By: Tyler Loar
As cryptocurrency is reaching the mainstream, a lot of people are starting to have questions about this complex and multifaceted topic. As someone in the business since 2017, I’m here to help you sort out some of the complexities and some of the issues surrounding it.
What is Cryptomining?
Cryptocurrencies such as Bitcoin and Ethereum have been around for years, while more modern and progressive currencies such as Ravencoin are trying to offer a more environmentally-friendly option since mining Bitcoin and Ethereum uses so much energy. Cryptocurrency is mined by assigning a GPU (or Graphics Processing Unit) to complete a complex math problem before any other computer can. As the owner, you are then rewarded with one “block” of cryptocurrency, the value of which changes over time. Then, the computer is assigned a new math problem, and so on, which is called a “blockchain.” The unit used to quantify the efficiency in which these problems are solved is called a “hash.” Cryptocurrency mining has two forms, ASICs and GPUs, and in this article, we will be covering solely GPUs, which are the key components of a computer. Want to play video games? Well, you’ll need a GPU. The amount of functions that GPUs have is so immense that I could spend hours explaining it. However, to save you time, all you need to know is that without a GPU, your computer could not show or process color.
Now that you understand or can see what a GPU is, how does hash come into the equation? Well, if hash is measured in how many complex math equations a GPU can do, the more math equations a GPU does, the more units of hash it has. Thus, it stands to reason that cryptocurrency is paid out to miners depending on how much hash they have. People with more hash make more money since their GPUs are solving more equations. In simple terms, the more powerful a GPU is, the more money it makes. So when you hear the term “miners” or “cryptominers,” this likely refers to someone with tens, if not hundreds, of these GPUs. Additionally, the link below is a great spreadsheet if you’re interested in seeing more specifics about the hash per $ breakdown, but as of this article being written, 1GH/s (1 gigahash aka 1000 megahash) makes around 50 US dollars a day. To put this in perspective, this is equivalent to around 40 mid-range GPUs. ⛏ The Best GPUs for Mining | Kryptex
What is Ravencoin?
So what exactly is Ravencoin? Ravencoin, otherwise known as RVN, is decentralized crypto, which means that no single person nor organization runs it. Furthermore, its main purpose is to transfer digital assets between users for microscopic fees. Currently, Ravencoin’s price is sitting around 0.10 USD, which if you think about it, is extremely small. However, there’s a main benefit and appeal for it being this low: the fact that fees are basically nonexistent. For example, I could send $10,000 from here to China with an average fee being about 3-5% through my bank. This means that in order to send $10,000, I’d have to pay an additional $300-500 on top of that. However, with Ravencoin, no matter how much money you transfer, the fee will always be 0.2 RVN. This means that if I were to transfer $10,000 using Ravencoin, it would only cost 0.02 USD. This has prompted Ravencoin to be used as the main asset for safe, quick, and cheap transactions across the world. Now, on the other hand, Ravencoin is not widely adopted like well-known cryptos such as Bitcoin or Ethereum (which I’ll cover in future articles). It only has a market cap of around 1 billion dollars, which may seem big, but in the crypto world, this is quite small. So the counterargument is that it will never live up to its full potential since other people would rather use alternatives.
Mining and Tokenomics with Ravencoin:
Now, why am I specifically talking about Ravencoin over other, more important crypto? Well, Ravencoin, just like Etherum or Bitcoin, is not simply created out of thin air. In order to acquire Ravencoin without purchasing it from brokers (think of brokers as banks for the crypto world), you must mine it using the GPUs I mentioned earlier. When Ravencoin was first created, the developers put a plan together in order to make it a commodity like silver or gold. Only 21 billion Ravencoins can ever be mined. This was put in place to make Ravencoin more stable and rare as time goes on. Additionally, every four years, Ravencoin would have a “halving,” which would hinder mining by 50%. To put this in perspective, if you were accumulating 50 Ravencoins a day by mining before the halving, afterward, this would shrink to 25 a day. January 12th, 2022 is the most recent halving date, cutting Ravencoin’s production in half. This is put into place so that it will take decades for the number 21 billion to be reached, while also making Ravencoin rarer as time goes on. Now the key thing to remember is that if Ravencoin sits at its current price after the halving, miners take a huge income hit. I won’t go into specifics here about profits rising and falling within the cryptomining world, but the main thing to consider and grasp is the environmental impact this will have. Currently, around 8 terahash (TH/s) is being mined per day when it comes to Ravencoin. To put this in perspective, that’s 8000 gigahash (GH/s) or 8,000,000 megahash (MH/s). (Buckle up because this might get a little confusing.) Now Raven Coin uses the algorithm ProgPow, all you need to know about this algorithm is that it is more environmentally friendly since its main appeal is for older GPUs. Newer GPUs use up much more energy as they are more powerful. However, the drawback of this is that they harm the environment more. Therefore, if Ravencoin’s price does not increase in a way that satisfies miners when it comes to profits, many will move away from Ravencoin and mine coins that are less environmentally friendly.
If you own a PC or console, you may know that computer chips, most notably GPUs, are incredibly scarce right now. Some GPUs are even being resold at double their original worth. This not only creates a hostile environment in crypto communities but in all facets of computer tech. Furthermore, if there is a higher demand for and usage of GPUs, energy usage skyrockets, and more products get produced. As someone who has been in the cryptomining sector since 2017, I like to see both sides of the argument when it comes to crypto. I do believe that blockchain technology, which is what powers crypto, has a bright future if it can maintain more environmentally-friendly methods. However, at the same time, I understand the push for regulations before things get out of hand. I believe that a common middle ground can be found where miners like me switch to more environmentally-friendly coins like Ravencoin while also maintaining rewards for powering blockchains with their GPUs. However, until that moment is reached, we need to raise awareness for the crypto scene, and the potentially detrimental environmental effects it can bring. Be on the lookout for what happens in the next few months when it comes to cryptocurrency, and know that the situation is currently developing rapidly. Don’t worry, I’ll be back next issue to update you.