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What is Facebook Libra (Diem)?

BitForex Editor
Feb 07, 2021

Cryptocurrencies are actively entering people’s lives, so many companies are now trying to develop payment systems that will operate based on the blockchain. Everyone knows the Bitcoin cryptocurrency, but it is far from the only potentially profitable currency. In 2019, Facebook introduced its currency to the world - Libra. It is estimated that about 2 billion people will become active users.

What is Libra?

Libra is a cryptocurrency created by Mark Zuckerberg in collaboration with David Markus and a large staff. Therefore, Libra is referred to as the currency of Facebook because the former is its founder, and the latter is the former head of the Facebook messenger.

Since Libra was launched in 2019, it is a very young currency with a lot more to come. The developers planned to create Libra as a single currency that could be used in international transactions. This would be incredibly convenient for countries that are experiencing problems with bank transfers. But in the end, it is now one of the options for digital payments that support various coins of central banks, not just their token.

The Libra Payment System

The Libra repayment system (rebranded to Diem payment system) supports single-currency stablecoins pegged to fiat currencies, such as USD, EUR, and GBP. These work similarly to the stablecoins you might know currently. Their value is produced from a reserve called the Libra Reserve. This reserve comprises cash, money equivalents, and government that is short-term.

The Libra payment system will also enable a multi-currency coin called the Diem Dollar. It’s a composite of all of these other stablecoins, and it’s backed by a container of assets that makes sure it has value. You could consider it as a stablecoin of stablecoins (and perchance other assets, like securities). The concept is these various kinds of security could protect it from volatility – an important aspect, something that aims to work as being a form of payment.

The Libra cryptocurrency will be stored within a wallet that is upcoming Novi. As you may have been expecting, this digital wallet may enjoy integration into other social media services and products, such as WhatsApp and Facebook messenger. According to the plans, users should be able to effortlessly convert between US dollars (or other fiat and Facebook’s coins).

The Libra supply rule, called Diem Core, is written and open-source in Rust – you can examine it yourself on the Diem GitHub. According to the plans, Libra may also support a smart contract via a programming language called Move.

Why did Libra change its name to Diem?

The project of launching a new cryptocurrency was initially associated with a social network. Thanks to this, Libra quickly became popular. But in the future, with the development of the Libra Association, it decided to stand out as an independent organization. It changed its name to Diem Association, and the currency was also renamed Diem because of this.

In addition to issuing the currency itself, the organization began work on the Call libra wallet. It will have two tasks:

1.Keep cryptocurrency safe.

2.Allow to make payments, pay for goods with a lower commission than in banks.

Over time, the wallet was renamed Novi, which was not just a new change either. Now, the storage of other coins has been added to its functions, along with the ability to use them online.

The history of the Libra cryptocurrency (Libra)

Facebook is not just a social network. It is also a corporation that is one of the three most profitable. So far, their primary income comes from advertising, but managers do not want to stop there. Cryptocurrencies now provide prospects for earnings, so the issue with Libra’s development was resolved very quickly.

For the first time, the talk about creating your virtual currency came in 2018. Then the launch of this project began. A year later (May 18, 2019), the corporation officially published the news about Project Libra’s launch.

In their release, the developers emphasized that this is a currency for payment and not for speculation, since Libra will fluctuate against the dollar, but only slightly. Therefore, it will be possible to earn a penny from buying and selling. It will be an excellent opportunity for fast, easy, and reliable payment with minimal commission costs for users.

Together with Libra’s release, Facebook pleased many with the desire to combine messengers of popular networks (Instagram, Facebook, and WhatsApp) into one. Then communication will be more convenient and secure due to the updated encryption protocols.

Can you buy Libra cryptocurrency?

This is theoretically possible. Some sites offer to buy Libra now, but there is little sense in it. Such coins cannot be used or sold in any way since they do not officially exist yet.

The original plan was to launch a coin wallet in 2020. But the epidemiological situation around the world forced the creators to postpone the release of the cryptocurrency indefinitely. Although its review and forecasts have been on the Internet for a long time, no one can say for sure what will happen to Libra’s popularity after the launch.

Libra belongs to stablecoins, so it is not a risk coin. Initially, it was proposed to make it standard for all types of payments, but as central banks began to fear the loss of power over money, the direction of activity changed.

Initially, it will be possible to pay for any purchases offline and online through the wallet and virtually transfer money worldwide and then change it at the current rate. Subsequently, there will be other coins available for exchange in the wallet.

Conclusion

DIEM (LIBRA) is just starting on the cryptocurrency market. It’s too early to make plans for it, buy, and exchange schedules. You can get the currency for free, but it will be idle in the virtual wallet for now. What the price of Diem will be in the future is also unknown. This also applies to the benefits of using it for payment. Therefore, you should not rush to invest in development.

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