What is Facebook Libra – Diem?
With every online giant having its own financial services, Facebook decides to take a chunk off the crypto-cake by introducing its payment system – Libra. Libra, now Diem is a digital financial platform based on the Blockchain and Stablecoins infrastructure to boost and ease financial activities on Facebook. It is said to launch in 2021.
Well, that is all about it, or is there more? Read on!
Like everything with Facebook, their bold move with Libra (Diem) tickled the crypto market. Many were enthusiastic about the new introduction by the social media company. With all the scandals the company has roped itself in; the project was a tad too weighty for US politicians and lawmakers. This saw a myriad of regulatory pushback denying it from taking off. Some worried that accepting it was dabbling too much in core economics. Others were bothered that it will give too much power such a platform to control global politics and economies.
Yet others felt that the US does not have a reliable body to monitor how these financial services will function or affect the other sectors of the national and global affairs in the future.
Additionally, with over 2.7 million people using its platform monthly, Libra (Diem) was already a success. This is a reality that lawmakers were not deal with currently.
How did Libra come about?
The global digital market space is filled with opportunities. As more people are transacting through their phones, every new system needs to be better than the previous. Despite strong companies like Mastercard, PayPal, and co doing the best, crypto projects are trying to gain ground in this market too.
Libra (Diem) was birthed in 2019 by Facebook. According to the company, the aim is to help the unbanked assess a stable financial platform without a bank.
That is thoughtful.
The entire system was to be governed by the Diem Association. This was an independent body with headquarter in Geneva. Its members included top people and companies in tech, payment, Telecomm, venture capitalist, non-profits organization, and Blockchain.
Facebook is said to have 27 participants in this association.
How is Libra (Diem) different from other crypto payments?
With strong financial support, Libra (Diem) was set to be the most stable fiat currency and means of exchange worldwide. It will give it the same power as Bitcoin but will be a less risky asset. After been bashed and battered by politicians and lawmakers, it was enveloped by an uncertain future and bad press. The excitement died, and it was back to the drawing board.
The name was rebranded to Diem, its whitepaper rewritten and altered to reduce the influence and role of Facebook to hasten its acceptance and regulation by the state.
Is Diem a cryptocurrency?
That depends on how you analyze it. Although it is based on the Blockchain system and uses the same cryptographic technology, it does not behave like a real cryptocurrency. It is a permission Blockchain entity that is decentralized and centralized.
According to the team behind Diem, it is meant to complement the usual exchange system wherever it is used. Libra is not a cryptocurrency as it is neither decentralized nor censorship-resistant.
The system is monitored by the members of the Diem Association, and while it has its downside, it has advantages too. One of which is to detect and track malicious and scam transactions on the platform.
How will the Diem function?
Diem is based on a Blockchain infrastructure. It's dependent on a custom-built Blockchain system designed from scratch for its network users.
This infrastructure was secretly built to cater specifically to running the Diem when it is launched. Users on this network, including Facebook, WhatsApp, and Messenger will have a digital wallet (Novi wallet) incorporated into their dashboards. This will enable transparent and secure transactions on the platform. It will allow the conversion of Diem to Dollar and vice versa with other fiat currencies as well. Backed by Blockchain and Stablecoins, it will be one of the most secure open-source global payment systems ever on the Blockchain.
Benefits of the Diem
First off, the introduction of Diem on Facebook will automatically convert almost 2.7 billion users to crypto users. This will be a massive achievement by any single company and a new era in the crypto space.
It will educate more people about cryptocurrency better than any other method employed previously.
It will boost innovation – the introduction of the Diem will trigger DApps developers. They will leverage the platform and design various apps to simplify or augment transactions according to the global demographic.
Enables swift transaction – because all transactions are on Facebook, it is simple, secure, and affordable. Users can easily make or receive payments across the platform from anywhere in the world.
What is the future of Diem?
The future seems great if you take away the speculation of the US politicians and Lawmakers. While it cannot replace Bitcoin, it still has a long way to convincing the public of its intention as a future currency. However, with the launch date ever so near, it is a waiting game to see if the company will make up their 100 members in the Diem Association by 2021.
Overall, Diem intends to change the global payment system by leveraging innovation and telecommunication to create an all-inclusive platform accessible to everyone. So if you have a mobile device and a Facebook account, you are good to go. And as mentioned, it will peg its currency to current exchange methods. It will include the US dollar, pound, Euro, and Singaporean dollar to boost ease and acceptance in the market. Furthermore, it is using its Blockchain-based infrastructure that depends on the programming language Move. This newly created Smart Contract will enable billions to assess the page but prevent cloning of assets.
Libra (Diem) dream is to build a financial system and global currency that the world can use. This is a platform that will empower people. It will also encourage seamless transactions, especially for the billions of unbanked individuals.
Hopefully, the house can see beyond the shortcomings of Facebook and allow Facebook Diem to see the light of day.
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