As you said using dynamite will create large holes and blow up anything in that area such as stone and resources.....hence the need to be careful with placing it.
I think the initial idea is that using dynamite will help those people who do not want to spend time digging tunnels...... the dynamite blows a hole and you might then see ore in the surrounding walls.
With using dynamite in singleplayer mode there are probably a number of uses..... there are probably many uses for those with imagination.
For example I spend my time in forests surrounded by dense trees and no mines..... I discovered that will small boulders if I used my pick axe on them I might find a cave hidden beneath. I have not tried dynamite yet but for my adventures in Rising World I would find a boulder with perhaps ore on it, extract the ore and then place dynamite and see what is below. Perhaps dig a hole 10 feet down and make sure you can get out quickly to create a much deeper hole from the explosion.
I think in my case I would use dynamite not in existing tunnels or caves but say for example in this forest I am currently in I would use dynamite in an area to create a quarry to find stone (in this area I do not see any stone in close proximity) or to create the beginning of a mine.
All over the map you see areas where there is a cave with the only access as a vertical drop...... only way to get in there is to dig down with a pick axe. Perhaps here you can place the dynamite at the top near the vertical drop to the cave system and blow away the stone providing an easier access to the cave system.
The following is just a wish list of what I hope to see in the future for Rising World allowing more use of dynamite
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Hopefully down the track Rising World will introduce game play where for example you are in a desert and there are no lakes around you. When it rains the rain will fill in puddles where there are slight indentations in the ground. However with enough rain there could be a small water source created when the rain fills in a much bigger hole...example a few feet wide. Perhaps in the future you can create a dam in the area of your camp by using dynamite to blow up a big hole in the ground and wait for rain. The developer could eventually have the water level in the dam dropping every day when there is no rain and the water level increasing in the dam when there is rain. This could be a fun survival challenge if the weather system is developed further so sometimes you have a week worth of rain so you have flooding ...or you have a drought where there is no rain for weeks.
Thank you very much for your ideas 
I managed twice to kill myself with the dynamite until I found out how it works 
Reminder for myself: don't ignite the dynamite while still having it in your hand *cough*
One further possibility to use dynamite is to use it near a sleeping animal (poor pig had to be my test object) and the animal indeed died and gave me some of his typical loot. Maybe you could sneak to a bear and kill him this way????? But please don't blame me if you die instead. 
Maybe dynamite could also be a way to kill the boar in the cabin (from your story thread which I like very much!)
One day you will put it at an arrow.
One day you will put it at an arrow.
oh yeah, good idea! 
Reminder for myself: don't ignite the dynamite while still having it in your hand *cough*
Hehe, I crashed the game the first time I did this. Turns out you can light it in your hand, but just remember to throw it before the flame reaches the stick. (q key)
Hehe, I crashed the game the first time I did this.
I've reassigned the q key to p key - but could not remember this while the flame was ignited ... was so impressed by the flame coming closer ... BOOOOMM 
flame was ignited ... was so impressed by the flame coming closer ... BOOOOMM
It can happen to the best of us... 
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