As the clock is ticking and after the Novi launch in the US and Guatemala, Diem (formerly Libra) is getting into the limelight. With all this attention, many people have been asking one simple question — Can I mine Diem?
I understand the confusion, as Diem is a cryptocurrency, and most of them (such as Bitcoin and Ethereum) can be mined.
But where do we stand when it comes to Diem? Let’s cut to the chase and see whether you can mine Diem or not?
Can I mine Diem?
No, you can not mine Diem because it’s not like any of the regular cryptocurrencies; instead, it is a stablecoin that’s backed by USD.
But then the question comes — why can’t you mine Diem as the rest of the cryptocurrencies, which can be mined like doodling, right?
Why can’t you mine Diem?
To understand why you can’t mine Diem, you have to understand how mining works!
Other cryptocurrencies use a distributed ledger called blockchain that verifies all the transactions, and miners are the nodes that help verify the those (and get a reward in return).
In the case of Diem, it is not a regular blockchain. Instead, Diem runs on a permissioned blockchain by the Diem Association. In simple words, this means that only authorized entities such as wallets and exchanges are allowed access through Diem’s blockchain.
This means there is no need for miners to verify the transactions, and it can prevent scams by closely working with local authorities if needed.
Diem is different from the rest of the cryptocurrencies, such as Bitcoin. You can learn about all the major key differences between Diem and Bitcoin. But Diem doesn’t require miners, and there is no way anyone can mine it.
So, it is better to wait and keep it as an option for transactions and investments.