Digital currency alias cryptocurrency since its launch has become a global sensation. Although the blockchain-based currency is evolving with each passing day still umpteen issues and worries are churning around the new-age currency. And adding fuel to the fire is the Diem coin backed by social media giant Facebook.
However, In June 2019, Facebook launched its highly ambitious cryptocurrency – Libra. The project was simple with the definitive goal of creating a financial payment system that will permit millions of users to carry out financial transactions globally. In addition to this, a statement issued by Facebook under Libra was “connect people who don’t have access to the traditional banking system”.
Having said that, Libra received backlash from global regularities and politicians around the globe, it could threaten the banking system, monetary stability, and could be a hub for money laundering. Amidst mounting criticism, in December 2020 Diem was born – with the mission and vision of creating a secure, reliable, and compliant payment system empowering 1.7 billion people to do financial transactions worldwide.
Why does Facebook want to re-launch its cryptocurrency? What is Diem? Is it worth investing in Diem? How is it different from other digital currencies? So, let’s unveil the truth behind the Diem Coin.
Why Does Facebook Want A Global Currency?
Libra was the first digital currency designed by the company to ease financial transactions, eliminate additional fees and costs, and empower 1.7 billion people without any bank account. To add, initially Libra was created as a single coin attached to multiple currencies such as Euro, Dollar, and Yen. But later it was changed to multiple coins supported by different currencies. Additionally, Libra lost the top five key players including PayPal, MasterCard, Visa, and Vodafone due to substantial issues. And this impels Facebook to make some tweaks – and launch stablecoin cryptocurrency Diem.
Moreover, the Diem coin isn’t Facebook digital currency; instead, it is a project initiated by a group of independent members responsible for governing the Diem coin’s activities including its launch, its daily operations, and its growth.
Furthermore, the leading social network in the past has already dealt in virtual currency termed as credits. It was employed for games played on the channel. Plus, the CEO of Facebook Mark Zuckerberg, is ardent cryptocurrency enthusiasts have acknowledged digital currency would be beneficial for platforms like Facebook. Along with this, he also divulges that sending money should be as easy as sending a text message on Whatsapp!
With that being said, the other major cryptocurrency plans for Facebook may conclude with creating a digital wallet to store the virtual currency. The Libra wallet was rebranded and refined from Calibra to Novi.
On top of that, it is anticipated – In 2021 Diem will become the most sought-after digital currency in the world within a few years. You must be pondering how; the answer is the massive user base of Facebook together with Whatsapp, Instagram, and Facebook messenger.
What is Diem exactly?
Diem-a a new cryptocurrency project, which at the onset was originally founded by the American multinational technology Facebook, is currently monitored and supervised by an independent Diem association. The innovation of this particular program was executed with an objective to allow universal access to financial services.
Delving deeper; Diem primarily runs on the fairest and square Blockchain technology. It is thus considered to be quite secure, scalable, and reliable and the safest bet for the users. Additionally, it being an open technology permits anyone to build on and can serve billions of people.
For your enlightenment; the highly touted Blockchain technology furnishes a decentralized, reliable, and transparent system to readily audit any transactions done. What’s more, Diem even paved a way for an open-source prototype in the shape of Diem core to stimulate a global collaborative effort to further boost the technology.
In continuation; the beauty of investing in Diem coins is that they are backed up by reserves. This may flabbergast you; these also entail cash and short-term government securities too. Consequently, considering all these aspects, Diem can be termed as a “stablecoin” and is likely to oversee its slick price when it hits the market. In other words, the probability of volatile issues just in the case of myriads of other cryptocurrencies is on the lower side.
Talking about the members, Diem constitutes both from the businesses along with nonprofit organizations. Andreessen Horowitz, Lyft, Shopify, and Spotify-for instance are some of the renowned ones-to-name a few.
Another piece of vital information: another company with the moniker “Novi Financial” is incessantly working on building the first digital wallet for Diem. However, if you ask about when it would be publically up for grabs, the short answer is: yet can’t foresee.
How Diem Is Distinct From Other Digital Currencies?
Let’s begin with how Diem is like other virtual currencies such as Bitcoin and Ethereum. First, all the Diem transactions are documented on blockchain just like other cryptocurrencies. Secondly, Diem will exist only in digital form; you will not be able to see it physically like a coin or in paper format.
Now, how Diem is apart from cryptocurrencies. First and foremost, Diem is a stablecoin pegged by the US dollar. And in the future, Diem may be linked to other countries’ currencies, the European Euro, Japanese Yen, and British Pound for example. Also, stablecoin (
USTD, Binance USD, and True USD) are designed to be used in the real world. Simply put, they can be used to buy goods as well as they are non-volatile.
Bitcoin is highly volatile as it is not connected with any fiat currencies of the world. Hence, it is lucrative for many investors to make huge profits out of its abrupt increase and decrease price in the market.
Another striking difference between Bitcoin and Diem is its functionality. That means the Diem function is just like traditional fiat currencies along with being simple and useful. As Diem is equivalent to one dollar –you can transfer it easily anywhere in the world. In contrast, Bitcoin can be a difficult concept for non-tech individuals as its working usage is divergent from the traditional currencies.
Perhaps, there isn’t denying this; the Facebook and Diem association in collaboration has given sleepless nights to most governing bodies of the US. Hence, it would be interesting to see revolutionary Diem changing the financial system in the coming days!