What is Dynamic?
Dynamic is a decentralized and open source proof-of-stake coin created to ensure that every person in the society can easily access and use the digital coins. After launching Bitcoin, Satoshi Nakamoto opened the doors to faster adoption of cryptos in different niches. However, the price of cryptos has been swinging to the extremes because they are not regulated.
The Dynamic coin was created by Suzuki Nakamura who built on the existing technology from major coins such as Bitcoin and Ethereum. The coin uses 2XSHA-256 proof-of-work algorithm and has an unlimited number of coins. It is the first coin with no halving and no diminishing rewards.
- The Dynamic coin price history
When Dynamic crypto entered the market in October 2016, its value was $0.16. The value dropped by about 1100% to $0.08 by the close of October before springing back to $0.19 in early November 2016.
By the close of January 2018, the value of Dynamic had dropped to $0.027 before shooting up to $0.25 in mid-February and falling to $0.035 by the close of the month. Again, the value took an upward trend hitting a high of $0.4 on March 23rd, 2018 and continued on an upward trend to reach $0.9 on May 12th, 2018.
The price remained at $0.99 between May and October 15th when it rose to $1 and immediately crashed to $0.0029. This was a major drop of about 34,000%. Note that the drop did not end there. By mid-November 2018, the value had gone down to reach a low of $0.000064.
As a coin that is dedicated to addressing volatility, the price changes demonstrated above has made the community wonder whether the strategy is indeed workable. It will be interesting to see how the price behaves in the coming years.
What is the problem that Dynamic solves?
When the high number of coins entering the market is mentioned, there is a tendency to think that everything is well. But that is wrong. A closer look reflects that the niche is reeling from serious bottlenecks that are limiting its growth. Here are some of the issues that Dynamic solves.
- High volatility
The problem of high volatility has become a major challenge for most cryptocurrencies in the market today. If you take a look at the performance of the fiat currencies, their stability is maintained through a system of printing and buying currencies from the market. This helps to keep the price stable and reliable. But there is no control when it comes to cryptocurrencies.
The coins are controlled by the forces of the market only. This is the reason why an announcement about a partnership between a crypto and a highly rated company is likely to send the value up. Other factors that affect the value of the coins include regulations, new technology, and competition.
Dynamic targets to make its native coins stable and ensure that more people can use it without worrying that the coins will lose value.
- Poor miner motivation
Mining is the process of solving complex mathematical puzzles in cryptocurrency networks and adding new blocks to their public ledgers for a reward. But miners also help to secure the network, confirm transactions, and vote on management decisions. To ensure that miners support the network, they need motivation. In many pioneer networks, such as Litecoin and Bitcoin, the mining rewards halve every four years.
As the rewards halves, the miners are likely to lose interest because they do a lot of work while the reward keeps declining. Some of them are likely to shift to other coins while others could conspire to harm the networks. The Dynamic system removed the halving principle so that rewards are controlled by the market forces only.
- Poor scalability
The architecture of blockchain platforms is anchored on effective implementation of consensus. This means that for new blocks to be added to the public ledger, many nodes have to come to an agreement. This results in very low transaction outputs for every second.
If you take the case of Bitcoin, the largest network in the niche, its system can only manage 7 transactions per second. Even other top leaders in the niche such as Ethereum can only handle 20 transactions/ second while Bitcoin Cash can manage 60 transactions every second. Now, compare the transactions with industry leaders such as Visa that can handle in excess of 20,000 transactions every second.
This demonstration indicates that the cryptocurrencies are way below the expectations of the society. The community is looking forward as the technology unfolds to see whether the crypto networks will manage to address the difference.
How does Dynamic solve the problem?
Suzuki Nakamura, the Dynamic founder, opted for a multi-approach strategy to address the above issues. Here are the strategies used in the Dybamic platform.
- The 15 seconds block time
In the Dynamic’s white paper, Suzuki explains that the 15 second block time was adopted to help allow blazing fast transactions. The fast block time is coupled with an unlimited block size to ensure that the system can handle more transactions without worrying of high volume seasons.
If the strategy works well, the Dynamic scalability could be the best in the globe. For example, the block size of Bitcoin is only 1MB and it can only be mined every ten minutes. For Ethereum, the largest block size was 33416 bytes that was recorded in January 5th, 2018. Even with the impressive block time of 20 seconds, Ethereum still lags behind because it only supports up to 20 transactions/ minute.
The Dynamic model was created after realizing that the block size is a major limiting factor that could ultimately threaten the entire industry. However, the Dynamic system is yet to test the effectiveness of the unlimited block size because the volume of users is yet to reach that of top networks such as Ethereum.
- Unlimited coin production
The idea of limited coin production in crypto networks is meant to help maintain the value of their native coins high. For example, only 21 million Bitcoins will ever exist in its network. For Dynamic, the target is to make its native coin operate as close as possible to the fiat currency. The founder wanted to ensure that the value remains stable by progressively releasing new coins when the price goes up so help stabilize it.
The release of new DMC coins is dependent on the price in the market. The Dynamic system analyzes the market and can release 1DMC or as many as 1,000,000 per block. When the price goes down, the reward is reduced. The Dynamic development team expects to control the price of the coin so that users do not suffer from extreme price swings.
- The Global Reserve System
This is a non-profit organization that is used to support the Dynamic platform by ensuring that the price remains as stable as possible. The reserve has a large volume of DMC and BTC that are capable of buying and selling huge quantities of DMC to stabilize the price.
- Decentralization
Suzuki indicates that the bottom-line to the success of the Dynamic system is decentralization. He further points out that the network uses proof of stake model that ensures users with some stake in the system can mine the network and help with its governance.
Even with this argument, the community is concerned that the major decisions are largely made by the Global Reserve System. For example, when the price of DMC falls or increases the Global Reserve System swings into action and releases new coins into the market.
The Dynamic white paper does not demonstrate clearly how the stakers in the platform help with price management, transactions or even governance.
What makes Dynamic better than it’s competitors?
Dynamic was introduced into the market when the competition was approaching the peak. Here are the main things that make Dynamic better than competitors:
- The Dynamic system allows users to stake or invest without worrying about price volatility.
- The Dynamic system allows users to join and own the platform. Unlike the conventional banking systems that make users feel passive, the dynamic platform employs proof of stake protocol that allows stakers to participate in decision making through consensus.
- It is a reliable method to invest and send value without worrying about third-party seizures. By employing advanced encryption, the Dynamic system allows users to operate in total anonymity without worrying of getting discovered by unauthorized users.
- The system operates as a completely decentralized network of sending value. This means that transactions are confirmed by nodes spread in its system as opposed to centralized systems that come with a high risk of failure or attacks.
- Since transactions are completed on a peer2peer basis, they are cheaper and faster because the profit-seeking organizations are bypassed. This makes the platform more convenient for sending value both locally and internationally.
NOTE: While the commitment of the Dynamic cryptocurrency and platform are impressive, the effectiveness of the model to address volatility is wanting. In the Dynamic white paper, the founder and development team indicates that more coins will be released into the market to control the price.
However, the impact is likely to see a lot of coins getting into the market and crashing the value of the coin. This is what happened on October 17th, 2016. The development team released large quantities of Dynamic coins into the market with the intention of controlling the price. However, the impact was a sudden crash and progressive deterioration of the price to $0.000063 by mid-November 2018.
The model that the founder wanted to use to control the value of Dynamic has become the primary driver of high volatility. This approach has made investors take a wait-and-see approach because the coin could result in major losses.
How can Dynamic’s be categorized?
Dynamic is a highly ambitious crypto project that targets to address the pressing issue of high volatility. The founder and his development team wanted to create a platform that closely resembles the fiat currency system so that more people can easily join and enjoy blockchain related benefits.
What is Dynamic’s vision on security?
When the Dynamic coins entered the market, the crypto community was still coming to terms with the DAO Child attack that rocked Ethereum in mid 2016 and caused a major division. To prevent similar or more serious attacks on the Dynamic system, the founder came up with the vision of making the network the most secure in the industry. Here are some of the methods used to keep the system secure:
- Advanced encryption that helps to keep the user info private.
- The network uses proof of stake protocol that helps to promote even distribution of coins to reduce the danger of 51% attack.
- The development team works on regular updates that help to seal all gaps that can be used by attackers.
Examples of Dynamic use cases/ applications
To know the value of a cryptocurrency and crypto network, one of the best methods is following the applications in the society. In the case of Dynamic, the following are the main use cases:
- You can use the Dynamic coins to pay for goods and services in stores that support it.
- The native DMC coins can be traded in the crypto exchanges. Note that you will be required to join an exchange that lists the Dynamic coin, create a crypto pair, before executing a trade.
- If you want to send money to another country, one of the reliable methods is using a cryptocurrency such as DMC. Note that the recipient will need to have a wallet that supports Dynamic coins.
- As a proof of stake cryptocurrency, you can mine the network to get rewarded with native coins.
- The Dynamic coins can be used to pay taxes in countries that support crypto coins.
- Like other coins in the market, the Dynamic platform can be used as a method of saving funds. You will only need to buy the coins and sell them when in need cash.
However, it is important to note the negative price movement despite the described system for maintaining stability. If you need to invest in the coin, it is advisable to compare Dynamic with other emerging tokens and only commit a small amount.
http://dynamiccoin.org/DMC%20White%20Paper.pdf
https://coincheckup.com/coins/dynamic/predictions