2021 looks set to be a big year for the blockchain world as several projects like Incompatible tokens (NFT) and centralized decentralized financial exchange (CeDeFis) take center stage. Facebook's scale is also at the forefront.
2021 looks set to be a big year for the blockchain world as several projects like Incompatible tokens (NFT) and centralized decentralized financial exchange (CeDeFis) take center stage. Facebook's scale is also at the forefront. It wasn't long ago that the media was filled with news that the world's largest social media network was developing plans for a global digital currency. Then, after a while, it looks like Facebook is putting off plans for it. Disputes with regulators around the world have helped slow and redirect Facebook's plans. Instead of giving up, Facebook decided to develop a strategy and then launch a “different” global digital currency in 2021 after the Diem project was renamed. Different in the sense that they underwent name and administrative changes. The Libra Association, which was renamed the Diem Association in December 2020, will lead the project.
Facebook Diem is a system that will soon be released without permission and is based on blockchain technology. The system will have a stable coin called Diem and will work on its blockchain network. Although Facebook is proposing the project, the Diem Association will oversee all project work for transparency. The Diem Association is an amalgamation of companies from various sectors of the economy, including technology, fintech, telecommunications, venture capital, and non-profit organizations. The original coin, Libra, is not as decentralized as Diem. While the goal is illegitimate, the current plan is for Diem to run on the official blockchain. Therefore, only members of the Diem Association could do business within it.
However, this is because the development team has not yet developed a robust solution that can process transactions for billions of potential users without permission. Fans hope that this will change once the project is developed. In the long term, Diem's main goal is to make financial services easier and faster for the world. The US dollar, euro, British pound and other major fiat currencies will support the Diem project. If approved by US regulators, Diem will operate as a full-fledged central bank operating on blockchain technology. As you probably know, this has nothing to do with Bitcoin (BTC) and others. Facebook's new global digital currency will revolutionize the global payment system. Therefore, the Facebook Diem project contains three unique parts that work in sync to create an inclusive and secure financial system. They include:
1. Reliable blockchain technology base
One of the components of the new cryptocurrency from Facebook Diem is a blockchain infrastructure with reliable scalability and security, which serves as the technology base of the payment system. Diem's source code is open source on Github. Anyone can access the source code written in Rust. It offers scalability and will help the infrastructure to accommodate multiple projects. Diem also developed a new programming language called Move to create smart contracts and execute custom transactions.
2. New digital wallet
While creating a digital wallet is fairly easy after a few hands-on lessons, Novi is a complex wallet that requires all the time and attention you can afford. One of Facebook's many companies, Novi Financial, is developing a digital portfolio for the Diem project. Until the end of 2020, the wallet is called Calibra. Novi is a standalone app that we hope will support integration with WhatsApp, Messenger, Instagram, and maybe a few other platforms. Its simple handling is astounding.
The Diem Coin is one of the key components of Facebook's new project for a global digital currency. It has strong support for Diem reserves, which include cash or cash equivalents. There are also short-term government bonds. Therefore, Diem is a stable coin. According to the development team, the coins will not be mined, as will Bitcoin and many others. In the early stages, only members of the Diem Association could process transactions. However, Diem plans to completely migrate to the unauthorized stock checking system within the first five years of its launch.
Those values are the design of Facebook Diem. determine
Like other leading cryptocurrencies, several principles act as guidelines for Facebook Diem's functionality and design. Here are some of the key values that make the design unique, with all hands ready to launch later in 2021: People should have the right to control their legal work and its outcomes. More people need access to financial services. The global payment network must be open, cheaper and faster. All of this leads to better economic opportunities and more efficient world trade. Slowly, but over time, people will build trust in the various forms of government that are spread out. In addition to supporting ethical actors and consistently maintaining payment integrity, people and institutions have a responsibility to drive the growth of financial inclusion. An open and much wider payment network with unrivalled interoperability and high compliance standards must adhere to management and design practices.
How will Facebook use it?
There are many ways a cryptocurrency backed by a company with the power and reach of Facebook can offer users around the world. In addition, the unique features it offers make Facebook Diem a great creation in this crypto era. Here are some ways Facebook will soon be using Diem:
Consumers should expect wire transfers and wire transfers to be easier and less stressful. In addition to simplicity, the project guarantees fast transaction speeds and lower fees than financial intermediaries. The lengthy process involved in sending money, especially across borders, through traditional financial intermediaries could be a thing of the past.
One of Facebook's main focuses is creating better business opportunities and effective global e-commerce. It becomes easier to use because Diem has billions of users and Facebook has at least three billion global users. As a member of the Diem Association, Shopify ensures that ecommerce site owners can easily integrate coins. Each member company that manages B2C services will deploy the Diem system on their platform - that is, in the truest sense of the word, unparalleled convenience.
3. Cross-border payments
Diem can help reduce the already high cost of cross-border remittances - 6.5%. As a cryptocurrency with an adequate payment system, Facebook Diem is almost entirely digital. Transactions are programmed in its database. Expect significantly lower operating costs than traditional wire transfer lines. The result is lower usage fees and higher market share for cryptocurrency users.
Management is one of the key cases in the use of Diem cryptocurrency and it stems from Diem's management structure. It's impossible to compromise Diem's functionality and properties. This in turn ensures that the project can serve as an alternative cash model for diverting the flow of funds to management. Especially? Transactions by government agencies for various public welfare tasks as well as detailed examination of grants and public expenditures ensure benefits to the general public. In addition, because Facebook does not have sole control over Diem, the use of Diem cannot be misinterpreted for the public good.
This is the difference between Facebook Diem and Facebook Connect. In May 2008, Facebook introduced Facebook Connect as the next iteration of the Facebook platform. It allows users to connect their friends on Facebook, identity and privacy with websites on the internet. On the other hand, Facebook Diem is an official and blockchain-based payment system that contains private cryptocurrencies. The announcement of the launch of Facebook Libra has sparked various debates. Some believe it will compete with national currencies, while others deal with technology issues and accompanying privacy concerns. More specifically, those who believe it will replace the country's currency may be wrong for several obvious reasons, while those who view the project based on Facebook's history of data breaches and monopolies may be right.
First of all, it says that Libra currency is 1:1 backed by traditional currencies like US dollar, euro, yen, etc. The claim that Libra, the supposed secondary currency, will be an alternative to the base currency is false. This raises the question of how a secondary currency whose value is based on the base currency will replace it. Given this, the potential threat is that user data could be tampered with. For example, Hyun Song Shin, economic adviser and director of research at BIS, acknowledges that including big technology in digital currencies has several potential benefits, although it can reduce competition and create privacy concerns. Shin repeated, "The goal should be to respond to the entry of high technology into financial services to reap benefits while limiting risk." He added:
"Public policy should be based on a broader approach based on financial regulation, competition policy and data confidentiality regulation." Today anyone can build a cryptocurrency payment system from home. The key factor, however, is that a reputable organization with a verifiable record supports Diem on Facebook.