What Is NEM (XEM)? A Beginner’s Guide to a Harvested Crypto

NEM positions don’t just introduce themselves as another altcoin but instead a more innovative alternative to traditional asset management platforms. It provides higher transparency for users to access their assets at a lower cost. This technology has then branded as a — Smart Asset blockchain. 

As NEM continues to see growing interests due to its versatility, it was once the world’s 16th largest cryptocurrency by market capitalization. However, NEM took a significant hit that nearly broke with plans to lay off and pivot. But, what went down? 

Ultimately, this begs the question: What exactly is NEM, and how much XEM price movement can attribute to the legitimacy of market movement or is it just an internal struggle? So, what gives NEM?

All About NEM (XEM)

The NEM.io Foundation is a non-profit organization based in Singapore, announced the launch of NEM in March 2015 as a fork-out of the NXT, however disparate from NXT with its original code. The emergence of XEM (the native token of NEM), short for the “New Economy Movement,” is the result of the development of NEM’s unique codebase for advancing the project to make it more scalable. 

Like many other crypto projects, NEM has a road map for its future goals. But it is not simply a means of payment. The NEM team believes that they can tackle many other financial and business areas on top of just global finance. These include smart contracts, crowdfunding, supply chains, gaming data, and legal documents, among many others. And nevertheless, XEM grew significantly in value, with an all-time high of $2.09. 

How Does XEM Work?

The way that NEM (XEM) fulfills these goals is by combining several innovative technologies. The most important one is NEM’s novel Proof-of-Importance (PoI) consensus mechanism, introduced to the market by this adaptable blockchain.

In a number of ways, PoI varies from other consensus mechanisms, such as Bitcoin’s Proof-of-Work (PoW). The two main differences with PoI are in the time and money that users invest.

Understanding The PoI Algorithm

According to the PoI algorithm, a user with at least 10,000 XEM vested in the system will be qualified to generate new blocks in NEM’s blockchain. Whenever a user successfully generates a new block in the blockchain will be rewarded with the token and receive a portion of the transaction fees.

But that’s not all. In fact, PoI allows users to make transactions with other networks while receiving rewards. NEM will evaluate the total transaction amount and use them to boost the user’s PoI score. Ultimately, the higher your score, the better rewards you’ll receive. To increase your PoI score, all you need is to send more transactions to people.  

Customizing with Smart Assets

NEM’s “smart asset” innovation allows users to tailor how they access and utilize the NEM platform. All of the functions are performed in an open, self-scaling architecture. It is meant for developers to create, distribute and exchange cryptocurrencies quickly. Individuals are also able to transfer money through its public blockchain interface.

Harvesting vs. Mining

Harvesting is a critical component of the PoI consensus mechanism. This code connects your account to a supernode that already exists. The backbone of NEM’s ecosystem is formed out of its supernodes, which can use linked accounts to boost their PoI score and raise the likelihood of block creation in their favor. 

To put it simply, supernodes take an account’s PoI score and use it to execute blocks on its behalf. This method is beneficial because it allows the NEM blockchain to stay safe without demanding enormous amounts of processing power from all users. As a result, NEM and PoI use significantly less energy than a PoW system like Bitcoin’s.

For companies that put a lot of effort into their sustainability plans, these power cuts are a major plus. This gives NEM a substantial competitive advantage. In order to host the harvesting process, NEM nodes don’t need to have their computer or mining equipment operating. Harvesting also democratizes the blockchain business by eliminating the need for expensive mining machines. Let’s take a look at some advantages of harvesting over mining.

Increased Productivity

One of the biggest advantages of NEM’s platform is higher productivity and, hence, efficiency levels. First, the EigenTrust++ algorithm is integrated into NEM’s blockchain to sustain the PoI reputational design. This protocol can precisely monitor network nodes to guarantee those specifically high-quality contributors are included throughout the consensus mechanism. Deadweights within the network, such as non-contributing nodes, are automatically removed by the system.

The system contains a security clustering algorithm that analyzes past node behavior, allowing nodes in clusters to lend reputation points to their neighbors. When compared to generation one and two blockchains, this method keeps NEM efficient and small.

Transactions with Multiple Signatures

For corporate clients, multi-signature transactions are a major plus. Administrators at these companies must be able to monitor and grow the network to meet all of the firm’s demands. Companies may use NEM to manage account activity, control assets like XEM from one account, construct new mosaics, and — ultimately — generate new tokens.

All of the multi-signature smart contracts are securely stored directly on NEM’s blockchain. This maintains the company’s dedication to security. The majority of the present market competition does this work through third-party off-chain solutions. The NEM blockchain’s multi-signature capabilities directly raise the bar in terms of competition in the blockchain community.

Blockchain Domain Names

The idea of Namespaces first came to the blockchain world via NEM. On the internet, namespaces are similar to what are known as “domain names.” On the NEM blockchain, you may establish and control your own unique domain name. Users can run a domain name three tiers deep, which is not very common. This method gives both users and companies more flexibility and adaptability.

The History of XEM

NEM’s lifespan dates back to 2014–15. The entire NEM concept started when UtopianFuture, a Bitcointalk forum user, stated that the cryptocurrency NXT had motivated him to create a new initiative. NEM, a forked version of NXT, began operating in March of 2015. It didn’t take long for developers to decide to rebuild NEM from the ground up.

NEM got its own codebase toward the end of the year. As a result of NEM’s enhancements, the platform is now more scalable and thus speedier than the original NXT. The project rose to popularity, and in 2016 the NEM foundation joined the market. This non-profit focuses on collaborations, growth, marketing, and brand awareness as its key approaches toward accelerating the adoption of NEM.

As mentioned above, the NEM blockchain’s native token is XEM. In its ecosystem, XEM plays many more roles than that of a simple currency. XEM can be used to earn voting and approval powers. NEM is also used as a coin with extremely rapid transaction speeds. Up until now, though, XEM’s primary goal has been to make smart contracts easier to use.

Until March 2017, when it gained market momentum and surged, NEM was a sleeping monster. Its price had been trading for less than $0.01 up to that point. NEM’s price rose to a bit more than $0.03 per token during its early bull runs. While most investors expected a large pullback following such highs, the massive late-2017 bull market ignited another bull run for NEM, driving its price above $2, the highest price at which NEM has ever been traded.

With a market value of $1.7 billion and a price of $0.19, NEM now ranks 64th place among cryptocurrency platforms.

What Went Wrong?

Backed in 2019, the NEM Foundation announced they have plans to lay off its entire 150 employees in the wake of severe budget cuts. Subsequently, the newly elected president submitted a funding request to the NEM community that claims to rescue the organization. 

But what really went down can relate to the mismanagement of the previous governance council and the accumulation of debt spent on marketing. Later on, the sparks of argument flew when NEM was burning through 80 million XEM alongside the former foundation president Lon Wong promoted “sketchy” ICO such as Ecobit and ProximaX.

“Clearly, the NEM Foundation started as an attempt at decentralized governance, and in the end, significantly contributed to the collapse of the XEM price. Further, the NEM Foundation branded itself as decentralized governance, but clearly has plenty of centralized power to do whatever it wants with dev funds.” — Crypto.iq

As of now, XEM coins seem to be going up, but what does the future hold? 

What Is the Future of XEM?

NEM doesn’t provide an explicit year-ahead strategy with particular goals and milestones. Its Catapult upgrade is yet the most significant update currently still in the works. Its details are outlined in NEM’s Catapult white paper. Some of the main features include:

• Using a tiered web architecture-based design, typical in business computing
• Exceptional scalability
• Messaging at a high rate
• The introduction of an open integration architecture with a high-performance and highly scalable API gateway server layer

NEM’s Catapult upgrade is one of the key driving factors behind XEM’s price. It’s crucial to point out that NEM was originally developed using Java but is currently being rewritten in C++ as part of the Catapult upgrade. NEM is working on numerous other projects, which also acts as a key driver for its future price. Let’s take a look at some of these ventures.

Projects Built on NEM

The number of enterprises and entities that construct projects on the NEM platform will be crucial in determining XEM’s future success and adoption. The more successful and creative the initiatives, the larger the demand will be for the XEM coin.

NEM.io Foundation

NEM is supported by a Singapore-based non-profit called the NEM.io Foundation. Its main mission is to “introduce, educate, and promote the usage of the NEM blockchain technology platform to all businesses and organizations on a global scale.” The launch of a $70 million investment fund to aid and support the growth of local blockchain startups is one of the many examples of the foundation’s efforts.

Real Use Cases

The Mijin commercial blockchain, which has already been put to use by financial institutions in Japan and throughout the world, has kickstarted the implementation of NEM’s technology.

Real-World Applications

The NEM ecosystem sets forth several possible real-world use cases, ranging from payments and transfers to logistics solutions, voting systems, and recordkeeping, all of which may stimulate the wider use of the platform. On NEM’s official website, you can see several examples of these use cases already being implemented.

XEM Price Predictions

Now, let’s take a look at XEM’s long-term pricing estimates. Price predictions are one of the key factors that will help you determine whether or not XEM is a worthwhile investment. However, it should be noted that it’s wise not to base your entire opinion on simple predictions; they only are potential forecasts and may not always be accurate.

First, we’ll look at WalletInvestor, predicting that in 2021 XEM’s price might hover around $0.365. 

Following WalletInvestor’s prediction, we’ll take a look at that of TradingBeasts believes that by the end of 2021, XEM may be worth an average price of $0.29. TradingBeasts’ price projection for NEM is between $0.32 and $0.47 by the end of 2024. 

Finally, DigitalCoinPrice provided its price prediction for XEM. It anticipates that XEM could be trading at an average of $0.50 by the end of this year and $1.02 by the end of 2025, which is a more optimistic prediction than the forecasts mentioned above.

Is XEM a Good Investment?

The first thing you should know about XEM, as with all other cryptocurrency investments, is that it is a high-risk, high-reward investment. It’s doubtful that investing a few hundred dollars in XEM will allow you to retire early. That said, if you wish to put money into XEM, follow the rule for investing in crypto (and other markets): “Invest as much as you can afford to lose.”

All things considered, NEM offers considerable advantages. Each XEM coin could be a good investment if it follows a similar trajectory to Ethereum, which, granted, has yet to accomplish all of its goals. 

Besides, the price predictions we touched on earlier are, overall, positive. According to these forecasting experts, there may still be a wild ride for XEM investors. As of now, XEM is showing a bull trend.

However, If XEM is successful in tackling its flaws and management issues, it’ll only boost the confidence of the communities. 

Where To Trade XEM

In honor of the demand, Bybit recently introduced a new trading pair (XEM/USDT) that allows users to trade perpetual contracts with up to 100x leverage. All you need to do is sign up for an account and claim up to $600 bonus rewards to start trading. 

The Bottom Line

XEM, its growing community, and its corresponding blockchain platform, NEM, have proven to be robust and promising. From its PoI consensus and Catapult upgrade to its multi-signature transactions, there’s no doubt this coin is making its way up the market. For the time being, XEM looks to have found its place in the crypto industry. As additional pilot projects go online, you can reasonably anticipate that this particular crypto coin will gain traction with time.