Not content with being “just another altcoin” NEM set out to develop a smarter and more technologically advanced blockchain.
Launched in March 2015, New Economy Movement (NEM) is a platform that brings new features to the blockchain system. Starting out as little more than a proof-of-concept, it’s been picked up by the commercial blockchain, Mijin, causing the value of the platform’s currency, XEM, to increase in value.
What is NEM?
|Icon||Symbol||Initial release date||Algorithm type||Max. supply|
|XEM||31 March 2015||N/A||8,999,999,999 XEM|
NEM started out as a fork of NXT, another open source cryptocurrency and payment network platform, but soon got its own codebase after the development team at NEM.io Foundation decided to rebuild the system from the ground up.
NEM.io Foundation is a non-profit organisation founded in Singapore, and is the driving force behind the development of the NEM platform.
When software developers work on open source projects, they upload their codebase online so that everyone working on the project can easily download, modify and update the code. A fork occurs when a group of developers decide they want to create a version of the code that’s based on the original source, but different. Maybe they want to add new features which are not aligned with the original project’s vision. Maybe they want to change existing features without disrupting the current project.
When we say “NEM started out as a fork of NXT”, it means that the developers of NEM made a copy of the open source code of NXT, then started changing that code to match their vision.
The beauty of open source code and projects is that not only is this allowed, but encouraged.
NEM brought a lot of upgrades to what currently exists in terms of blockchain technology, upgrades that we’ll look at in the next section. XEM, the primary coin used on the platform is not yet being used by merchants (as of September 2017). However, its value has grown considerably over the very short period the currency has been in operation, and speculators predict NEM’s usage will increase.
How is NEM different from bitcoin?
The NEM platform and its associated coin XEM set out to build a better blockchain, and here are two key strategies:
An alternative to mining, harvesting is a system designed by NEM to generate XEM, in order to help maintain the integrity of the NEM blockchain. Every time someone carries out a transaction, the first computer to see and verify the transaction will notify nearby users of that transaction, creating a cascade of information. This process is called “generating a block”. Whenever someone with more than 10,000 vested XEM generates a block in NEM, they receive the transaction fees on that block as payment.
All transactions on a blockchain are stored in files called “blocks” and each block can be considered a page containing a list of records, or transactions, similar to the way a ledger works.
Whenever a transaction occurs on a blockchain, miners (or harvesters, in the case of NEM) process the transaction and put it in a block. Sometimes, if it’s a new block for example, miners receive a bonus for doing the work.
Blocks are attached to the end of the blockchain (hence the name) and once attached and accepted by the network they can never be modified or removed.
Vesting XEM and proof of importance
Bitcoin and most other mining cryptocurrencies use a proof-of-work system: Your computer does the work for the blockchain and you get coins in return. When it comes to harvesting, NEM uses a proof-of-importance system instead.
Importance is a measure of how much you’re invested into the NEM system. The XEM assets in your wallet become “vested” after a set amount of time. Once you have 10,000 XEM vested you will be able to generate new blocks and earn the transaction fees for all transactions on that block.
XEM is vested at a rate of 10% of the non-vested XEM in your wallet, per day. As seen below, with 20,000 non-vested XEM in your wallet it will take 7 days to reach the minimum required of 10,000 vested XEM.
Where can I use NEM/XEM?
As the time of writing this in September 2017, NEM and its XEM coin are still very much in the early phases of the platform. While NEM has been adopted by Mijin, XEM is only currently being used to pay other members of NEM and to pay transaction fees on the NEM platform.
In order to buy in the NEM platform you'll need to buy some XEM. This currency saw growth during 2017, going from under US$0.03/XEM in mid April 2017 to ten times that value (over US$0.30/XEM) at the beginning of September, 2017.
That said, the price of XEM is still extremely volatile as users and speculators wait to see whether the NEM platform will get the widespread adoption by merchants that it needs.
Using NEM to transfer money
Transferring money using the NEM platform depends on the currency you’re transferring, since NEM is the blockchain technology not the currency itself.
NEM currently supports one wallet: the Nano wallet, available on the NEM official website.
Once installed, follow the instructions to send XEM to other users as you would any other currency:
- Enter the recipient's wallet address or scan the QR code provided by the recipient.
- Enter an amount of XEM to send the recipient.
- Enter your wallet’s password, and click “Send”.
The XEM amount will be sent to the recipient over the NEM network and will be received immediately.
How is it possible to make money with NEM
Get paid in XEM
Since XEM and NEM are still so young, the value is still relatively low and you might be able to get XEM at a good price. If, for example, you had been paid US$90 in XEM in April 2017, you would have been given 3,000 XEM. In September, those 3,000 XEM would amount to US$900 if sold. Getting paid in XEM could be a good step, not only for the future of the network but also to build your wallet’s value. If the value of the coin increases, so will the value of whatever amount of XEM you hold. Remember, though, that there's no guarantee that the coin will gain value.
As more users join the NEM network and start using XEM, another way to make some extra, free money is to begin harvesting. As explained above, harvesting allows you to earn small amounts of XEM for helping to maintain the system’s security and accountability. But to do this, you will need to have a minimum of 10,000 XEM vested. At the current value of the coin (September 2017), that’s US$3,000, so it’s no easy feat if you’re looking to simply purchase the coins from an exchange.
What’s next for NEM?
NEM is still fairly new, and any cryptocurrency so young will suffer from a great amount of risk, ups and downs. Not only that, but there is still no roadmap set in stone, so we’ll just have to wait and see.
Some speculators are calling NEM “the sleeping giant”. Built from scratch to avoid the same pitfalls as other bitcoin forks that become nothing more than “just another altcoin”, NEM’s future may have promise. Its value rose from the start and new projects are coming to the platform that make full use of its ability to trade not only currency, but also assets.
- Landstead. One of the most promising upcoming projects is Landstead, a land and property registration system running entirely on the NEM platform and infrastructure. This online application allows governments to generate and store citizenship data, register properties, assign property to citizens, and much more. The benefit, of course, is that it’s all on the NEM blockchain which means other users of the blockchain will automatically look at and verify each transaction made. It would be impossible for someone to assign themselves a new property by hacking the database because the hacker would need to “convince” at least 51% of the blockchain, instead of hacking and tampering with the data directly.
Frequently asked questions
Image sources: Shutterstock, CoinMarketCap