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Ghana can achieve price stability and merchant sales with Crypto-currency
Source: ghanaiantimes




Kwesi Amoafo Yeboah

Block chain based digital currencies based on cryptography have become increasingly popular worldwide, despite their inherent problems. Finally, a new crypto currency that offers both price stability and merchant sales capabilities is arriving in Ghana.

Since Digicash, and then PayPal were introduced in the late 1990s digital money has become part of the world’s lexicon. However it was the introduction of Bitcoin at the start of 2009 that truly launched what history will eventually remember as the digital money revolution, through its introduction of crypto-currencies, that apply cryptography, a complex mathematical model to issue and determine value digital currencies. This has enabled a fundamental change from the centralised management of traditional currencies to a decentralised system that is market led, devoid of bureaucratic manipulation by sovereign governments and multilateral institutions, and allows for much lower transaction costs.

Over the past eight years, some 800 crypto currencies have been developed along the lines of Bitcoin, with a combined market valuation of some US$110 billion currently, but Bitcoin is still clearly the most widely accepted one globally, accounting for over 42 per cent of total daily crypto-currency transaction volumes worldwide. While Asia has emerged as the early leader in the acceptance and use of crypto-currencies – in Japan for instance they are already mainstream, with some 660,000 outlets accepting and using them – they are also catching on elsewhere around the world including Africa. In Ghana, the trading and use of crypto currencies may still be an esoteric activity but there are already people who trade large volumes daily, running into the equivalent of thousands of US dollars with Bitcoin in particular.

Despite the growth of crypto currencies based on the model introduced by Bitcoin, the growth in its usage is constrained by several factors. The most important is the often severe value fluctuations they tend to undergo. Perhaps the most vivid illustration of this is presented by Asteria, a cryptocurrency designed like Bitcoin which opened the year at US$8 per coin. By the beginning of April it was trading at US$48 per coin, but just three months later, by early July its value had skyrocketed to a peak of US$400 per coin. However just a week after hitting that peak its value had plummeted to US$38 per coin, before rising to US$160 by the end of the month.

Another major constraint is that cryptocurrency transactions tend to be slow, because of the process involved. A cryptocurrency is a type of digital token that relies on cryptography for chaining together digital signatures of token transfers. This uses a decentralised ledger employing peer-to –peer networking and so proof of work is also required.

The sum total of all this – in plain English rather than techno babble – is that transactions can take between 30 minutes to an hour to consummate. This makes the use of Bitcoins and the likes almost impossible to use for merchant sales and purchases – it takes too much time for the buyer’s value to be confirmed. Thus up till now, cryptocurrencies uses have been largely restricted to monetary transfers for cross border transactions and e-commerce transactions.

But even in this respect there is yet another snag: the issuance process for cryto currencies limits their creation and this consequently places limitations on their capacity to be used to handle transactions.

Now however, this is about to change with the introduction of a revolutionary new cryptocurrency, known as Dynamic Coin which employs an algorithm that both stabilizes its value, thereby enabling it to act as a safe store of value, and also delivers radically faster transaction consummation times, thereby enabling it to be used for merchant sales. This has the potential to turn the cryptocurrency market on its head, toppling Bitcoin from its leadership position and possibly wiping some of the less used currencies off the map altogether. And the promoters of Dynamic Coin are now looking to use Ghana as their launch pad for introducing their new cryptocurrency into Africa.

Dynamic Coin (DMC for short) is a new, open sourced, fully decentralised, peer-to-peer currency unlike any other in existence. Designed from inception to be scalable so as to handle an unlimited number of coins, it has a fully inflation-proof mechanism, similar to traditional currencies. The algorithm used addresses supply and demand and effectively ties its value to the US dollar, thereby providing it with price stability. This eliminates the potential for the sharp value flunctuations that afflict the other cryptocurrencies in existence. Indeed, while other cryptocurrencies have traded more like international commodities such as crude oil and precious metals, DMC actually trades as a true currency, offering price stability and therefore a store of value.

Importantly, DMC transactions use a 15 second block time which is 40 times faster than Bitcoin, and so transactions are confirmed in one minute (using four blocks) instead of up to one hour. Besides there are no block size limitations, allowing unlimited transactions per minute.

The result of all this is that DMC can be used at merchant sales points, the first cryptocurrency to have this capability; the combination of unprecedented fast processing time and unlimited block size makes it realistic to load Dynamic Coins on a debit card which can be used for instant transactions at points of sale worldwide.

“Dynamic Coin is the world’s first true transactional cryptocurrency” enthuses Jack Kelleher, a founding partner of Dynamic Coin. “It is very unique in that it has merchant service capabilities and can serve as an android wallet.”

DMC has been designed as what Kelleher describes as a “value retention currency” providing what he calls “disruptive price stability” to the digital marketplace. Utilising tokenised assets for transactional purposes, DMC enables the instant transfer of value and ownership within an organizations core payments and remittance infrastructure.

“Dynamic Coin can be incorporated into the payment processes of large corporations” asserts Kelleher. “Any large corporation with on-line presence can play in that space, for business to business transactions among other things.”

Kelleher certainly is well equipped to promote this new currency. A former Senior Advisor to the CEO of Bloomberg Trading Solutions Group, he was a member of the executive committee and was responsible for driving vision and execution internally as well as strategic planning and managing key organic and inorganic initiatives across the enterprise. He has also been Practice Manager for Financial Services at Active Data Exchange and before that he was an equity trader at First Boston/Credit Suisse.

DMC is backed by and traded on the USDX Exchange. Importantly it is fully Know Your Customer and Anti Money Laundering regulations compliant.

DMC’s promoters are now looking to get it up and running in Ghana as the first step towards making it accepted and used widely across Africa. Here, the point man is Kwesi Amoafo Yeboah, accomplished IT entrepreneur and the current chairman of the Venture Capital Trust Fund.

Finally, Ghana is about to get a crypto currency that can be used widely. Being a country that has suffered steep local currency depreciation, DMC should be a welcome alternative.



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