NEM Coin (XEM) - All You Need to Know
In this article
What is NEM Coin?
NEM coin (XEM) is the cryptocurrency that powers the New Economy Movement (NEM) blockchain. Like Ethereum, NEM aims to take blockchain beyond just payments (Bitcoin) and apply it to use cases like ICOs (initial coin offerings - when projects sell tokens to investors in order to fund project development), loyalty reward points programs, shipping tracking, anti-counterfeiting, and encrypted messaging.
Although NEM is open to all, it targets business use cases. In this way, NEM coin is similar to Ontology coin, though the latter focuses more on the Chinese market.
The NEM project launched in early 2015 as a fork of NXT, one of the early smart contract platforms that gave rise to projects like NEM, Ethereum, EOS, and Tron. However, the NEM team soon decided to discard the NXT code and built their own NEM blockchain to make it scalable.
Launched in March 2015, NEM is one of the oldest smart contract platforms still around. For comparison, Ethereum, the most popular smart contract platform, launched in summer 2015. Image credit: NEM
“New Economy Movement” (NEM) was originally an NXT fork, launched in the summer of 2014 before the stable platform release at the end of the 1st quarter of 2015, before becoming a completely new codebase, following the eventual dismissal of the NXT fork.
NEM Coin Review
Why NEM Coin
Perhaps it was due to NEM's early mover advantage, but from the end of November 2015 to early January 2018, the price of a single XEM went from $0.0001 (1/100th of a penny) to $1.84. In other words, a 1,840,000% increase! A mere $100 investment would have turned into $1.84 million.
Although NEM has lost market share to competitors like Ethereum, it still has a number of advantages over other systems:
100s of transactions per second (1000s of transactions per second in tests of their upcoming Catapult upgrade)
One of the things holding businesses back from using blockchain networks is their inability to handle many transactions at once. For businesses that have tons of transactions happening 24/7, something like Ethereum, which handles around 15 transactions per second (TPS), is simply unacceptable. Although NEM's upcoming Catapult system upgrade hasn't been released yet, if it's able to handle 1000s of TPS like it has in private testing, it should definitely bode well for the network's appeal as an enterprise blockchain.
- Addresses (e.g. user accounts, land deeds, notarized documents)
- Mosaics (e.g. crypto assets, reward points, shares of stock)
- Namespaces (easy to read names for your blockchain assets)
- Transactions (e.g. multi-signature transactions that require more than one signature)
By mixing and matching these modules, developers can create their own decentralized Smart Assets.
Along with multi-language API support and customizable smart contract modules, another security benefit of NEM is that it has a private blockchain option for situations where businesses don't want sensitive commercial data to be readable on a public blockchain.
NEM Coin (XEM) claims to drastically reduce development time and cost. Image credit: NEM
NEM Coin Mining
- Doesn't require specialized hardware (which has become the case with networks like Bitcoin)
- Environmentally friendly (as opposed to proof-of-work mining in the case of Bitcoin, which uses more electricity than some small countries)
- You don't have to leave your computer on to harvest (whereas you do for proof-of-work and proof-of-stake mining)
- Using the blockchain increases your chances of successfully harvesting a new NEM block, or group of NEM transactions (as opposed to proof-of-stake where stakers have no real incentive to use the network other than for receiving staking rewards)
With regards to having a higher chance of harvesting a new NEM block - and being rewarded in NEM transaction fees for doing so - NEM achieves this through what it calls "Proof of Importance" (POI). NEM assigns harvesters a POI score based on 3 factors:
- Vested coins - POI only counts coins that have been in a harvester's account for a set number of days. Moreover, 10% of a harvester's NEM vests each day. The more vested coins you have, the higher your POI score. You also need at least 10,000 vested XEM to start harvesting.
- Transaction partners - the more you transact with other NEM users, the higher your POI score. However, NEM uses an algorithm to make sure users don't game the system by trading back and forth between a few accounts and only counts net transfers over time.
- Number and size of transactions over the last 30 days - The bigger and more frequent your transactions are above a minimum size, the higher your POI score.
NEM's POI mechanism is perhaps one of its most innovative features. Image credit: NEM
Another interesting feature of NEM's mining process is delegated harvesting. Similar to mining pools for cryptocurrencies like Bitcoin and Ethereum, delegated harvesting allows users to pool their harvesting power so they can earn harvesting rewards.
In delegated harvesting, you assign your POI score to another account, who harvests on your behalf. Thanks to the pooling of POI score or harvesting power, the account you delegate to has a higher chance of harvesting new blocks, with the rewards being split among the delegator(s).
This delegated harvesting system allows you to harvest without leaving your own computer on, which could lower the barrier to entry for harvesting since not everyone can or wants to leave their computer on 24/7.
How to Mine NEM
If you want to mine (harvest) XEM, you have the option of doing it yourself (local harvesting) or by delegating the work to someone else (delegated harvesting).
For local harvesting, just download NEM's NanoWallet and click "Start local harvesting".
For delegated harvesting, click "Activate delegated harvesting" and enter your wallet password. For NEM's official tutorial with screenshots, check out this link.
NEM Coin Running out of Money
In early 2019, the NEM Foundation, which is community-funded, announced that it would layoff many of its members and make other large budget cuts in order to save the organization.
Alexandra Tinsman, who took over leading the foundation in January 2019, revealed that the NEM Foundation had only a month's worth of funds due to mismanagement by previous leadership. The foundation had previously spent a staggering 80 million XEM on marketing when NEM's upcoming Catapult release wasn't even ready.
Luckily, NEM still has reserve funds that the community can vote to unlock in order to provide additional funding for the NEM Foundation. This and more responsible leadership by Alexandra Tinsman in the form of budget changes, organizational changes, increased transparency of budget usage, and monetization via channels like business training and affiliate marketing (getting paid for referrals) should be able to reverse some of the damage done by previous NEM Foundation leadership.
Where to Buy NEM Coin
If you're a believer in NEM as an early and innovative smart contract platform, you can buy some XEM in various places.
NEM coin exchange: If you already have crypto
If you already have crypto, you can use the Exodus crypto wallet, which has an in-app exchange feature, to exchange cryptocurrencies like Bitcoin and Ethereum for XEM.
If you don't know how to do that, see our guide on how to exchange in Exodus.
NEM coin exchange: If you don’t have crypto
If you don’t have crypto, you can use centralized exchanges like Coinbase, Kraken, Gemini, and Bitstamp to purchase crypto assets with your local government-owned currency like dollars or euros. On some exchanges, you can buy XEM directly with government-owned currencies. Otherwise, you might have to buy popular cryptos like Bitcoin and Ethereum first before exchanging for XEM in Exodus or on centralized exchanges.
How to Buy NEM
If you buy NEM through the Exodus exchange feature, our guide will tell you how to buy NEM using your Exodus wallet step by step.
NEM Coin Wallet (How to Safeguard my NEM Coin)
Of course, once you buy your XEM, you might be excited, with the NEM project being as innovative as it is. Nevertheless, you should definitely make sure to choose a secure wallet to store your NEM coins. You don't want to end up like Japanese centralized exchange Coincheck's users.
Users who stored their NEM on Coincheck lost over $500 million worth of XEM cryptocurrency.
Remember that $100 that would have turned into $1.84 million? Unfortunately, those kinds of investment gains can disappear overnight if you entrust your hard-earned crypto assets to others who don't care as much about your funds as you do.
Therefore, you should definitely use a wallet where you control your private keys. If you just want a wallet for NEM, the aforementioned NEM NanoWallet is a good option. If you want a wallet that supports 100+ other cryptos and has a built-in exchange app for exchanging between XEM and other crypto assets, Exodus is for you.
The Exodus desktop wallet
NEM Coin Market Cap
The current market capitalization of NEM (XEM in circulation multiplied by the XEM price) is roughly $320 million, placing NEM in the top 30 crypto assets by market cap.
Looking to stay up to date with the latest NEM news like Catapult? Check out NEMflash for all NEM-related news.
If you want a place to discuss NEM, the NEM subreddit ( r/nem) has 18.2k members.