Somewhere in November 2020, Facebook announced preparations for launching its own digital currency. At that time, it was known as Libra. Within the gap of one month, the Libra project went through a slight makeover in its name. Now, it was termed as Diem. The move was basically focused on achieving independence from the shadow of Facebook.
The possibility of Facebook’s intervention in the working of Libra served as one of the prolific reasons for this initiative. Irrespective of the conflicts in the initial stages of the Libra project, the interest in finding out about the Diem transfer process has increased profoundly. The following discussion dives into a detailed overview of the essentials in a Diem transaction along with step-by-step instructions on carrying out Diem transfer.
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What is Diem?
Facebook had introduced Libra as a cryptocurrency that everyone could use online or offline, just like the dollar. The main aim of the project was to simplify the digital transfer of money, with companies like Facebook having privileges for offering financial services in the Libra ecosystem. Facebook has planned for a digital wallet known as Calibra, which would offer the services to users. In the event of Libra’s makeover, the wallet app has also gone through a name change and is now known as Novi. Without diving further into the timeline of Diem, let us take a look at the basic concepts you need for Diem payment.
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Basic Concepts of Diem Transfer
Whenever you want to carry out a transaction on the Diem blockchain, you need to know some important fundamentals. The two most crucial concepts at the core of blockchain include states and transactions. The transactions are actually the exchange of information and Diem coins among two accounts on the Diem blockchain. Another important fundamental concept for a Diem transfer guide refers to states.
States basically point out the state of the ledger, which is actually a current snapshot of blockchain data. The blockchain would mandatorily have a ledger state at any particular instance of time. The state of the Diem blockchain goes through changes upon the execution of submitted transactions. Here is a comprehensive overview of the essential concepts you will find related to transactions and the ledger state.
The Diem transfer process would qualify as a transaction. When you are submitting a request for a transfer, you are requesting to update the ledger state with your transaction information. Signed transactions on the Diem blockchain would feature the following traits.
The sender must use a digital signature to verify that they have signed the transaction.
The transaction must also have the Sender’s Address, which is the account address of the sender.
A Sender Public Key works as the public authentication key related to the private authentication key required for signing transactions.
Program is also an important component of the Diem payment process and includes the following features,
- Move bytecode transaction script, which is an arbitrary program for encoding transaction logic and interacting with resources in the distributed database of Diem blockchain. The Move programming language offers a next-generation secure, formally verified, and sandboxed environment.
- An optional list of Move bytecode modules slated for publication.
- An optional list of script inputs containing the recipient’s information and the amount transferred to them.
Another important aspect you would come across when finding out how to make a Diem transfer is Gas Price. It basically points out the amount that a sender agrees to pay per Gas unit for executing transactions. Users can pay for storage and computation with Gas. The Gas unit provides an abstract measure of computation without any inherent real-world value.
You must also note the Gas Currency Code, which is actually the currency code you can use for Gas payments.
Transactions on Diem blockchain are also associated with a Maximum Gas Amount, which is the maximum number of gas units allowed for a particular transaction.
The Expiration Time of a transaction on the Diem blockchain refers to the time after which the transaction loses its validity.
The Diem transfer process would also involve a Sequence Number, which is an unsigned integer equal to the account sequence number of the sender account when the execution takes place.
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The ledger state is another important concept you need in a Diem transfer guide. The ledger state of the Diem blockchain, or the global state, includes the states of each account on the blockchain. All the validator nodes in the blockchain should be aware of the global state of the most recent version of a distributed database of the Diem blockchain for executing a specific transaction.
The data relating to transactions on the Diem blockchain goes on a single-versioned distributed database. The unsigned 64-bit integer relevant to the count of transactions executed by the system serves as the version number. The versioned database is useful for enabling validator nodes to ensure the execution of a transaction with respect to the ledger state in its recent version. The versioned database would also enable validator nodes with capabilities for responding to client queries regarding ledger history at the existing and previous versions.
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Lifecycle of Diem Transaction
It is crucial to understand the different stages in the lifecycle of a Diem transfer process. The overview of each stage in the Diem transfer lifecycle could help in understanding the different underlying components and interactions. Here are the five important stages in the lifecycle of a Diem transaction.
- Accepting the transaction
- Sharing of the transaction with other validator nodes
- Proposing the block
- Execution of the block and achieving consensus
- Committing to the block
Let us discover what goes on in each stage to learn more about how to make a Diem transfer.
Accepting the Transaction
The transaction starts with the client’s submission to the JSON-RPC service found in a Diem FullNode. FullNodes leverage JSON-RPC service for moving the transaction to their own mempools, followed by forwarding the transaction to upstream mempool services operating on the validator FullNodes. The JSON-RPC service of the FullNode then ensures transmission of the transaction to the validator’s mempool. Subsequently, the mempool utilizes a virtual machine component for addressing validation checks.
Sharing Transaction with Other Validator Nodes
The second stage in a Diem payment would start with the mempool holding the transaction as an in-memory buffer. Then, the validator node would share the transaction in its mempool with the other validator nodes alongside placing the transactions from them in its own mempool.
Proposal for the Block
Diem transfer process would then have to provide a proposal for a block. The validator node serves as a leader for the transaction. The leader would pull a block of transactions from its mempool and then ensure replication of the block as a proposal for other validator nodes through its consensus component. Subsequently, the consensus component of the validator should also ensure coordination of agreement between all validators regarding the order of transactions.
Execution of the Block and Consensus
The longest stage you would find in a Diem transfer guide must obviously refer to the execution of the block. The execution process starts with sharing a block of transactions with the execution component. Then, the execution component takes over the management of executing transactions in the VM. Following the execution of transactions in the block, the execution component adds the transactions in the block. Finally, the consensus leader aims to achieve consensus with other validator nodes regarding the results of the proposed block’s execution.
Committing the Block
The final stage in the process of making a Diem transfer would refer to committing the block. The execution component of the validator reads the complete result of the execution of the proposed block. It obtains the result from the speculative execution cache. Subsequently, the execution component commits the transactions in the proposed block to persistent storage with related results.
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Steps for Transferring Diem
With the technological underpinnings for a Diem payment, it is definitely reasonable to find out simple ways to make a payment. Interestingly, you could just use your digital wallet for transferring Diem to another individual’s digital wallet. Here are the important steps you must follow for making a Diem transfer.
Access the Digital Wallet
The first step in the process of Diem transfer focuses on accessing your digital wallet. Interestingly, transferring money in Diem offers the benefits of cost as well as speed. The most common suggestion for transferring payments in Diem points out to the Novi wallet app. On the other hand, you could also depend on other methods for sending Diem Dollars.
The website of Novi indicates that users could transfer Diem by using Facebook’s messaging apps or other digital wallets for holding Diem coins. After setting up your digital wallet, you can just open the application on your PC, laptop, or smartphone and get started with the Diem transfer process.
Choose the Transfer Option
Upon opening the digital wallet, you have to look for the ‘Transfer’ button. Once you find it, click on it according to the platform on which you are using the application (mobile/desktop).
Enter Details of Amount to Transfer
The third step in how to make a Diem transfer involves providing details about the amount of money to transfer. You should note that the value of Diem is similar to that of the US Dollar. So, you could always redeem the price of a single Diem Dollar at par with the US Dollar. Users would find a feature in digital wallets for reviewing the exchange value of the amount before verifying the transfer. This is where you should note that the final amount will not be the same as the amount of Diem you want to send.
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Provide the Diem Address of the Receiver
If you want to send Diem currency to someone, then you would obviously need their Diem address. The Diem address is generally an elongated series of letters and numbers which identify the receiver in the Diem network. You can also search for the receiver’s address for a Diem payment through a unique method. Just enter the name of the receiver and then the ‘@’ symbol followed by the name of the wallet they are using. The Diem address of a receiver might look like “5c82adrc7acf0bac9421aca55”.
Send the Diem
After entering details of the amount you want to send along with the receiver’s Diem address, you can complete the Diem transfer process. Click on the ‘Pay’ or ‘Send’ button. You could also review the transfer fees for the transaction in this stage and decide whether to approve or reject.
Review Details of the Transaction
Upon completing the previous step of the Diem transfer, you could be sure of the transfer reaching the receiver. However, you could also choose to review the details of the transaction in the digital wallet app used for transactions. On the other hand, you could also use a Diem Explorer for reviewing details of a transaction on the Diem network.
When you have completed all these steps, you can complete a Diem transfer process easier. What did you observe in the step-by-step process of Diem transfer? First of all, it is clear that making payments in Diem is just like making payments with other digital currency. Most important of all, the simplicity of the process ensures that users could get through the process easily. As a result, the transfer process takes less time to complete. At the same time, users could also leverage their digital wallet apps or the Diem network itself for monitoring details of the transaction.
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The massive value benefits of blockchain have continued to transform various professional sectors all over the world. With detailed guidance on how to make a Diem transfer, you can dive into the world of digital currencies from a revised perspective. The arrival of Diem is definitely a challenge for existing financial services institutions while creating notable regulatory concerns.
At the same time, the assurance of Diem serving as a stablecoin is a prolific advantage for users. Furthermore, the technical foundation of a Diem transfer also helps users in understanding how it works. If you want to learn more about making Diem payments, then you should start learning more about Diem transactions.
*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. Do your own research!