Wondering what could be the possible use cases of Facebook Diem? Here’re the top 10 Facebook Diem use cases!
Facebook has been the favorite social media platform for billions of users all over the world. In many countries, Facebook is perceived as the ‘internet’ itself. It is a place where users can connect with people, make friends, sell and buy products, and promote their business. Over time, Facebook has emerged as the most easily accessible platform for social networking with a completely unique internal ecosystem.
Most recently, Facebook has announced the revamping of its cryptocurrency offering, Libra. Now, it will be known as Facebook Diem, and people are quite interested in finding more about Diem use cases. The following discussion dives into a detailed explanation of ten different use cases of Diem cryptocurrency. Therefore, it can help in reflecting on its potential for future growth.
Before diving into a discussion about Diem or Libra use cases, it is important to discover their fundamental principles. The principles can showcase how Diem is suitable for the objectives of businesses in different sectors. Basically, the Diem cryptocurrency wants to achieve a simple global payment system empowered by a financial infrastructure. It should be capable of serving billions of people.
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Important Factors that Drive the Uses of Diem
Facebook announced the launch of Libra for offering people the opportunity to buy things and send money to other people. Interestingly, people could achieve it with almost zero transaction fees. People could use the currency pseudonymously for buying or cashing out their Libra cash online. They could also use the cryptocurrency at local exchange points such as grocery stores.
The uses of Diem, or Libra as it was previously known, could enable people to make payments and spend currency. All of this is possible through interoperable third-party wallet apps. In addition, Facebook has also introduced its own wallet, Calibra, integrated across all its apps.
- Independent Governance
The interesting factor about Diem is the fact that Facebook doesn’t have complete control over Diem. On the contrary, it would have only one vote in the governance of Diem. Other founding members of the Diem Association, formerly known as the Libra Association, will also have a vote. Other notable members of the Diem Association include Uber, Andreessen Horowitz, and Uber, with each investing almost $10 million.
The Association would work on promoting the open-source Diem coin alongside offering a developer platform. Interestingly, the Diem cryptocurrency use cases can look at the better scope for flexibility with the use of Move programming language. Diem is also relying on customer discounts or incentives for promoting adoption. So, what are the potential areas which Diem can explore on grounds of its competitive advantage in the cryptocurrency market?
- Credibility of Diem
The most helpful factor that could drive the uses of Diem draws attention towards requirements for joining the Diem Association. The credibility added in the governance of Diem, along with better regulatory compliance, can ensure trustworthy environments for users. Here is an outline of some of the requirements for a business to become a member of the Diem Association.
- Half rack of server space is mandatory.
- The organization must have an internet connection ranging up to 100 Mbps or even more.
- The member should be equipped with enterprise-grade security alongside a site reliability engineer always available on the site.
- The organization trying to join Diem Association should also have the capability to reach more than 20 million people annually. The organization must also have recognition as a top industry leader by groups such as Interbrand Global or S&P.
- The member organization should also have almost $500 billion in customer balances. In addition, it must also hit two out of thresholds at a minimum of $1 billion USD market value.
The credibility of the Diem Association members is a profound reason to ensure that it is not just another cryptocurrency solution. The validity of Diem use cases is clearly evident in the Diem payment system. The Diem coin serves as the important part for serving as the currency on the Diem network alongside other single-currency stable coins. The assurance of stability for the value of Libra ensures that it is a suitable medium of exchange.
Furthermore, Diem also boasts of credibility through association with an assortment of short-term government securities alongside bank deposits related to conventionally stable international currencies such as pound, dollar, euro, Swiss franc, and yen. The Diem Association takes care of the collection of assets and could modify its composition if needed for addressing significant price fluctuations for any foreign currency in maintaining consistency of the value of Diem.
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List of Most Common Diem Use Cases
Based on the prominent factors that define the strength of Diem, formerly known as Libra, it is inevitable to consider its potential for influencing the future of the economy. Furthermore, it also presents viable prospects for adoption on the basis of its credibility and flexibility. The different use cases of Diem can provide a clear impression of the ways for approaching its applications differently. Here is an outline of the top ten Diem use cases that can help in understanding how Facebook’s new cryptocurrency can provide applications in different cases.
One of the foremost Diem cryptocurrency use cases refers to governance, which primarily arises from the governance structure of Diem. It is impossible to compromise the features and functionalities of Diem, thereby ensuring that it can help in serving the ideal monetary alternative for passing financial flow in governance.
Transactions in government agencies for different public welfare works along with a detailed overview of expenses and grants in the public domain can guarantee promising benefits for the general public. Since Facebook does not have sole control over Diem, it is impossible to manipulate the use of Diem against public interests.
According to the Diem Association, Diem or Libra use cases in expenses for governance offer the assurance for accountability and public inquiry. Therefore, it is reasonable to expect future applications of Diem as a preferred method for government agencies to establish credibility regarding their work.
2. Promoting Financial Inclusion
Cryptocurrency is gaining prominent popularity, and it has been appreciated in regions that are comparatively new to financial services. For example, a report by World Economic Forum indicates that almost 33% of Nigerians use or own cryptocurrency. At the same time, countries such as the Philippines and Vietnam are also carrying out transactions by leveraging cryptocurrencies rather than dealing with intermediaries such as banks for international transactions. The scope for Diem in these cases is the ability to leverage the social reach of Facebook.
The uses of Diem could help in resolving the concerns of depending on an intermediary while driving the progress of countries that still rely on cash. The limited access to financial services in developing nations could take a swift turn with the introduction of popular alternatives such as Diem. Interestingly, the faster expansion of mobile technology and high-speed internet connectivity could drive the uses cases of Diem for financial inclusion.
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3. Money Transfer Made Easier
The next important mention among the Diem cryptocurrency use cases refers to money transfers with the assurance of low cost. The most promising use case for cryptocurrency relies profoundly on receiving and sending payments at high speed and low cost. Recently, a transaction worth $99 million on the Litecoin platform took just two and a half minutes.
Most important of all, the transaction took only around $0.40 from the sender in terms of transaction fees. It is worthy to note that such a transaction would have required more fees if it had been carried out through a financial intermediary. In addition, financial intermediaries would have also presented the issue of long processes required for transactions. As a result, Diem could find promising use cases in the field of money transfer services, especially with low transaction fees and faster transaction speeds.
4. Alternative to Money Devoid of Censorship
The systems followed by conventional financial institutions such as banks and other agencies have become outdated. Moreover, they impose a considerable burden on the integrity of the financial assets of an individual. People have observed various examples of bank accounts and assets being frozen, particularly in jurisdictions that feature dubious rules of law.
As a matter of fact, there is nothing that you can do as a customer when you are accused of financial misconduct, or you made enemies in the wrong places. In such cases, people end up without any cash which can be quite troubling and unfair for people who are wrongly accused. At this point of time, it is reasonable to think of Diem or Libra use cases for removing wealth censorship.
Cryptocurrencies such as Diem could serve as an alternative store of wealth without any censorship. Only the owners of Diem cryptocurrency would have access to the coin with private keys as the only means for accessing them. Therefore, it is impossible to find an instance of any individual’s cryptocurrency wallet being frozen by authorities.
5. Private Transactions Can Become Commonplace
It is also essential to note that Diem use cases can also foster the adoption of private transactions. Anonymous financial transactions among different parties have been possible through the use of cryptocurrency. Diem could easily serve as a helpful instrument in different use cases in financial services involving the need for private transactions.
Therefore, it can help people make financial transactions to other people privately without having to explain their reasons to the bank. Furthermore, users could also have anonymity regarding the sources of funds or the person to who they are sending the money. As a result, the process of private financial transactions also becomes faster without the complicated bureaucratic processes.
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6. Travel and Tourism
The uses of Diem as a cryptocurrency can also help in achieving promising applications for travel and tourism as well. The profound growth of the cryptocurrency ecosystem in the course of the last nine years, along with increased scope for tourism, offers promising opportunities for the application of Diem.
The tourism industry is slowly opening up to the use of cryptocurrency for booking flights, hotels, and car rentals. In addition, the possibilities for introducing an ATM market for Diem could also help travelers exchange their cryptocurrency to local currency across major cities worldwide. The most important aspect that would drive the use of Diem in the travel and tourism industry is the flexibility and speed of international transactions.
7. Incentivizing Content
The use of cryptocurrency alternatives for providing incentives to create and post content is also another possible Diem use case. Facebook is a huge platform that runs on user-generated content. In the future, one could look at Diem as a promising source for incentivizing content creators. It can also offer the opportunity to provide incentives to tailor the content on the network through upvoting high-quality content. In addition, popular blogging and social media platforms can also use Diem for improving their content by empowering users.
8. Tokenization of Assets
There is no doubt that the Diem cryptocurrency use cases would reach out into the domain of asset tokenization. Cryptocurrency alternatives ensure the ease of tokenization for anything, including copyrights, art pieces, commodities, and real estate. By using blockchain, cryptocurrency can ensure that you could tokenize luxury real estate property amounting to almost $10 million. As a result, Diem could also serve important contribution in improving the liquidity of the assets.
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9. Purchasing Storage or Renting It Out
Centralized cloud storage platforms could present many setbacks. In such cases, it is possible to rely on the uses of Diem to avoid the issues of massive fees and server downtime. The facility of Diem as a vital ecosystem to rent out or purchase storage space can be easier. A decentralized storage platform could give support with the native cryptocurrency, Diem.
10. Lending and Borrowing Become Easier
As evident in all cryptocurrency use cases, Diem could also provide a vital tool for lending and borrowing. It does not require any lengthy paperwork for taking a loan and the digital process takes quite less time than expected. Decentralized finance is slowly changing the domain of lending and borrowing funds with the use of cryptocurrency. Furthermore, cryptocurrencies such as Diem can help in lending or borrowing from platforms irrespective of their location.
Also Read: Crypto vs CBDC
On a final note, it is important to conclude that Diem use cases would take on the conventional applications of cryptocurrency. More and more users are turning to Facebook in large numbers every day. So, a cryptocurrency with the backing of a social media giant, Facebook, and other big names in tech could definitely change the game.
The traits of Diem for offering privacy and transparency account as the formidable factors for its uniqueness. Users could carry out private transactions while also ensuring proper accountability and transparency for verification. Diem can change the conventional notions of cryptocurrency with an increased focus on regulatory compliance. So, there are more opportunities in Facebook Diem for everyone with these possible Diem use cases!
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