Dimecoin project purpose and description
What is Dimecoin?
Dimecoin is an open source, peer2peer electronic cash system and a crypto coin created to help advance the cashless economy. The coin was created in 2013 by an anonymous team that wanted to enhance the security of users and their coins.
The Dimecoin development team was concerned that though the cryptocurrencies were increasing rather fast, the adoption and use at the community level was still very poor. In their whitepaper, the Dimecoin points that they target a situation where every adult, child, and business will be able to use DIME to enjoy the benefits that come with blockchain technology.
- A closer look at the Dimecoin price performance
Though Dimecoin work started in 2013, DIME trading in the market can only be traced back to early 2014. On 6th January 2014, the value of DIME was $0.000002. Then, it fell to $0.000001 in March 2014 and continued on the downward trend to hit a low of $ 1.25e-7 by October 2015.
The poor performance continued throughout 2016 and early 2017. In February 2017, the price rose marginally to hit $0.000002. By December 18th, 2017, the value had risen to reach $0.000036 before climbing further to $0.00027 in January 2013. This was a huge leap of about $13,400% from the starting price.
However, the good show did not last. Immediately after hitting the highest mark in its history early January, the value took a bearish turn and continued dropping for the better part of 2018. By early December 2018, the value of DIME had sunk to $0.000005.
Though the development team led by the Ryan Downey is optimistic that the coin will finally become the best in the market, the poor show in 2018 calls for extra caution when investing in it.
What is the problem that Dimecoin solves?
When Dimecoin was created in 2013, the development team wanted to change the face of cryptocurrencies. It is important to point that in the previous three years, the crypto niche had attracted the interest of hackers resulting in major losses such as the 600,000 BTC from Mt. Gox. The following are the main problems that Dimecoin solves.
- Poor adoption of Dimecoin by the community
When Dimecoin was released in 2013, the crypto space had become very attractive to cryptographers and financial experts. While many coins such as Litecoin, Novacoin, and Devcoin had hit the market by 2013, the adoption at the community level was still very poor.
For example, if you had Litecoin tokens in 2013, finding a trader who could accept it would be very difficult. Dimecoin wanted to be a coin that every party including businesses could easily adopt.
- The complexity of the SHA-256 algorithm
In the initial years of blockchain application, most coins employed the SHA-256 consensus algorithm. This is a secure hash algorithm created with Merkel-Damgard structure and the Davies-Meyer structure. Though it is considered very secure, it comes with some major limitations that Dimecoin targeted to address.
The SHA-256 makes the systems very slow. For example, Bitcoin can only handle less than 10 transactions every second. The slow speed makes networks using SHA-256 an easy target for attackers. The development team was concerned that SHA-256 networks were likely to become exposed to transferable state attacks. Therefore, they held that it was time to try a different hashing algorithm.
- Centralization of mining
Most coins launched a couple of years after Bitcoin’s release used proof of work (POW) protocol. The protocol requires miners to generate high computing power to solve complex puzzles in order to confirm transactions. The main issue with the protocol is that the mining difficulty grew so much making it uneconomical to mine using standard CPUs and GPUs.
To address the problem, the industry started generating advanced mining equipment referred to as Application specific integrated circuits (ASICs). These are advanced equipment that generates high hashing power to make mining easy and fast. While this sounds impressive, it has a serious downside of cost.
The ASICs are very expensive such that only the rich in the society can afford. This raises the risk of only a few wealthy parties taking control of mining, and owning the majority of coins. It also raises the threat of 51% attack.
- The high cost of sending value
Though many coins were making inroads into the community by 2013 when Dimecoin was launched, a lot of people still clung to the conventional financial services. The main issue with traditional financial services such as banks and credit card companies is that they are very expensive.
Because financial organizations such as banks are profit based, they explore every possible method that can be used to help optimize returns. Therefore, they raise the transaction charges to meet the targeted profit margin and costs of operations.
How does Dimecoin solve the problem?
When the Dimecoin’s development team set out to address the above issues, they appreciated that only multi-dimensional approach would deliver results. Here are some of the methods they used to address the problems.
- The application of quark hash function
Quark is a cryptographic hash function that was designed by Jean-Philippe, Willi Meier, Luca Henzen, and Maria Naya-Plasencia. The hash function was created as a light-weight cryptographic option to operate with minimal memory requirements.
Though SHA-256’s security is not in question, Quark improves on it by ensuring it is resistant to ASICs. This means that more miners can participate with their standard devices such as CPUs and GPUs.
By making it easier for more people to mine the coin, Dimecoin solved the problem of the token penetration into the community. For example, you do not have to purchase the coins from the exchanges in order to own and use them. Your standard CPU can be used to mine them.
- Complete centralization
To address the problem of high cost of sending value and poor adoption in the community, the Dimecoin team ensured that the network is fully decentralized. The network operates as a network of nodes spread across the globe.
When users join the platform, they become part of its system. For example, when a user who wants to send value initiates a transaction, it is picked by miners. Then, they follow the sender’s public address to ensure that he/she has ample coins and there is no sign of double spending.
When every detail is confirmed, the transaction is added to the next block before getting enjoined to the public ledger. The whole process implies that sending value using Dimecoin is direct and cheaper because no profit based organization is involved.
What makes Dimecoin better than it’s competitors?
When Dimecoin entered the market, it was faced by a monumental task of winning significant market share in a highly competitive niche. Other more established coins of the time such as Litecoin and Bitcoin had already established themselves. But this was not all.
Dimecoin also had to compete with other conventional financial services. Today, the crypto market has become even more competitive and Dimecoin has to face newer technologies being introduced in the niche. Here are some of the things that make Dimecoin better than competitors.
- The coin uses a more advanced proof of work hashing model. Instead of adopting the common SHA-256 hashing model, Dimecoin uses the Quark hashing model that is considered more secure and effective.
- Dimecoin provides users with a cheaper and faster method of sending value across the globe. As a completely decentralized network, it implies that Dimecoin allows users to send value directly without relying on centralized operators. This means that transactions are completed instantly and at lower rates. Instead of using wire transfers that can take up to four days, Dimecoin ensures that your funds are sent in less than a minute.
- The design of Dimecoin provided improvements to the major coins that existed in 2013. This makes it very impressive even today. Some of these improvements include; 30 seconds block time and mining difficulty adjustment after every 20 blocks. This is better than Bitcoin that has block generation after every 10 minutes and mining difficulty after 2016 blocks.
- The Dimecoin allows users to send value and invest anonymously. If you send funds through the conventional banking system, there is a risk that a lot of people will know about it. For example, the cashiers and bank management can easily access your details.
To enhance the privacy of users, Dimecoin uses advanced cryptography. From user account details to their operational transaction history, all the details are out of reach. Even the miners who follow the transactions and confirm them can only check the balance on public addresses.
You can, therefore, send value or invest on the network without worrying of getting discovered by third parties. Nobody can know about your details. Even a court of law cannot order for production of your financial reports from Dimecoin because it lacks jurisdiction.
- The Dimecoin network allows people to use and own the network. If you use a credit card to send value, there is little association with the company. The only association is that the credit company is allowing you to make payment or send value for a fee. However, Dimecoin is different.
The development team wanted to ensure that users also own the network. When you send value on Dimecoin system, you also become part of the owner. You could even become a node and participate in confirming transactions. When major decisions about the network are being made, you will be called to vote.
How can Dimecoin be categorized?
Dimecoin can be categorized as a completely decentralized network. This means that the network does not have a single point of failure. By relying on nodes spread on the system, you can easily send Dimecoin and use them for daily purchases.
What is Dimecoin’s vision on security?
The Dimecoin’s vision on security is to provide crypto enthusiasts with a secure and reliable platform for their operations. Here are some of the methods that Dimecoin uses to guarantee users of optimal security.
- Complete decentralization: By operating as a completely decentralized system, Dimecoin ensures that there is no single point of failure. Your data is stored by different nodes so that there is no risk of getting lost.
- Quark hashing algorithm. This hashing model is a departure from the standard SHA-256. In addition to being lighter, it is more secure because it facilitates better spread of native coins in the network.
- An aggressive development team: The Dimecoin’s development progressively reviews the network to identify security gaps and closing them on time.
Examples of Dimecoin’s use cases/ applications
One of the main reasons why Dimecoin development team moved out of their way to create a new platform was to facilitate faster adoption and use of DIME in the society. The team targeted to ensure that the coin had as many applications as possible. Here are some of these use cases.
- You can use the Dimecoin native coins for direct purchases from stores that accept them. Note that even if only a different coin is accepted in your preferred store, it is still possible to buy by converting Dimecoin using the crypto exchanges.
- Dimecoin crypto network can be used for saving funds. You only need to buy the native coins and store them in your wallet. Note that if the coins value goes up, the value of the investment will also improve.
- Like other coins such as Bitcoin, Dimecoin can also be used to send value on a peer2peer basis. The good thing with Dimecoin is that it is cheaper and faster because there are no third parties involved in the process.
- The Dimecoin coins can be traded in the crypto markets. These are exchanges that bring together buyers and sellers so that the prices of native coins are driven by demand and supply.
- Dimecoin can be used to pay for government services in jurisdictions that support crypto coins. One example is Arizona. After the passing of bill HB 1091, residents of Arizona can now pay for taxes using cryptocurrencies. The tax department is required to convert the coins to USD and deposit them to the payer’s account.