Diem, originally known as Libra, is a centralised, international, stable cryptocurrency project that will go live in 2022 and be led by Facebook and a group of significant global businesses. Each coin produced by Diem is backed by a reserve of liquid, reliable assets that preserve its worth. Diem will achieve complete decentralisation five years after its launch. Furthermore, If you are new in crypto trading you must see the facts about bitcoin trading so you know what to do first in crypto investment.
Numerous unbanked or underbanked individuals may be shut out as the globe transitions to a cashless, digital-only economy. The Diem cryptocurrency intends to enable participation in the digital economy for those without access to the financial system. Diem’s value will fluctuate less than other cryptocurrencies and Ethereum because it is backed by a reserve of fiat money and assets. In contrast, the value of these coins is highly prone to price speculation.
Table of Contents
Diem association
The Diem association keeps an eye on how the payment system is run and ensures that everything is legal and safe. The members manage the validator nodes that run the blockchain and maintain the network’s accuracy and security. The management of the network and the project’s development fall within the purview of the Diem Association. The association is governed by a council made up of one representative for each association member.
How to become a founder member of this association?
You will have to bet $10 million to join the founding group. Additionally, running a validator that verifies and approves transactions following the Diem rules will be necessary for each founding member. It is somewhat reminiscent of what a miner in the Bitcoin network does.
Features of Diem cryptocurrency
Below are some key points of Diem cryptocurrency:
- Diem was built with open-source blockchain technology.
- Diem is a stablecoin that is fully backed by an asset reserve.
- The Diem Association, an independent organisation, oversees the project’s governance, implementation, and long-term strategy.
- Single currency stablecoins will be supported by Diem Coins (USD, EUR, and GBP).
- Diem is safe, scalable, and dependable. It is an open technology that anyone can build and deliver to billions of people.
- Diem seeks to offer a blockchain with fast throughput, a digital wallet, and a cryptocurrency pegged to the dollar.
- Diem will become the first cryptocurrency supported by a top-five tech business if the initiative is successful.
Diem is centralised
A collection of validators, chosen to confirm transactions under Diem’s LibraBFT consensus mechanism, power the Diem blockchain. By doing this, it is made sure that no one party including Facebook and Novi has an excessive amount of control over Libra.
Diem claims to enable global financial inclusion, but it must adhere to rules. Therefore, it is conceivable that Diem Association will be able to block addresses and stop transactions that are against those rules.
What is a Novi wallet?
Although the Novi wallet is currently under development, its website mentions that to register, you will need to provide proof of identification from the government. Additionally, you will be able to buy Diem using the wallet and fiat money. Facebook started the Diem program, but many of the biggest businesses in the world have joined as partners. To mention a few, there are Shopify, Uber, and Spotify.
According to the most recent information on the Diem Novi cryptocurrency wallet, Facebook may be considering releasing the app independently. The action might be seen as a signal for Diem, which plans to introduce a stablecoin backed by the dollar to establish itself as a major digital currency.
Concerning points about Diem cryptocurrency
As you can expect, the Diem initiative is subject to some criticism. Some points are given below:
- Diem will likely only be accessible to those who complete a particular authentication process, leaving many unbanked and underbanked people in the world out of the loop.
- Diem appears to be yet another fiat currency, but this time corporations rather than central banks oversee it.
- Diem is intrinsically linked to the swings of major fiat currencies because its value is supported by them.
- Transactions using Diem are anonymous, just like Bitcoin. As a result, all transactions are open to public scrutiny. However, because Diem addresses are made up entirely of random characters and digits, it is impossible to determine who sent what to whom.
Conclusion
When Diem will launch and, if so, how successful it will be, are still very much in doubt. But there is no denying that Facebook’s decision to launch Diem is a game-changer. It demonstrates that we are entering a new era in which corporations also can produce money.
