The truth is, a lot of what we do here in Dagcoin may be slightly unclear to some of you. Therefore, we’ve put together some of the most frequently asked questions about Dagcoin in one article in order to provide some clarity.
We also suggest you regularly keep an eye on our News & Blog section where we tackle the most exciting topics emerging from the global crypto scene as well as from the bustling Dagcoin hub. But now on to answering some of those burning questions you may have been wondering about.
1. Some of you have expressed confusion regarding the fact that changing your dagcoins to fiat currency isn’t as smooth a process you’d imagine it to be. Let us explain why!
Today, Success Factory has become one of the most popular methods of purchasing dagcoins. As a result, the supply on the official dagcoin exchange platform SwipeX is currently higher than the demand.
However, once all three billion dagcoins have found an owner, SwipeX will become the primary exchange platform and dagcoins can no longer be purchased through Success Factory.
For the moment, however, depending on the total number of dagcoins purchased, they must initially (and can also later) be deposited for 12, 24 or 36 months. According to the months deposited, buyers will then be rewarded with a certain percentage of coins.
The additional coins will be distributed as a token of gratitude for the fact that the purchaser of the product is ready to contribute to the development of the ecosystem and thus initially freeze their coins.
So we urge you to explore the numerous possibilities the Dagcoin ecosystem has to offer in using your coins. You can have a look at the ecosystem here and find merchants from your region here. Also, consider placing your dagcoins in Dagcoin Grow to increase their value, passively.
The processes involved in building Dagcoin are indeed taking longer today than would have been expected. The reason for that is that in parallel with the development of dagcoin as a cryptocurrency, the construction of the Dagcoin ecosystem is being executed which is time-consuming and costly.
But we are committed to creating an environment for all dagcoin users where everything they need can be purchased with dagcoins. The companies that joined us in the early years share this vision, and we can continue to operate with their trust and support.
Dagcoin has taken on the mission to prove that the hype of ‘getting rich fast’ is not the real potential a cryptographic currency holds. Another important pillar of Dagcoin’s foundation is to provide billions of people around the globe, who still do not have access to traditional banking, the possibility to store and use their money in an accessible and affordable way.
2. You want to know how exactly Dagcoin is distinct from Bitcoin? Let us try putting it this way...
Bitcoin is widely used as a speculative trading tool, its value fluctuates constantly. Therefore, it cannot be used as a real means of payment as its value can fluctuate from month to month in which case both, the merchant and the customer can end up losing their money. In fact, around 80% of individual traders lose money when trading with Bitcoin.
Dagcoin however aims to become a daily used, regulated and stable cryptocurrency. To achieve this, Dagcoin uses fundamental pricing, where the price of the coin is based on the number of merchants and coin holders who use it.
This ensures a fixed and predictable coin value, which makes Dagcoin a common currency for everyday use. Unlike Bitcoin, Dagcoin also uses user authentication to comply with international regulations.
That is also the biggest technological difference between Dagcoin and Bitcoin. Dagcoin is a centralized cryptocurrency, Bitcoin on the other hand not. This means that dagcoin users store their coins on their personal devices and the transactions are confirmed by a network of witnesses managed by Dagcoin, not the community.
This approach will also significantly save natural resources, as there is no need for mining as is the case with Bitcoin. Last year alone the maintenance of Bitcoins technology used as much electricity as the whole of Iceland. Dagcoins witness network however consumes about the same amount of energy per year as five average households.
3. Why is dagcoin centralised? Alright, we gotcha!
A centralized cryptocurrency like Dagcoin works in accordance with financial regulations which allow it to one day become a widely used currency on a daily basis. In the case of decentralized cryptocurrencies, it is possible to make illegal transactions and there is no overview of who is behind these.
However, in the case of centralized cryptocurrency, it is possible to identify users and thus prevent and deter money laundering and other illegal activities. A centralized infrastructure also helps to save the energy needed to maintain the network of "witnesses".
4. And now the exciting part: how is dagcoins price calculated?
Today, the price of dagcoin depends on the balance of the community: the number of individual users and merchants of dagcoin which together determine its value as follows:
- 10,000 new dagcoin users = € 0.01 added to the price
- 100 new companies that accept dagcoin = € 0.01 to the price
Example: today's price of € 0.76 comes from the equation of € 0.62 (620,000 users) + € 0.14 (1,400 companies) = € 0.76.
The price of Dagcoin is today still related to the size of the community. If the number of individual users and traders of dagcoin is large enough to keep its price stable, dagcoin will be released and the price will be determined by supply and demand.
The same principles apply when the number of businesses and/or users in the ecosystem decrease. As a result, the price of dagcoin would fall.
At first sight, this might seem in contradiction to the principles of the free market, which requires the price to be determined on the basis of supply and demand. However, after the market analysis in 2017, we realized that in order to change the cryptographic market, we need to take a different approach.
As most cryptocurrencies are seen as a financial instrument and their price is manipulated, we decided to initially price dagcoin on the basis of fundamental parameters (the number of companies that accept dagcoin and the number of people who use dagcoin). As a result, dagcoin has no daily fluctuations, which makes its use even safer for both users and companies.
Our vision is to build a community large enough around the Dagcoin ecosystem that the price of dagcoin would remain stable and could not be manipulated.
Once we are convinced that through the daily use of dagcoin the community remains stable, price and demand will determine the price. National currencies (euro, dollar, pound) are built on the same principles: the price remains stable through the trust of the community and the possibilities of usage.
National currencies are constantly being traded but in the big picture, their prices do not fluctuate because the user community is large enough to keep the average price stable.
The authors of Dagcoin do not claim that such an approach is the only way to increase the reliability of a cryptocurrency and realizing its true potential, but the first step in changing the world of cryptography has nonetheless been now made.