20 min to read.
What is Diem
What does Diem actually do? Is Diem a good investment? Is Diem scam? Libra or Diem?
Table of Content
- Buy and sell Diem – Interesting facts about the new cryptocurrency Diem
- The Most Important Things You Should Know About Buying Diem Cryptocurrency
- What is Diem (formerly Libra)?
- Diem 2.0: a new concept
- How does Diem work?
- Where to buy Diem?
- Crypto Exchange
- Crypto Brokers
- Diem Coins
- Diem CFDs
- What is the Diem Wallet?
- Diem Course and History
- Diem price development in Q1 of 2022
- Diem Forecast: The Diem Future Prospects
- The biggest Diem criticisms
- Diem vs. Bitcoin
- Diem regulation and legal issues
- Advantages and disadvantages
- Tips for buying cryptocurrencies
- FAQ: Frequently asked questions about Diem
Buy and sell Diem – Interesting facts about the new cryptocurrency Diem
Diem is a cryptocurrency created by Facebook - so it is connected to Facebook as well as to WhatsApp. This means it has access to billions of users around the world.
Diem will also be the first global cryptocurrency that can be sent via WhatsApp, which is a major plus. Additionally, the Diem represents an important currency without risk of devaluation. In the future, several global companies plan to facilitate the creation and use of Diem. As such, the Facebook cryptocurrency has a great deal of potential.
We examined when and where you can acquire the new cryptocurrency, where the differences lie between Diem and Bitcoin, and whether Diem is worth purchasing.
The Most Important Things You Should Know About Buying Diem Cryptocurrency
Diem was previously called Libra, and is also known as the Facebook cryptocurrency. Originally, Spotify, Uber, and Facebook were members of the Libra Association, which developed and launched Diem. It is anticipated that the cryptocurrency will be launched in 2021, and the currency will be available worldwide. The following information can be helpful if you are considering buying coins from Diem, formerly Libra:
- In contrast with well-known cryptocurrencies, Diem has been designed as a stablecoin without a fluctuating value.
- The design of the Diem was changed in 2020 to pegg to different currencies such as Diem-EUR, Diem-USD, Diem-GBP, etc.
- Diem will not be anonymous, as the worldwide resistance to classic cryptocurrencies has been taken into account in the development.
- After the launch of Diem, it will be offered for sale via the Facebook platform including WhatsApp.
- Alternatively, you can also process the purchase of Diem through trading platforms such as eToro.
What is Diem (formerly Libra)?
Market observers have already described Libra as a global currency, a global money, or a pseudo-Bitcoin. A large-scale adoption of cryptocurrencies around the world provided an additional impetus for launching a global coin like the Diem crypto.
Insiders had long speculated about a Facebook Coin. When Facebook decided to take this step, leading global brands such as PayPal, Uber, Spotify, eBay, MasterCard, and Visa were the first to be invited to participate in the project. Mastercard, Visa, and PayPal withdrew from the project because of regulatory concerns and objections, but others have continued to support it.
Diem is based on the technologies of blockchain that have led to the introduction of Bitcoin, Ethereum, BNB and many other cryptocurrencies. Diem is a stable coin with a reserve fund that is verified and audited unlike most other cryptocurrencies.
There are several factors that place Diem in a prime position to make a substantial impact on the global market. A great deal of attention was paid to the expectation that the Diem exchange rate would be devaluation-resistant. Should you be considering whether to purchase the Diem cryptocurrency, it is important to learn enough about the cryptocurrency and pay attention to all the details surrounding the purchase process.
Diem 2.0: a new concept
Although the Libra project has been criticized heavily, the decision to rebrand was a wise one. There was a significant threat to the stability of national currencies posed by Libra becoming an alternative currency.
As a result, rather than engendering resentment over such views, the Diem project chose to adopt a "basket of currencies" approach. The Diem will be paired with certain national currencies. Diem-USD, Diem-EUR, Diem-YEN, Diem-AUD, as well as a few others, will be offered.
Existing stablecoins pegged to national currencies are currently available in the cryptocurrency industry. Due to the involvement of funders in the Diem Association, Diem is expected to perform better than these alternative stablecoins. There is a great advantage to highlighting Facebook, Instagram, and WhatsApp's huge user bases around the globe. This high level of expectation drove the projections and likely led to many people purchasing Diem at launch.
How does Diem work?
Diem is based on the blockchain, just like other cryptocurrencies. As opposed to the constant fluctuations experienced by the major digital currencies, Diem is protected by a reserve fund. In order for new diems to be issued, a reserve fund must be established. In this case, additional diems are only created if new funds are aggregated for the new issue. Often, cryptocurrencies are criticised for being created out of thin air, but this will not be the case with Diem.
Most cryptocurrencies are created through the mining process. Diem, on the other hand, does not permit this, since coins can only be minted on the basis of a pool of funds provided by each case. Diem is controlled by the Diem Association and not by Facebook. The idea behind this is to separate control from the world's largest social media company.
Each founding member of Diem's leadership has one vote, as well. Each party involved, including Uber, Spotify, Coinbase, eBay, and the other parties involved, will only have one vote, so no one will be able to win a majority at any given time. Significant decisions are made by consensus.
In order to increase security and reliability, transactions are processed via a decentralized mechanism, as they are with other cryptocurrencies. As a result, Facebook's governance systems are separate from those of Novo Financial, the parent company of Diem. If you are surprised that your financial transaction is tied to your Facebook page, you should know that while the transaction will be on the blockchain, it will not be accessible to the general public.
Where to buy Diem?
To purchase Diem cryptocurrency, you should contact either a cryptocurrency exchange or a crypto broker.
How to buy diem
Estimated Total Time
What is necessary:
Tool: A cryptocurrency market.
Compare Cryptocurrency Markets
Sign up for an exchange that offers Diem in one or more cryptocurrency pairings. Compare exchanges when buying Diem to find the lowest fees and the latest exchange rates. Note: Some exchanges require your full name, contact information, and ID before allowing you to trade.
Create an account
You must verify your identity and email address before setting up an account with an exchange. Have your ID and phone handy.
You can buy Diem directly with dollars, euros, pounds or any other currency of your choice if your exchange supports Diem. Some exchanges charge commission fees based on the amount of Diem you purchase, so be aware of fees before you make a payment. Credit card payments are usually the most expensive method of payment.
Identify the currency you wish to trade on your chosen exchange. Go to the markets section. Click on the buy Diem section and enter the amount of the paired cryptocurrency you wish to spend or the amount of the Diem you wish to purchase. Note: Before completing the transaction, carefully review the transaction details, including the amount of Diem you purchased and the total cost of your trade.
If you are purchasing Diem from a cryptocurrency marketplace, you should see a price quote at the time of purchase to determine the expected value of Diem. Some marketplaces require you to register and verify your account before purchasing Diem. In order to purchase Diem, you may need to fund your account with fiat currency or another cryptocurrency. There are platforms that allow the purchase of Diem using fiat currencies, while others only allow the purchase of Diem using cryptocurrencies.
Moreover, in order to use a broker to purchase Diem, you are required to have a registered account as well as to have your identity verified. Following this, you can place your buy and sell orders for Diem. It is generally necessary to have an electronic wallet in order to store the cryptos, but many online brokers perform this task for you and keep your cryptos secure. Diems cannot be transferred to third parties unless the broker offers assistance.
You should follow the right procedure if you intend to buy Diem crypto after its market launch. It is particularly important to select a platform that is reputable and trustworthy. In an ideal world, you would already have a wallet in which you can store cryptocurrencies and your new Diem currency.
If you invest in Diem through a broker, you may not require a wallet since you are investing directly in the value of Diem. During the sale or withdrawal process, you may choose to receive proceeds in fiat currency or stablecoins.
There are other ways to purchase the Diem currency. A crypto CFD may be right for you if you value speed and ease of transaction. If you invest in a CFD, you will benefit from the underlying price of the asset or currency, such as Diem CFDs, Bitcoin CFDs, or Monero CFDs.
Because Diem is not expected to launch until 2021, you can own this stablecoin right now and contribute to its development. CFDs are usually sold on the official market as soon as the start date has been confirmed. It will then be possible to buy Diem CFD through certified online traders.
It has a strong reputation for buying and selling cryptocurrencies and offers excellent customer service. As the holder of a Diem CFD, you actually possess a derivative of the cryptocurrency along with its privileges. Our guide to CFDs explains how this works in more detail.
What is the Diem Wallet?
Novi was designed as a repository for Diem. In the previous plans for Libra, Calibra was envisioned as a storage app that hasn't been in progress since the launch of Novi. The wallet is not yet available for download, but should be available on the market at the same time as Diem.
A seamless integration of Facebook-related applications into the wallet can be ensured, and this could indicate that users of Facebook-related applications will be detectable on the blockchain. Diem may also be used with other storage wallets, but this has yet to be determined. On the project homepage, it is stated that sending money for both private and business users is as simple as sending messages via WhatsApp messenger.
Diem Course and History
- June 18, 2019
- Facebook announced its plans for the Libra project on June 18, 2019; the cryptocurrency industry has responded positively to this news.
- July 17, 2019
- Calibra CEO David Marcus will be interviewed by the U.S. Senate on July 17, 2019, about Facebook's plans for the design and launch of Libra. During the hearing, there was critical opposition.
- October 1, 2019
- Mastercard, PayPal, and VISA have announced their withdrawal from the Libra Association due to worldwide criticism of the project.
- October 9, 2019
- On October 9, 2019, OpenLibra will be presented at the Ethereum Devcon 5 conference. The idea was to serve as an open source project that is not dependent on the use of Facebook products.
- October 11, 2019
- Stripe, VISA and Ebay will exit the project on October 11, 2019.
- October 21, 2019
- The Libra Association confirms on October 21, 2019 that instead of a single stablecoin, national, currency-linked stablecoins will be issued for the project. Start date: June 2020.
- October 25, 2019
- tober 25, 2019, the Deutsche Bundesbank expresses criticism of cryptocurrencies and declares that stablecoins may not be allowed as an alternative to national currencies.
- November 11, 2019
- On November 11, 2019, Goethe University Frankfurt publishes a survey with respondents from the German financial sector, in which 58% of participants confirm that Libra will not be launched in 2020.
- February 23, 2020
- With the departure of PayPal and Vodafone from the Libra association, Shopify has joined the organization.
- April 16, 2020
- The new Diem whitepaper was released on April 16, 2020 with a new focus on national currency-specific stablecoins. The Libra ecosystem has now also been projected as a platform to support the central bank's digital currency.
- December 1, 2020
- The Libra project was renamed Diem on December 1, 2020. The launch is scheduled for 2021.
Diem price development in Q1 of 2022
On February 1, 2022, Facebook officially ended Project Diem. The reason for this is probably due to the criticism of politicians and financial regulators as well as the exit of many founding partners, including Visa, MasterCard, PayPal and eBay. A second reason might be the departure of David Marcus, who has been referred to as the father of the coin. Diem Association was dissolved, and the project was sold to Silvergate Capital, a holding company of Silvergate Bank, for USD 182 million. Rather, a senior regulator would have stated that this is the best-positioned stablecoin project presented to the US authorities, according to CEO Stuart Levey. The bank now plans to peg the coin to the dollar and introduce it at the end of 2022.
Diem Forecast: The Diem Future Prospects
Diem value appears to have a positive outlook when viewed through the lens of the many well-known companies and organizations that support it. Diem's design makes it comparable to USDC and USDT, which have performed well so far.
A recent economic downturn caused by the COVID-19 crisis has led to more money printing by central banks, resulting in an undervaluation of fiat currencies around the globe. Cryptocurrencies have increasingly become a safe haven for people worried about the loss of value. This is precisely why stablecoins are so valuable.
Additionally, central banks are concerned about losing control of economic indices, which leads them to occasionally turn against crypto currencies. There is a question as to whether Diem will be fought in some countries or recognized in others. There may be cause for concern here; however, it is also important to keep in mind that other cryptocurrencies thrive despite regulations - this could also be applicable to Diem.
The biggest Diem criticisms
Diem Krypto has been criticized primarily due to Facebook's massive stranglehold on social media at present. Facebook and its affiliates control a substantial portion of the world's data, according to regulators. If Diem were introduced, it would significantly increase the influence of one company.
- Market analysts believe that focusing forces on U.S. entities will be detrimental to the principle of fairness when Diem is implemented.
- Despite the existence of the Diem Association, there are concerns that without external regulators there will be no controls and cross-checks.
- As most Diem reserve funds are short-term in nature, there has been concern that a run could occur.
- In addition, regulators fear that if Diem is openly received and ignored, Facebook will overestimate its relevance.
- As stored reserves are denominated in fiat currencies, they are subject to exchange rate risk.
Diem vs. Bitcoin
Here are the pros and cons of Diem in comparison to the well-known cryptocurrency Bitcoin:
- The introduction of decentralisation gives it a good image on the marketplace
- Diem is designed to process far more transactions per second than Bitcoin
- with no controversy over its carbon footprint like bitcoin, which depends on fossil fuels
- The number of Bitcoin users is slowly rising; the participation of Facebook related companies in the Diem project which has billions of users globally could be an indication that the new currency has already reached its final phase of development
- With its stablecoin design, Diem is better suited for daily payments and transfers.
- Diem is not used for speculation and thus excludes speculative traders
- Diem could be subject to the same censorship associated with Bitcoin
- Regulatory scrutiny must be expected
- KYC (Know Your Customer) compliance may limit the participation of individuals who do not want to divulge so much information about themselves
Diem regulation and legal issues
Diem could become a shadow currency, which was the concern voiced in the European Parliament. Over time, this could mean a loss of relevance for monetary watchdogs since quantitative easing will no longer be an economic tool that they can use. Furthermore, Facebook could become its own central bank without any regulations controlling its operations or sphere of influence.
Diem is registered and established in Switzerland, where the Swiss Financial Supervisory Authority (SFSA) is responsible for the fine print since holders of the tokens are under its control. Additionally, the possibility of a monopoly position is taken into consideration, since Facebook is already a global giant through its control over Instagram and WhatsApp. Diem could be scrutinized by a number of institutions in this regard.
Advantages and disadvantages
In conclusion, we provide a summary of Diem's advantages and disadvantages:
- Diem could further deepen the decentralization of the financial sector, already being driven by major cryptocurrencies
- Diem's crypto reserves are invested in fixed-rate bonds to reduce liquidity risk
- By varying the share of a single fiat currency in the currency basket, exchange rate risk can be reduced
- for customers who do not use banks
- to conduct financial transactions
- Potential loss of sovereignty for people with Facebook accounts if their IDs are shared on Diem
- Too much global power concentrated in one entity
Tips for buying cryptocurrencies
Tip 1 : Research technologies and projects in the background before making a purchase
Tip 2 : Choose a suitable trading platform (exchange or broker)
Tip 3 : Do not invest more than you are ready to lose
Tip 4 : Remember: It is possible to lose everything or to win a great deal
Tip 5 : Do your own research instead of listening to the media
Tip 6 : Distribute: Do not place all your resources on a single coin or token
Tip 7 : Compare: Trading fees can significantly reduce profits
Tip 8 : Develop a trading strategy and stick to it
Tip 9 : Remain calm: price decreases are normal over the short run
Tip 10 : Do not share passwords or private keys with others
FAQ: Frequently asked questions about Diem
How can one invest in Diem?
Diem can be purchased through cryptocurrency exchanges or online brokers. While most brokers allow you to purchase CFDs, most marketplaces only allow you to purchase Diem Coins.
Can I buy Diem with a credit card?
Yes. It is expected that Diem will remain within the acceptable limits set by the trading platform when you purchase them. Bank transfers are the only method of payment for larger amounts.
Who is behind Diem?
The project has been supported by a large number of individuals. These include, among others, Facebook, Spotify, Uber, Lyft and Blockchain Capital.
Is Diem approved by regulators?
Diem is a Swiss company registered with the Swiss financial regulator. As it is not a security, it is also not regulated by the US Securities and Exchange Commission.