Both the Dynamic & condenser Microphone use a transducer to convert sound energy into electrical energy. This electrical energy is usually recorded or transmitted over a loudspeaker.
A dynamic microphone creates sound using electromagnetic induction. Conversely, condenser microphones operate using an electrostatic principle. Dynamic microphones tend to be more rugged, while condenser microphones can be fragile.
Condenser microphones also require an additional power source called phantom power. This is usually provided by a battery, an external power supply, or by the mixing board. A dynamic microphone does not need phantom power.
A condenser microphone is usually more fragile and expensive than a dynamic microphone. As a result, condenser microphones are used most often in a controlled studio environment. Dynamic microphones are well-suited for both studio and live performance use.
The major difference between dynamic and condenser microphones is quality. When it comes to recording, high-end condenser microphones provide a warmer more analog sound. While the recording process may change the sound later, the initial tracking with a condenser microphone will bring out an instruments tone and timbre much more clearly than a dynamic microphone.
On the other hand, condenser microphones are much more delicate than the more robust and sealed in dynamic microphone. In addition, a high quality dynamic microphone, is a good deal less expensive than their more fragile counterpart.
I have uploaded 1 links in my sources they might help to distinguish between the microphones.