Is specialisation a way forward?
Bitcoin’s dominance which emerged from many different, even accidental, network effects such as first movers advantage or name of the protocol being confused with the currency, makes it a hard competitor for alternative cryptocurrency systems to beat. There might be a room for two in this race, however in the long run none of these two for certain will be bitcoin.
Nonetheless, in the meantime some projects abandoned the idea of racing in unwinnable race and focused on exploring other possibilities, slowly becoming Samurais of their own kind. The choice is in abundance, there is plethora of different options offered by various project ranging from micro transactions to remittance services and anonymous money transfers.
However, there is nothing that comes close to the niche product Diamond [DMD] which follows its own specific path bringing to the market a very neat and focused product. In crypto riddled with pervasive quick-buck mentality, Diamond comes as something much more refined and philosophically different to its competitors.
Philosophy to date regarding Diamond was to create a stable and secure deposit coin, where people acquiring it could treat it as a deposit bank account with easy possibility of multiplying their wealth. The focus was not that much on becoming a micro payment coin with wide merchant adoption, because at the end any successful cryptocurrency is expected to be useable wherever bitcoin is accepted, but rather creating long term stability through sensible management and ever expanding network of supporting services. Even though that at first glance it might appear to be just another money transmission and storage system - just like the other 500+ coins on the market. Diamond pushes boundaries and turns inherit speculation nature of currencies into the benefit for its users.
Standing out from the crowd is not the only problem that many cryptocurrency projects try to solve. Take for example inflation control, price volatility, security and sustainability.
Yet again when looking at Diamond, its sensible approach to these challenges has yielded visible benefits.
Diamond achieves this by incentivising holding rather than spending. A person who obtains a coin is eligible for 50% interest per annum. This is a very effective setup and one of the most generous in the industry. Not only it withdraws currency from the supply chain but also secures the network through improved Proof-of-Stake mechanism.
In order to control inflation and bring it to annual rate of physical gold extraction, the rewards will be successively reduced over the decades. Early adoption period for Diamond has been set to last for a few years, which is something unseen in crypto it requires a long term commitment that will translate into a slow but cumulative effect of organic growth. Such model is also a pledge on behalf of developers to think strategically and long term.
Price volatility is a hallmark of cryptocurrencies. After each rally there will be an opposing slump, however, lack of regulations and clear controls in the industry leaves open door for speculative attacks on currencies which can effectively lead to market crash.
The idea of creating a remedy for this type of actions isn’t new. To deal with the problem Diamond’s price is ‘protected’ by two services. The first one is Diamond Multipool that allows participants with their own hardware to mine bitcoins and get Diamonds in return. The other service is called Diamond Cloud Mining where people who buying into the scheme collectively mine BTC in the cloud and convert it to DMD as payouts. This on its own cannot prevent price depression but ensures value would recover to the former level much quicker. The system has been time tested and proved to be adaptive, sustainable and rewarding for its participants.
Of course, being able to make money is worth nothing if the system is not secure. Developers from Diamond proved over the time, they don’t treat network security as a given but rather a continuous challenge that needs to be addressed. Improvements in protocols and software optimisations provide a streamlined client for the end user.
Employing a Hybrid Security of two separate protocols working in tandem is the cornerstone of Diamond’s security. If this wasn’t enough, Diamond Coin Foundation has set up a protection tool called ‘Reactor’ that provides double benefit of additional safeguard and boost to price stability mechanism of Diamond Cloud Mining.
However, currency is not the only function of Bitcoin protocol. The protocol together with its blockchain is a powerful tool that can be utilised to create much more than that. Eventually Diamond will become a Bitcoin 2.0 decentralised services ecosystem; a product with increasing spectrum of investment options.
It is clear Diamond [DMD] solves several problems faced by cryptocurrencies, but by no means tries to be a Jack of all trades.
Is specialisation a way forward? For some projects definitely yes and looking at the example of Diamond we can safely say such tactic pays off. For those wishing to continue struggle with Goliath for dominance in becoming a major micropayment cryptocurrency the fight is still on.
