The year 2021 seems to be a big year for the blockchain world as several projects, such as nonfungible tokens (NFTs) and centralized decentralized
The year 2021 seems to be a big year for the blockchain world as several projects, such as nonfungible tokens (NFTs) and centralized decentralized finance exchanges (CeDeFis), are taking the central stage. Also at the forefront is Facebook’s Libra.
Not too long ago, the media was rife with the news that the world’s largest social media network was developing plans for a global digital currency. Then, after a while, it looked like Facebook shelved plans for it. Disputes with regulators around the globe had a hand in delaying and redirecting Facebook’s plans a bit. Instead of backing out, Facebook decided to strategize and launch a “different” global digital currency later in 2021, after rebranding the project to Diem.
Related: New name, old problems? Libra’s rebrand to Diem still faces challenges
It is different in the sense that they had a change of name and administration. However, the Libra Association, later renamed to Diem Association in December 2020, will manage the project.
What is Facebook Diem?
Facebook Diem is a soon-to-be-launched permissionless payment system based on blockchain technology. The system will have a stablecoin called Diem and run on its blockchain network.
Although Facebook proposed the project, Diem Association will oversee the entire operation of the project for transparency’s sake. The Diem Association is a body of companies from different sectors of the economy, including technology, fintech, telecoms, venture capital and nonprofits.
The initial coin, Libra, was not decentralized, and neither is Diem. While the goal is to be permissionless, the current plan is for Diem to run on a permissioned blockchain. Consequently, only members of the Diem Association can run transactions on it.
However, it is so because the development team has not yet developed a robust solution that can handle permissionless transactions for its billions of potential users. Enthusiasts are hopeful this will change as soon as the project develops in the pipeline.
In the long run, the ultimate objective of Diem is to help the world to gain access to financial services easier and faster. The United States dollar, the euro, the British pound, and other major fiat currencies will back up the Diem Project. If the project gets approval from the U.S. regulators, Diem will function as a full-scale central bank that runs on blockchain technology. As you probably know, this is nothing like Bitcoin (BTC) and others.
Related: The metaverse: Mark Zuckerberg’s Brave New World
Components of Facebook’s new global digital currency
Facebook’s new global digital currency has its sights set on revolutionizing the global payment system. As such, the Facebook Diem project comes with three unique parts that work in sync to create an inclusive and safe financial system. They include:
1. A reliable blockchain technological foundation
One component of the new Facebook Diem cryptocurrency is a blockchain infrastructure with scalability and trustworthy security that serves as the technological foundation of the payment system.
Diem’s source code is open-source on Github. The source code, written in Rust, can be accessed by all and sundry.
It affords scalability and would help the infrastructure to host several projects. Diem is also developing a new programming language called Move for building smart contracts and executing custom transactions.
2. Novi digital wallet
While it’s pretty easy to build a digital wallet after undergoing renowned practical classes, Novi is a sophisticated wallet that requires all the time and attention you can afford. One of Facebook’s numerous companies, Novi Financial, is developing the digital wallet for the Diem Project. The wallet was called Calibra up until late 2020.
Novi is a standalone app that we expect to support integration into WhatsApp, Messenger, Instagram, and probably several other platforms. Its ease of use is already mind-blowing.
Related: Novi-FT? Facebook’s NFT support may not drive crypto adoption
3. The coin
The Diem coin is one crucial component of Facebook’s new global digital currency project. It has a solid backing of the Diem reserves, which includes cash assets or cash equivalents.
There are also short-term government securities. As such, Diem is a stablecoin. According to the development team, the coin will not be minable as it is with Bitcoin and a host of others. In its initial stages, only Diem Association members can process transactions. However, Diem plans to fully transition into a permissionless proof-of-stake system within the first five years of its launch.
Values driving the design of Facebook Diem
As with other reputable cryptocurrencies, some tenets act as guiding principles for Facebook Diem’s function and design. So here are some key values firing its unique design as all hands are on deck for its launch later in 2021:
- People ought to own the right of control over their legal labor and its outcomes.
- More people should have access to financial services.
- Global…
cointelegraph.com