Differences Between Diem and Bitcoin
October 13, 2021 (Investorideas.com Newswire) Bitcoin is a type of virtual currency that is used to buy products and services. Although Bitcoin has been active in recent years, it has always been at fault due to its extreme volatility in value. Several countries and businesses do not recognize Bitcoin as a legitimate financial transaction. This repeated criticism spurred the creation of Stablecoins.
Stablecoins are a type of cryptocurrency, the value of which remains steady over time. Their value is linked to the real-world asset value of fiat currency, crypto assets, commodity, and seigniorage smart contracts.
In recent times, other digital currency products like Diem took center stage and are awaiting full launch. The Diem is a Stablecoin tied to the US Dollar. The value of the Diem dollar will not fluctuate like Bitcoin. Moreover, it will only ride on the dollar's value.
To gain more insight into the discussion between Diem and Bitcoin, here are six differences between the two cryptocurrencies.
In 2009, the mining of the first-ever Bitcoin came about. Generally, the main feature of Bitcoin is its ability to harbor buying, selling, and trading across individuals worldwide in a secured and confidential manner.
In 2019, Facebook gave birth to the Diem as the Libra cryptocurrency. However, Facebook diverted management and regulation to Diem Association, similar to its new name - Diem. The company's first digital currency project will be launching in 2021.
The glaring difference between the two is the scope of centralization. Bitcoin is fully decentralized running on blockchain technology. It has multiple networks globally and functions on an unregulated network. In this way, various parties with knowledge and technical know-how can mine. It has been a crucial issue with Bitcoin as transaction validation takes time.
Similarly, Diem functions on blockchain technology. However, it operates using a permissioned network. It is a centralized platform regulated by the Diem Association. With Diem backed by big wigs in tech and finance, it assures fast and scalable transactions governed by an authorized entity.
Foundation of value
Bitcoin's value relies on economic scarcity. Its value depends on the supply of coins created at the time of its introduction. Therefore, the price of Bitcoin will depend on its demand following a non-conventional financial system. On the other hand, Diem's value foundation is on fiat currencies.
Currently, there is no available data for Diem. However, it is poised to be the preferred digital currency for trading and buying on Facebook, Whatsapp, and their affiliates. Ultimately, the Diem Association will govern the use of Diem, which is not the case in Bitcoin. In Bitcoin, exchanges are carried out directly to trading websites. As a result, Bitcoin is available and accessible to anyone, and it does not rely on any particular organization or platform. In this regard, Bitcoin may be at risk for potential malware or purchases on the dark web.
The lack of a formidable governing authority and regulating body makes scalability impossible for Bitcoin. Presently, Bitcoin can only support the processing of a few hundred thousand transactions daily. However, the Diem can provide an advantage in terms of scalability with its solid governing infrastructure.
Privacy and trust
Bitcoin has been widespread and regarded for its anonymity. On the other hand, Facebook has been accused several times of privacy and security violations.
Ultimately, Diem holds a lot of advantages over Bitcoin. But, on the other hand, it is not yet up and running and has received criticisms due to its regulatory setbacks. However, it shows a lot of promise and optimism. So shall we be the judge of it in the end -- Bitcoin or Diem?
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