The Beginner’s guide to NEM

Project Reviews / 23.03.2020

New Economy movement or NEM, as it’s widely known, is a peer-to-peer blockchain platform for developers. Its native cryptocurrency is called XEM, and it has been split into two parts called the microXEM (the smallest unit) and milliXEM (the thousandth unit). One of this project’s inspiring features is that while other major altcoins had Bitcoin codebase as their substrate, they built every part of the blockchain from scratch in Java and JavaScript languages. The NEM Foundation plans to build a financial ecosystem that grants its members financial freedom, equality, and a decentralized platform void of any control from a central body like what we see in most of the major altcoins such as ETH, TRON, etc.

NEM in a Nutshell

  • Is a cryptocurrency mainly invested in by Japans.
  • Has two blockchain networks, a public one for the community, and a private one for the NEM Foundation.
  • Its currency is split into two parts: microXEM and milliXEM
  • It’s governed by a Proof-of-Importance consensus protocol, which was built from scratch.
  • XEM was never mined but rather distributed to its community members for their various hard efforts to commence the project.

What is NEM?

The cryptocurrency plans to incorporate all the best features of Bitcoin, Bitshares, Nxt, and its own features, most especially enforcing that the coin and blockchain are fully decentralized worldwide. An avid crypto enthusiast named UtopianFuture was inspired by some features of the cryptocurrencies mentioned above to announce this development on 21st January 2014.

Aside from the public blockchain, which is run by the entire community for transactions, the NEM Foundation also runs a private blockchain called Mijn, which is purposely dedicated to enhancing its performance and quality of activities. The consensus protocol used in building the NEM blockchain is called Proof of Importance, and XEM can’t be mined, unlike other altcoins. The total supply of the coin is 9 Billion, distributed according to a stake system announced during this project’s genesis.

A brief history of NEM

UtopianFuture had inspiration from the Nxt Platform to build a blockchain ecosystem that was fully decentralized and secured. This vision was brought in writing as he shared his idea in an announcement thread on Bitcointalk Forum in January 2014. The contributors at that time dismissed thoughts of forking from NXT to create a blockchain from scratch. To ensure a fully decentralized distribution of the XEM, an initial stake-based distribution system was used. The token NEMstake was first distributed among users who believed and supported the startup of this project through their writing, coding, graphic designs, and also donating funds in the form of Nxt and BTC for development. The NEMstake was shared among these users on the Bitcointalk forum. At that time, the team thought it wise to create a sustainability fund to ensure that the core team members don’t have a huge supply of the coins in their possession. Part of all unclaimed stakes was allocated to the sustainability fund to develop the project further when the need be.

On 15th March 2017, The NEM Foundation was founded in Singapore to bring onboard business corporations, governments, and other institutions to utilize the NEM blockchain and platform. The foundation exposes the use cases of the NEM blockchain to these entities to take advantage of the decentralized and secured platform of NEM to store large amounts of data. By building a business on the NEM platform, users are assured of a transparent system void of any fraudulent attacks.

How does NEM Work?

NEM operates on the Proof of Importance protocol, unique to itself, as no other cryptocurrency operates with this consensus protocol. This protocol was built from scratch in Java and JavaScript languages. Nodes are rewarded with XEM in a termed harvesting as they contribute to the network to secure and function. PoI is quite similar to Proof of Stake as users need collateral of 10,000 XEM in their wallets to perform functions for the blockchain network. A unique thing about the PoI is that the allocated 10,000 XEM has to be vested fully to provide security to the network and analyze transactions across the network. It takes an average of 10 days for all the 10K coins to be vested, as 10% of the coin is vested every day.

A node needs to have a good score of importance to harvest XEM. This score of importance is attributed to the combination of how long the node has stayed online, holding its coins in the wallet, and verifying transactions on the network. This goes a long way to prevent whales from just buying a huge number of coins into wallets and controlling the network to some extent since only holding the coins does not give you a high score of importance—the higher your score of importance, the higher the chances of harvesting rewards. Shortly, we might see some cryptocurrencies switching to the use of PoI as it is an improved version of PoS.

Which cryptocurrency wallet can you save NEM on?

The safety of your NEM Coins is of huge importance. Hence the Nano wallet is the ideal wallet to save your coins on, but crypto app developers have also made it possible to save your coins on hardware wallets such as Ledger, Trevor, Keepkey, etc. However, if you happen to download the Nano wallet, it’s essential to save the unique .wlt file since you will always need that to access the account. One unique security feature about the Nano wallet is that each log creates a new private key, making it extremely impossible for hackers to access your account secretly.

Where can you purchase NEM coins?

XEM can be purchased on most of the Exchanges across this industry. There are several market pairs, so you are at liberty to make the purchase with either Bitcoin or any other altcoin you choose. For those who might want to purchase with fiat, you would have to purchase using exchanges that have enabled fiat payment gateways, such as Binance.

How to own NEM

There are only two ways of owning XEM, which are: either purchasing them from exchanges or running a node where you help secure the blockchain network and also analyze transactions broadcast unto the network. Doing this generates some XEM as rewards, which has been explained vividly under the NEM network architecture.

How much is NEM worth?

XEM’s price at the time of writing is USD 0.037321, with a market cap of $304,451,744. The average daily 24-hour trading volume was about $23 million. The total supply of XEM Coins is 9 billion, with 8.9 billion in circulation. It recorded an all-time low of $0.000079 in September 2015 and recorded an all-time high of $2.09 on January 04, 2018.

The Benefits of Using NEM

Aside from using XEM as a payment method, its blockchain network allows developers to create their own cryptocurrencies. It can also be designed to automatically perform some accounting tasks and create a loyalty reward system. It’s a cryptocurrency that Japans highly invested in and has seen some all-time-high in the past. If PoI is ever adopted on a larger scale, XEM would be a good coin to invest in today.

Final Thoughts

NEM’s blockchain architecture, features, and design are likely to be utilized if we ever see blockchain technology’s global mass adoption. Businesses and Corporate institutions would find it very useful to adopt and deploy their services with it. You might want to take a critical look at it for the investors before making any concrete decision.

Holds a degree in BSc. Nursing from the University of Cape Coast, Ghana yet an addict to the blockchain technology and the cryptosphere. He combines the promotion of crypto projects and also the making of professional contents all to get innovative projects to the real world. He is a passionate Community manager and a Marketing Advisor for blockchain startups.