NEM (XEM) Beginner’s Guide
Everything What You Need to Know about NEM
Recently, several cryptocurrencies have been calling our attention. NEM has been lately in the news because of the Coincheck exchange hack. 523 NEM were stolen from the hot wallets of the company and several investors lost their coins. But do you know what NEM is and how it works? This is the guide that you need in order to understand this cryptocurrency.
What is NEM?
NEM is one of the most known cryptocurrencies in the market. It is always among the top 20 cryptocurrencies by market capitalization and it is used primarily in Japan. It the second most used cryptocurrency in Japan!
It is a little bit different than Bitcoin. It was created in 2015 with the intention to provide enterprises a cheaper and easier way to transact. It uses a centralized blockchain that it is very similar to Dash. It does not have miners in order to verify transactions. The super nodes are the ones who process the payments and get rewarded by confirming transactions.
NEM Smart Asset System
NEM Smart Asset System allows individuals and enterprises to build what they need on top of this blockchain. Fintech systems, logistic tracking, an Initial Coin Offering (ICO), documents, decentralized authentication and many other things can be built using NEM’s blockchain.
The individual using the NEM Smart Asset System is able to customize how they use NEM’s blockchain. It is important to know that the Namespace defines the place where the individual will work on the blockchain. That means that it can name Mosaics, provide easy-to-remember names to user addresses and more.
This is what NEM says about how to truly create Smart Assets:
“NEM allows you to create Addresses that act as containers for Mosaics that can be connected with Multisig rules. An address can simply represent a user, such as an account holder. But it can also represent an individual unique asset such as a document, or a song, or a package. You can then update that asset through configurable Transactions.”
With transactions, Smart Assets start to work. With Transactions, individuals and enterprises can send Mosaics between addresses, transfer or configure the ownership of addresses, send messages and many other features. The fees of the transactions will be established according to their size.
NEM has been designed thinking about simplicity and flexibility. The blockchain is powered by nodes that run a special software provided by NEM that implements NEM’s feature set and unique consensus mechanism.
The platform is built of nodes that run the NEM’s core node server software. This provides a powerful and stable platform in which Smart Assets transactions are conducted, searched and logged to the blockchain.
So the nodes serve two functions. First, they provide the API gateway that applications can use to access the blockchain. The blockchain can be used in order to create a variety of solution architectures with light-weight code, and important to remark, in any language.
Second, the nodes work with other nodes to build a peer-to-peer blockchain network. The network supports and creates the blockchain itself. NEM node software verifies transactions, synchronizes with other nodes and maintains the stability of the network.
NEM uses a Proof of Importance (PoI) algorithm, similar to the Google’s PageRank. In this way, it is able to prevent a variety of attacks on the trustworthiness of blockchain transactions. In comparison with the Proof of Work (PoW9, it is much more scalable and energy efficient.
These supernodes are the backbone of the NEM network. In order to operate a supernode, it is necessary to have 3 million XEM or more. Supernodes must be running 24 hours per day processing the transactions of the network.
Supernodes keep the system fast and powered and ensure efficiency and performance. In this way, wallets and third party applications can use the entire network without downloading or processing the entire blockchain.
These supernodes get rewards in exchange for the computing work. At the moment, the reward is about 320 XEM per supernode per day.
Companies in Partnership With NEM
At the moment, several companies have established partnerships with NEM. These companies allow the development and success of the NEM network.
The Tech Bureau is a cryptocurrency and blockchain development company that has developed Mijin. The company uses NEM technology, side by side with other technologies, for its Crypto-Fintech lab. Furthermore, it runs the cryptocurrency exchange, Zaif.
Provides blockchain solution for different international and local payments and settlements. This company is aiming to disrupt the traditional SWIFT method and other forms of correspondent banking.
Atraura Blockhain is a technology company that specializes in development, integration and maintenance of Blockchain technology across several industries. With NEM, this company helps clients stay competitive.
There are many other enterprises and individuals investing in this interesting cryptocurrency like iCentric, Transform Group or Zeus Exchange. The different possibilities that it offers allows companies to potentiate their businesses and projects.
NEM in the Cryptocurrency Market
At the moment of writing this guide, NEM (XEM), is the 10th most important cryptocurrency by market capitalization. The market cap arrives at $6.9 billion dollars and each NEM Coin is worth around $0,77 dollars.
This cryptocurrency had an exponential increase as most of the cryptocurrencies in the market after December 2017. Its price passed from $0.2 dollars the first days of December up to two dollars at the beginning of January.
NEM has a fixed supply of 9 billion XEM. As more enterprises and individuals use NEM, then, its price will increase due to the increased demand for a fixed supply of coins. NEM could be an interesting investment in order to diversify the portfolio.
NEM is an interesting cryptocurrency that has been growing in many different fields. Many enterprises are using this cryptocurrency for the possibilities that it gives. With NEM’s Smart Asset System, companies see an interesting potential to develop different products using blockchain technology.
With the supernodes, it has the possibility to easily scale, compared to other older generation’s cryptocurrencies. Its future depends on how Blockchain technology will evolve and the need that enterprises will have. If there is an interesting demand for this product that NEM sells, then, it can have an important growth potential.
If you want to know more about this cryptocurrency, you can visit NEM’s webpage.
If you are interested about other cryptocurrencies, please have a look at the other guides:
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