New Kid on the Block(chain): NEM
Disclaimer: This article is for educational purposes only and does not provide financial advice. The reader is aware that there are special risks involved in dealing with blockchain and cryptocurrency assets.
Recent media coverage about cryptocurrencies picked up on the fact that there are many more currencies than just Bitcoin. But only a few blockchains are known to the general public. The reports about asymmetric winnings made by early adopters who trusted a technology in a very early stage are spectacular. Early investors in Ether made winnings of 3000% and more — who does not want the chance for a payday like that?
Who’s not inclined to think: “if only I knew about that earlier!”? What most of those articles about cryptocurrency wonders won’t tell you is how immense the risks are early adopters took. Asymmetric investments have two sides to them: you can win big or lose it all. So instead of swearing about not jumping on the bandwagon at the right time, you should ask yourself: “Was I willing to lose it all?”
Being an early adopter of a cryptocurrency can feel pretty much the same as buying a lottery ticket. But there are a few things you can do to focus on the right ones. In the series “New Kid on the Block(chain)” I will present cases of blockchain releases that are new or in a (early) stage of development. Some of them bring new features to the game and have potential to become the next big thing.
- NEM is an easy to use, community driven blockchain
- The corresponding currency mosaic is called XEM
- It uses a wallet called Nano Wallet with a built in multisignature, namespace and messaging feature
- Currently ranking nr. 7 blockchain according to coinmarketcap.com
NEM is not new but got a lot of attention recently due to their market cap and activity taking place on their blockchain. Currently NEM ranks 7. in market cap according to coinmarketcap.com
NEM is a community driven and developed blockchain:
“The idea of NEM started on the Bitcointalk.org forum where the initial plan was to improve Nxt. The concept of Nxt was more than currency and contains features as assets, smart contracts, a message system and a marketplace. A group of developers decided against forking Nxt in January 2014 and instead wrote a new codebase from scratch. At launch in early 2015, the team of NEM was reportedly large, over 15 developers and almost 30 marketers or translators. The project originally was named “New Economy Movement” but this term however was quickly deprecated (2015) and just NEM in short is used since then. From day one NEM was designed to scale, be secure, fast and easy to build on. The support of a standard API based on open standards simplifies the adoption for developers.” — https://en.wikipedia.org/wiki/NEM_(cryptocurrency
What makes NEM unique?
Proof of Importance
Bitcoin uses a Proof of Work concept that forces miners to have highly specified hardware to solve complex problems and thereby form blocks for the chain. In contrary to that NEM uses a Proof of Importance (POI) concept. Owners of 10K XEM and more are rated upon a set of criteria and receive an importance score. POI focuses on the importance of a user to the whole network thereby offering extrinsic motivation to be active on the blockchain (explained below under “Harvesting”).
Harvesting is the equivalent of mining in NEM. Users that have a balance of 10K XEM or above can activate “delegated harvesting” without having any hardware running. The longer a user keeps funds on his account the more of them get “vested”. When the threshold of 10K XEM vested is reached one can activate delegated harvesting (for a small fee). The user does the harvesting without running any hardware or active engagement and still earns fees spent within the blocks that are created!
If someone wants to contribute even more to the network user are eligible to run nodes. That requires a balance of 3m XEM and up and hardware has to be allocated. Nodes earn transaction fees that were spent within the block they form.
Instead of the not very user-friendly gibberish addresses like NBYJMN-SR63NW-7GX5HF-AXUY5D-5LAWW7-JPA72U-I4TF users will be able to send XEM to namespaces that are more or less the same as web-domains. This will be a great plus for NEM in the future.
- NEM will release a major update called “Catapult” (Link to whitepaper) in the near future. It will improve the core concepts and change the development language to C++ (original version was written in Java) that allows for more options.
- A stand-alone desktop wallet is being developed at the moment. This is a big plus for usability as so far users had to understand how to open the wallet within the right browsers and were sometimes confused by that.
- NEM will probably gain popularity around the world as their marketing is widening its focus. The NEM.io foundation just released their $40m global expansion plan (CoinJournal Link)
- ICOs based in NEM are taking place.
How and why get involved?
As mentioned above according to coinmarketcap.com (the go-to-place for all market info around cryptocurrencies) NEM is seventh highest ranking coin in the market right now.
The community driven developers have high interest to promote the blockchain to be used by private users as well as professional ones. The design and functionalities of the blockchain makes it very comfortable for transactions small to big.
Built in multisignature accounts are a big plus too. On the Ethereum blockchain a smart contract would make the same thing possible whereas the NEM-blockchain offers this as a built in feature.
The fees for transactions are being drastically reduced at the moment. This makes XEM very attractive for micro-transactions.
Thank you for reading — if you liked what you read, feel free to share, like and comment. Also feel free to suggest any improvements and corrections to the article in the comments below!
For extra “thank yous” here are my donation addresses:
- XEM: NDYKAE-YR3YCV-NOO36B-KSH5OC-N6KFV2-CLABPX-LBS6
- ETH: 0x762bd7dcd23aec62d1a5bd3e3b2b57bb1b64026d
- BTC: 1HbAzWXZk511UbZkbTJQMdBt9pj8995p2