NEM

What is NEM (XEM)?

NEM, standing for “New Economy Movement”, was an early cryptocurrency project aiming at enterprise adoption.

With the lofty goal of building the “NASDAQ of the new economy”, NEM’s trajectory didn’t turn out quite as imagined. In Beta for a full six years, it had to deal with major issues, including the near-collapse of the NEM Foundation in 2019.

Early on, NEM saw some prominence in Japan, where it was accepted as payment in the hospitality industry. However, the end of the 2017/18 cryptocurrency boom didn’t spell good fortune for NEM.

Failing to lift off and slowing in development activity in the following years, it finally saw a mini-resurgence in the latter half of 2021. NEM was hard forked for a 7th time by its community, allowing nodes to decide whether it would become a sub-chain of the Symbol blockchain platform.

When Was NEM Launched?

NEM was launched in March 2015, following discussions about it that began on the BitcoinTalk forum the previous year.

Having originally thought about building on the NXT blockchain, NEM’s developers decided to fork NXT instead.

Who are the Founders of NEM?

The BitcoinTalk user who originally proposed the NEM blockchain used the handle UtopianFuture. By the time NEM launched its mainnet on the 31st of March 2015, UtopianFuture had left the project.

Lon Wong is often considered a key early contributor to the project. Besides being the founding President of the NEM Foundation, Wong is a Malaysian tech entrepreneur and engineer. He left NEM in 2018 and moved on to other blockchain projects, such as Dragonfly Fintech and ProxiMax.

Another founding member of the NEM Foundation was Jeff McDonald, who invented the Apostille protocol for NEM.

Alexandra Tinsman is another notable member of the NEM Foundation. Elected president in late 2018, just before financial turmoil ensued, Tinsman was able to navigate this volatility and successfully restructure the organization.

How Does NEM Work?

NEM is built for enterprise adoption and written in Java.

Java is a commonly used computer programming language and is API-based, allowing separate computer programs to communicate with each other.

In mainstream applications, logic and business rules are normally decided off-chain by software written in any language. The outputs of these, irrespective of language, can be fed into the NEM blockchain as immutable records.

NEM also features a smart asset system that allows users to model real-world assets. Users create their own crypto tokens (called mosaics) on NEM. These mosaics can be used for various applications, including representations of voting rights or stores of value.

What Makes NEM Unique?

One of NEM’s unique features is its smart multi-signatory feature for transactions. It doesn’t require users to perform any additional programming. It has many potential applications, such as allowing a financial institution to manage AML (anti-money laundering).

NEM’s ability to integrate with off-chain smart contracts is another feature that stands out. It gives NEM various potential additional applications, such as document proofing, notarization, license issuance, certificates of authenticity, and more.

This use of off-chain smart contracts rather than on-chain ones does play a role in security. The failure of one of these off-chain smart contracts does not expose the system to a catastrophic failure, as is the case with some other blockchains.

NEM could also be used as a public or private blockchain as desired. Anyone could use NEM by making use of its API calls, but enterprises were able to avail themselves of bespoke services.

In NEM’s private offering, a version of the NEM blockchain could be provisioned to run on internal servers and only make use of predefined nodes of the client’s choosing. This would create a select network with limited scope but hugely improved performance.

How is the NEM Network Secured?

NEM uses its novel proof-of-importance consensus mechanism for security. When blocks are ready to be validated, the NEM protocol chooses a validator (known as a harvester) by using its importance score.

The harvester’s score is based on how many XEM tokens they have vested, the amount of XEM spent in the past 30 days, and which other nodes are in their activity cluster.

Each harvester can link their account to an existing supernode rather than being forced to contribute their computing power to the validation process. Harvesters, in essence, delegate their importance score to supernodes. The supernodes use their computing power to validate transactions.

What is the Use of XEM?

XEM, the native token of the NEM platform, is mainly used for vesting within its consensus mechanism. Harvesters need XEM to vest and count towards the importance of their account.

The XEM token can also be used for payments on the NEM blockchain. It was also accepted by other services at its height, including crypto travel platform Travala.com.

Who Controls NEM?

NEM was stewarded for many of its earlier years by the NEM Foundation. This tenure ended in June 2020, when the NEM Foundation announced on the nem.io forum platform that it would hand the torch over to NEM Group (NGL). However, NGL’s hold over the NEM blockchain didn’t last very long. After developing and launching a different blockchain platform called Symbol, NGL announced that it would close down in July 2021. The core team behind the project began calling themselves the “Pirate crew” and was led by three pseudonymous developers—Gimre, Hatchet, and Jaguar. They initiated the Harlock hard fork on NEM and Cyprus hard fork on Symbol in late 2021. Alongside both of these hard forks came new multisig accounts for the core funds of both projects. Symbol would have a new 4-of-7 multisig account, and NEM would have a new 5-of-7 multisig account. In both cases, three of the seven would belong to the three core developers. The remaining four would be held by a hedge fund called Valkyrie.

According to the Symbol developers, Valkyrie’s role is to be an asset manager for the NEM and Symbol protocol treasury.

How Much XEM Is In Circulation?

NEM has a maximum circulating supply of 9 billion XEM. All of it is in circulation, which means that XEM is fully diluted. This is an interesting sign for many investors since the majority of cryptocurrencies are not yet diluted and are subject to future supply increases.

How Do You Buy XEM?

XEM is one of the older cryptocurrencies on the market and is available on most cryptocurrency exchanges as such. Its popularity in the Far East may also be reflected in Asian exchange listings, as well as being paired with fiat currencies, such as the Japanese Yen.

You can also buy XEM with cryptocurrencies like BTC and stablecoins like USDT, depending on which exchange platform you choose to use.

Is It Possible to Buy XEM Instantly?

You can buy XEM instantly on most cryptocurrency exchanges. Most of them use internal ledgers to assign some of the XEM in their wallet to your account, which doesn’t require more than a moment.

It might take a little longer if you wish to receive an actual settlement of XEM, though. Most exchanges run KYC (Know Your Customer) and AML (Anti-Money Laundering) protocols before releasing cryptocurrency tokens when a withdrawal is requested.

How Do You Store XEM?

You can store your XEM on an exchange account or withdraw it into a non-custodial wallet that you control. Since NEM has been around for a long time, plenty of wallets have integrated NEM support.

The NEM Foundation Mobile App could be considered an official wallet, and the NEM Nano desktop wallet is another XEM wallet alternative. You can also store XEM in various multi-coin wallets such as Exodus or go with a hardware option like Trezor.

NEM Energy Consumption

NEM’s proof-of-importance consensus mechanism has more similarities with delegated-proof-of-stake than proof-of-work. This is especially true given that harvesters can attach their votes to supernodes instead of having to run a node themselves.

This creates a system that isn’t very heavy on computing power, with a low number of fairly low-powered machines that can keep the network going.

Is XEM a Good Investment?

NEM is a blockchain that comes with tangible risks. The controversy surrounding the NEM Foundation and its near-failure in 2019 was a red flag to many investors.

The subsequent handing off of the project to another entity hard at work on Symbol also scared many people. While it may be unfair to suggest NEM is dead and buried at this stage, there isn’t a whole lot of evidence to say that it’s flourishing.

Perhaps most tellingly of all is its web presence. Most cryptocurrency projects, which are by nature at the very cutting edge of technology, have an excellent web presence. Visiting nem.io, meanwhile, redirects to NEM’s incomplete documentation page on Github.

If all of this was the case, it remains to be seen if there is a market for NEM’s product at all. While blockchain was uncharted waters when it launched, many—if not most—of the world’s top enterprises are developing their own in-house blockchain solutions.

Granted, smaller firms may struggle to invest in their own blockchain infrastructure and personnel. NEM also has a foothold in countries such as Japan and South Korea that it could use as a springboard.

Nevertheless, the flux at the head of NEM and questions over how it will work with or alongside Symbol continue to persist. For now, NEM remains an investment fraught with risk.