smart contract templates added to the Ethereum protocol which facilitated the tokenisation boom. As a result, token names do not need to be unique, only the contract address are unique which lead to one of the big scams where bad actors create false tokens with misleading names to dupe investors.


Ethereum is an account based blockchain with the ability to execute smart contract code. For a regulator, any discrepancies in token holdings would require both an audit of the Solidity smart contract to make sure there are no bugs or misfires of the code as well confirming the blockchain account records. What is generally discussed in the security token industry is that Ethereum is useful and can build in complex transaction types but was not designed specifically for asset issuance. In comparison, Ravencoins use-case specific UTXO model is literally a sum game where each asset is followed on its path from creation through to its final ownership location. However it is unclear how Ravencoin functions to check for whether a security can be held by the address in question under regulations, it may be that Raven still requires a centralised exchange like tZERO to manage the compliance side of the trade.

The link to tzero

The biggest question for Raven is what is the link between, tZERO and Ravencoin? It’s actually quite simple, the two lead founders of Raven, Bruce Fenton and Tron Black, work for Medici Ventures which is Overstocks blockchain investment arm. Now whilst Ravencoin is an open source community project, the linkage here is clear and it is extremely likely that Raven has a strong use case in the backbone of the tZERO security token infrastructure. Further to this, Patrick Byrne the CEO of Overstock is known to have invested in 60 Million RVN at a price of $0.03.


Now it is mentioned in many of Raven’s medium posts that it is a fully decentralised project and the PoW mining and ASIC resistance side of the coin certainly speaks to that. In theory, the open source github is open to anyone to contribute or fork. However, as with almost all projects with the exception of Bitcoin, there remains a central group of developers with a core interest in the protocol for commercial applications.


What remains to be seen is how Ravencoin and Florincoin are utilised in the back end of tZERO. Thankfully, both are public blockchains and you can be assured that the many smart folks out there will be watching for signs of activity to understand exactly what is going on behind the scenes.

Last thoughts

Overall, Ravencoin has a lot going for it. As far as hype, this coin has a lot going for it.

Bitcoin clone, about as pure as they come with ability to benefit from Bitcoin in both directions

Relatively strong decentralisation and ASIC resistance having the sixth most secure hashrate of all crypto networks (very impressive considering it is just over 1yr old and ASIC resistant)

Fair initial and ongoing coin distribution by mining only means very low risk of being classed an unregistered security

Fixed and deflationary supply makes it a valid iteration of decentralised money

A viable contender for of the digital tokenized future and part of the security token hype

Active funding a development from multiple large players in the industry

Tokens are native to the blockchain an issuable from a wallet which is a significant improvement to Ethereum and actually disrupts token creation companies like Securitize, Tokeny and PrefLogic in terms of ease of asset creation and cost….


…However, there are a few risks to be considered:

It is unclear how or if Raven handles compliance. This is where token issuance companies have the upper hand because these deals are still driven by humans not machines.

There is a risk of many token identifiers being bricked by speculators due to the extremely low barrier to entry for asset creation.

There are a lot of assets out there to be tokenized, I’m not sure that a fixed supply with permanent burns of RVN will satisfy demand (but it will appreciate price). I would actually hope that RVN burned go to miners to encourage continued security and coin flow through the economy. A useable system is more important than RVN price appreciation, at least in the long term.


As far as trade signals go, look no further than the global hash rate. Based on my crude analysis below, it seems reasonable to watch for uptrends or downtrends in the global hashrate. This would indicate security of the Raven network is improving or losing steam and seems to drive the price with a high correlation factor. This tells me that as more and more miners commit hardware and energy to this network, it is likely to continue to appreciate in value. The converse is also likely true.

Figure 3 – Correlation of RVN price to hashrate – this is an extremely strong correlation (

Figure 4: Ravencoin comparison of security in comparison to 6 Bitcoin confirmations. Currently the sixth most secure coin according to

Ravencoin Transaction Explorer

Ravencoin Asset Explorer

Ravencoin Network Statistics

Ravencoin Presentation

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We intend on this portfolio being balanced between the Three Pillars of the Token Economy & Interchain:

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RSC Managed Portfolio (V2)


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RSC Managed Portfolio (V1)