How will Ravencoin be impacted by EIP-3554? What is EIP-3554? The “Good” and “Bad”

This is to inform any Ravencoin newcomers about what the London Hard Fork for Ethereum (specially EIP-3554 means for Ravencoin mining and the mining landscape in general, whether or not you’ve been mining for years or just started yesterday.

The London Hard Fork for ETH, which occurred on block 12965000, implemented 3 proposals into ETH, with the 2 most notable being EIP-1559 and EIP-3554. Most of you are probably aware of 1559, as it has already taken effect. Some gas fees are being burned as transactions are made with ETH.

Burned means it is gone forever.

Normally these excess gas fees would be going to ETH miners. Since they are just disappearing, ETH mining profitability has gone down slightly, but it’s still competitive and usually #1 in profitability depending on your mining rig (which it isn’t for me due to RVN price increase)

EIP-3554 is set to take effect in the first week of December 2021. This part of the hard fork has set up a “difficulty bomb” for ETH mining difficulty. When this proposal hits the network, mining difficulty will start artificially increasing exponentially for ETH. Unless ETH price also increases exponentially, profitability will decrease slowly at first but more rapidly over time (I’m unsure of the exact time length this will take).

This is happening before ETH 2.0 is implemented to encourage miners to begin staking their ETH and prepare for the switch to 2.0.

What does this mean for Ravencoin?

EIP-3554 guarantees that ETH miners are going to be migrating BEFORE ETH 2.0 becomes a thing. Not all hashrate is guaranteed to go to Ravencoin, and the same goes for any other coin that is Proof of Work. But if history repeats itself (basically the past week since EIP-1559), RVN has a solid chance at another major price appreciation.

For Ravencoin holders and miners if you don’t sell the coins you mine, this is the Good.

The “Bad” is that with increased hashrate comes increased network difficulty to mine a block of Ravencoin. More miners are mining and block rewards are spread more thinly given a majority of miners are pool mining.

We hope the Good offsets the Bad with the price appreciation of RVN to keep mining profitable and benefit holders at the same time.

If you are unsure how Ravencoin mining difficulty works, give the very bottom of this webpage a good read as it explains a lot: https://www.coinwarz.com/mining/ravencoin/difficulty-chart

“But increased miners means more Ravencoin is being mined and the supply will skyrocket, bad for price”

We get this comment a lot in this subreddit. Luckily it’s not the reality of the situation.

People have a false sense that more miners = more supply of Ravencoin, which is true that it would not be good. BUT because Ravencoin’s mining difficulty adjusts EXTREMELY OFTEN (it might be every block), the supply will never inflate like that.

If anything, and this is an extreme example, one block time may be 50 seconds instead of 1 minute and then the next block will go back to being approximately 1 minute because of the mining difficulty adjustment. So only 1-2 blocks are impacted by mere seconds before everything goes back to normal, even if network hashrate were to double in an instant.

More miners = more scarcity for everyone = Higher value (at least we hope that’s how it works. It makes sense economically and that’s what has worked for bitcoin in addition to bitcoin adoption)