NEM cryptocurrency guide advises where to buy and how to buy NEM. This guide also contains the markets, value, trading, investing, buying, selling, transactions, blockchain, mining, technology, advantages, risks, history, legislation, regulation, security, payment, networks and many other interesting facts about NEM as well its status in the world of cryptocurrencies.
NEM, Wednesday, 2018-05-09
- 1 What Is NEM?
- 2 Beginner's Guide to NEM
- 3 Where and How to Buy NEM?
- 4 NEM Markets
- 5 Where to Spend or Use NEM?
- 6 How Does NEM Work?
- 7 NEM Regulation
- 8 Is NEM Secure?
- 9 History of NEM
- 10 NEM Videos and Tutorials
- 11 See Also
What Is NEM?
NEM (New Economic Movement) is a peer-to-peer cryptocurrency and one of the latest blockchain platforms launched in March of 2015. The NEM code was written in Java though the NEM developer team reported it is working on a C++ version by the end of 2018.
Unlike other cryptocurrencies such as Bitcoin that have been using proof-of-work algorithm, NEM team opted for the proof-of-importance that relies on how much one uses the network. The NEM blockchain code utilizes an enterprise blockchain version called Mijin that was reported to be under test by the last quarter of 2017.
According to NEM foundation, NEM is a new kind of cryptocurrency that targets empowering users by creating a new economy anchored on principles of total decentralization, total financial freedom, and offering equal opportunity. To put it differently, NEM was crafted to address the problem of wealth inequity.
The focus of equality is inherent at all levels of NEM operations. This is because NEM opens a lid for all the people including the impoverished to access great opportunities including financial services.
NEM refers itself as the smart asset blockchain. The operations of this model closely resemble that of smart contracts in Ethereum. NEM, like Ethereum, allows users to create decentralized apps (Dapps) and deploy them on the network. However, the smart asset contracts are implemented as a layer on the blockchain so that issues on one node do not warrant a fork like it happened with Ethereum during the DAO attack. You can use the smart asset contracts to manage ownership contracts, supply chains, and financial instruments.
Beginner's Guide to NEM
The cryptocurrency niche is advancing at a very rapid rate. A lot of cryptocurrencies are coming up at a very fast rate as people realize and move to embrace the blockchain technology. But the focus has now shifted from simply releasing new networks to the value they bring. This is the guiding bottom line that informed the NEM network.
NEM (New Economic Movement) was borne out of community’s curiosity to take things a notch higher than where they were in 2014. The UtopianFuture was inspired by the cryptocurrencies of that time but wanted to take the benefits to more people. That is the vision that lives to date and that has helped the NEM blockchain network jump to top 10 best cryptos in 2017.
NEM is a peer-to-peer blockchain platform that utilizes blockchain software called Mijin. It employs the latest algorithm in the crypto world, the proof-of-importance that takes the common proof-of-stake a notch higher. The algorithm monitors the nodes and rewards them based on the number of transactions that on the network.
The main target of New Economic Movement is seeing the blockchain technology being taken to all. NEM focuses on helping all people adopt the technology, own it, and apply in their daily lives. NEM works through the following ways;
- Smart addresses.
Though NEM is very far in value from the leading cryptocurrency, Bitcoin, its steady progress and an enthusiastic team has made experts start seeing it as the crypto asset of the future. The unique cooperation model especially linkages with banks is seen as a possible springboard that will catapult the cryptocurrency value to higher levels.
This guide takes you deep into the NEM network to help you understand every component of its architecture, its blockchain technology, and harvesting. We also explore NEM legality, relation to taxes, anonymity, and security among others. Keep reading this comprehensive guide to get all that you want to know about NEM.
Where and How to Buy NEM?
There are several ways to acquire NEM. You can get paid in NEM, someone can simply donate XEM to you, or mine directly on its network. However, a simpler and direct way is buying NEM. But where and how do you buy NEM?
NEM like other cryptocurrencies can only reside in the NEM blockchain network. Unlike the fiat currencies that can be bought physically in forex markets and physically withdrawn from ATMs and banks, NEM native assets are digital. This means they are not printed and can only reside in the network and stored in a digital wallet. The wallet helps you to hold XEM waiting for the value to grow or trade directly. After getting a wallet, here are the main places to buy XEM.
1) Cryptocurrency exchanges
- These are the main trading platforms for cryptocurrencies. They operate the same way that forex markets do. However, forex markets deal with fiat currencies while exchanges allow users to trade in crypto assets. Here, you can buy NEM based on the latest price that is driven purely by demand and supply.
- To buy NEM from a cryptocurrency exchange, most of them will require you to follow their established rules. Notably, the exchanges are visible and are required to run in line with the local laws. This means that though you have maintained the anonymity of your identity in the NEM platform, personal identification will be required to open an account with an exchange and buy XEM.
- Before picking an exchange, ensure to comprehensively evaluate its effectiveness. Only pick a highly secure and reliable exchange. It should also provide the opportunity to trade in multiple cryptocurrencies and charge low fees. Some great examples to consider include Poloniex, Bittrex, Cryptopia, and CEX.io.
2) Cryptocurrency brokerages
- Brokerages have entered the cryptocurrency world to help to fill the gap in the rising demand for crypto assets. Unlike the cryptocurrency exchanges, brokerages allow users to buy NEM directly. Though their price follows those on the exchanges closely, they are not purely defined by market demand. The brokerage firm adjusts the price based on the targeted profits.
3) Cryptocurrency ATM
- In January 2009 when Bitcoin opened the lid to cryptocurrency world, no one could imagine that people could walk into ATMs and buy crypto assets of choice. But it is possible now. The ATMs look and feel just like standard fiat currency ATMs though the transactions are done in crypto coins. The only challenge for using cryptocurrency ATMs is that most of them support only Bitcoin. This means that you have to start by purchasing Bitcoin and converting to XEM at an exchange.
4) Direct purchase through crypto clubs
- The growing popularity of cryptocurrencies has made more people to come out and start forming individual groups for direct linkages and support. Such groups make people know each other and advance the conversation about cryptocurrencies. In addition to sharing experiences and expectations, these clubs also provide users with an opportunity to make direct purchases. One example of such clubs is the LocalBitcoins.com. The club organizes for face to face meeting between buyers and sellers so that they can negotiate the conditions of the purchase. Remember that even in such cases, you MUST have a cryptocurrency wallet.
When you decide to join the cryptocurrency world, one must have thing is a cryptocurrency wallet. This is the location where all the XEM will go after harvesting or receiving as payment. A NEM wallet is a software that helps people in the NEM network to manage the native assets. The main types of NEM wallets include desktop wallets, web-based wallets, hardware wallets, and mobile wallets.
At this point, it is important to delve deeper on the term digital wallet. While the definition indicates that the wallet is a storage location, the definition is a misnomer. In reality, no NEM coins are printed. What NEM wallets store are private keys and public keys.
The private key is a special code that only you and the wallet should know. It is your distinct identifier that gives you access to the wallet for all transactions. The public key, on the other hand, is the address you provide the person who wants to pay XEM to your wallet. This means that the private keys are completely private and should never be shared, while public keys is what you provide to the network for verification during transactions.
Six tips on picking the best NEM wallets
Picking an appropriate wallet is the most important thing when entering into the cryptocurrency industry. It is not uncommon to hear people cry that their wallets have been hacked, they have lost their wallets, or their XEM have been lost. To avoid these challenges, make sure to follow these tips to pick the best NEM wallet.
Warning! Not every software advertised as a NEM wallet is indeed a wallet. Some are malware that targets getting into your system, siphon XEM or steal personal information.
- Only pick the NEM wallet with no hacking history. This will be a demonstration that the team behind the wallet is committed to providing users with utmost security.
- Pick a wallet with a large following. A bigger user base is an indication of approval for the respective wallet.
- The wallet should have cold storage service as well as secure backups to make a recovery easy.
- It should be capable of generating private keys seed phrase for easy recovery of lost XEM.
- The wallet should be carefully designed with an intuitive user interface.
- Take care when picking a wallet to select only the type that is compatible with your operating system.
Top 5 NEM wallets
The following are the best wallets that every user should consider. Remember that no matter the rating, none of these wallets is completely immune to loss, theft, and even attack. You MUST, therefore, take extra caution by maintaining the NEM wallet and host operating system updated. Besides, you should NEVER share the private keys with anyone.
1) NEM nano wallet (desktop wallet)
- This is the official NEM wallet that is designed with all the features of the NEM platform. It is light-weight software that users can download and install in their computers. It will convert your computer into a node and allow you to send XEM, messages and mosaics to addresses in the network. It is compatible with most operating systems including Linux, Windows and Mac. The wallet has Changelly integrated in its design for direct and easy exchange of XEM for other cryptos.
2) Trezor (hardware wallet)
- This is another leading NEM wallet that has won the hearts of cryptocurrency users because of its ease of use and enhanced security. Though it was originally designed for Bitcoin, users can now use it for storing XEM. Your XEM are stored in an offline Chip that only comes to life when activated with the user’s password. Trezor also allows users to generate private keys seed phrase for easy recovery in the case of loss of malfunction.
3) NEM Community Client
- This is the recommended NEM desktop wallet that acts as a full node in the NEM network. The wallet also allows the user to operate as a supernode to make use of NIS (Network Infrastructure Server) when making transactions. Users have all the features in the NEM network including sending XEM, mosaics, messaging, namespaces, and subdomains using the NEM community client.
4) NEM mobile client
- This is one of the latest apps from the NEM team designed to work on iOS operating systems. The wallet acts as a complete NEM client that allows users to manage multiple accounts. The private keys and crucial data are encrypted and stored locally. The wallet also allows users to generate and export NEM accounts, edit multisignature contracts generate history for easy management.
5) Jaxx (mobile wallet)
- This wallet was designed by Decentral company (a Canadian based firm) with a target of supporting top cryptocurrencies in the market. By the close of 2017, the wallet supported 13 cryptocurrencies including NEM. Its greatest selling points are robust security features, lovely user interface, and aggressive development community. It is also available for use in most operating systems including Windows, Linux, OS, Mac and iOS.
Where to Buy NEM with Credit Card?
To many people, credit card is the most convenient method of making purchases. Because it is accepted in local and online stores, more people find it very convenient whether shopping for home or office products. However, can you buy NEM with credit card?
The process of buying NEM with credit cards is relatively easy. However, you can only use the cards on the exchanges that accept credit card for payment. This means that you will start by registering an account with such exchanges and acquiring a cryptocurrency wallet to hold the XEM at the end of the process. The top exchanges that accept credit cards for NEM include;
Where to Buy NEM with PayPal?
If your cash is in PayPal, it is unfortunate that there is no direct way to buy XEM. However, this should not discourage you from the desire to own XEM. Consider buying Bitcoin first using PayPal in top exchanges such as CoinBase or VirWax and then converting to NEM in a different exchange such as Changelly.
How to Buy NEM with Wire Transfer?
Today, there is nothing that commands a lot of trust like a bank in the society. Many people believe that banks can never go wrong. The fact that the cash stored in banks is insured provides unique sense of assurance that nothing can go wrong. This has made more people to keep asking about the best way to make payment for their cryptocurrency assets?
Note that when it comes to wire transfers, the process takes longer because the exchange of choice waits until the cash hits its system before releasing XEM. In some cases, this could take even more than 7 days.
To buy NEM with wire-transfer, you should start at ensuring the bank account has ample cash for the transaction you anticipate. Then, you need to visit the right exchange (that accepts payment in wire transfer) and open an account. A great example to consider here is Bitfinex.
On the purchase portal, provide the public address of your cryptocurrency wallet, personal info, and other details required to effect payment through wire transfer. The transaction will remain pending until the cash reaches the exchange. If you want to use other exchanges such as Kraken and Gemini, the process will be longer because it will require one to first purchase Bitcoin and exchanging for NEM.
Where to Sell and Trade NEM?
After entering the NEM network, you will soon start accumulating XEM in your cryptocurrency wallet. For those in business, this accumulation can be as a result of payments made in XEM while others opt to mine the tokens directly. One way of enjoying the fast growing value of XEM in the market is trading it for fiat or other cryptocurrencies.
To trade XEM, a user requires the right platform, understanding its rules, and opening a trading account. Notably, unlike the NEM cryptocurrency, the trading platforms are regulated by local authorities. You will, therefore, find some of them registered as limited liability companies or private businesses.
Your special focus should be drawn to the security of the selected trading platform. While NEM has worked so hard to ensure that the XEM in users’ wallets are secure, the risk of losing at the exchanges is very high. It is not uncommon to hear a cryptocurrency exchange has been hacked and millions worth of native coins stolen. One of the recent successful hacking was in an exchange in South Korea. The hackers broke into the exchange software and siphoned thousands in Bitcoin. The exchange was forced to file for bankruptcy.
The best places to sell and trade XEM
- This is one of the fast growing NEM trading platforms that have won the affection of traders because of its unique design and fast transactions. Unlike most cryptocurrencies that hold users' crypto assets in the accounts for a very long time, NEM allows traders to move their coins to their wallets immediately the transactions are completed.
- The exchange has a lovely interface that comes with progressive metrics to help users make the right decisions promptly. Besides, it also allows traders to use credit cards when buying cryptocurrencies.
- The main demerit of Changelly is the limited cryptocurrencies that users can buy with fiat currencies. You can only buy XEM worth $50 during the first purchase and no more than $500 in the subsequent 5 days. This is a great limitation especially for traders who want to join the market and optimize trading when the value of NEM is at the highest point.
- This is one of the leading cryptocurrency exchanges based in the United States. It was founded in 2011 and has gained a lot of popularity in the recent years as people get more familiar with cryptocurrencies.
- The trading platform is preferred by many traders because of high trading volume as well as low charges. Every trader is required to sign for a Kraken trading account to access the platform user interface that has one of the best cryptocurrency market analytics. You can follow the latest NEM and other cryptocurrency asset performance through graphs and reviews to make the right decision as fast as possible.
- While the unique features of the platform make it very attractive, many people complain about the long time required to open accounts. In most cases, you are required to wait for more than 48 hours before the account is verified.
- Bitfinex opened its doors in 2014 and has grown to become one of the most advanced trading platforms in the crypto world today. It has very high trading volumes and an appealing UI (user interface) that allow users easily access all the trading features.
- By allowing trading in multiple cryptocurrencies, the exchange makes it possible to optimize profitability by picking the most profitable pairs. You can trade NEM for other crypto assets such as OmiseGo, Dash, Bitcoin, Ethereum, and Ripple among others.
- Like Kraken, the biggest setback for Bitfinex is its lengthy process of registration. Once you have provided all the details and followed the rules, at least 10 working days will be required to verify the info. Besides, the platform requires a lot of personal details such as phone number and government-issued identity numbers.
- Coss trading platform has gained a lot of popularity because it shares the transaction fee with token holders on 50:50 basis. The design of the exchange is to make NEM and other crypto asset trading easy, fast, and more profitable. It comes with a cryptocurrency wallet, a payment gateway, a pre-paid card, and market cap listing. This means that the exchange makes it easy for users to trade NEM for cash and do shopping with their card. Their fee is also subtle and ranges from 0.04-0.2% based on trade volume.
5) Direct trading clubs
- As NEM and other cryptocurrencies’ popularity grow, more people are starting to come out to meet other traders. In cities such as New York, London, and Hirosaki, new trading clubs have emerged to help people meet other crypto enthusiasts. This is a great opportunity to not only know other people who are cryptocurrency enthusiasts, but to also trade.
- One such club is the LocalBitcoins.con. This club helps to organize meetings between different cryptocurrency enthusiasts. Though you can use the platform to negotiate the price and quantities of XEM to trade, the platform is passive. This means it finally facilitates a face-to-face meeting between buyers and sellers.
- The advantage of using these clubs is that they operate like a direct market where buyers and clients come and buy without any rules. You can agree to pay cash, credit card, PayPal or other methods. You can even decide to sell Bitcoins for a fancy car as long as both parties are in agreement. Do not forget that a cryptocurrency wallet is a must-have in order to effect the transfer.
- However, the clubs come with the problem of finding a willing-seller-willing-buyer situation. In many cases, it can take months before a person who is willing to buy your XEM shows up at a local club.
- This trading platform is one of the leading exchanges in the Far East. It has a great user interface and helps users easily identify the best trading pairs in the market. It also serves as a cryptocurrency wallet that allows traders to operate more securely.
How Much Are the Transaction Fees of NEM?
When Bitcoin entered the financial sector, the main promise was to keep cost of transaction as low as possible. The same objective has been carried over by almost all other cryptocurrencies including NEM. NEM transaction fee is only 0.1% of the transaction volume. Though this is a very small amount if you are sending small amounts, it can be a huge figure for those handling large volume transactions.
NEM markets are platforms that bring together buyers and sellers to facilitate trading. The markets are designed to capture the current status of the market in line with demand and supply to help XEM price follow the laws of demand and supply. The market works the same way that traditional forex markets work. However, the NEM market trades in cryptocurrencies while forex trade fiat currencies such as the dollar.
In some cases, the markets might allow users to trade XEM for fiat currencies. However, many are those that only allow crypto to crypto asset trading.
It is important to appreciate that the NEM markets are run under the local laws. This means that though you are trading in cryptocurrencies as opposed to fiat currencies, all the rules associated with using an exchange must be followed. Consequently, you will find the exchanges demanding a lot of personal details and even taking some time to verify your identity. The main NEM markets can be classified into two;
A) Direct trading platforms:
These are unique meeting places that allow cryptocurrency holders to meet, trade and share experiences. In many cases, the direct trading platforms are informal setups that simply allow users to meet, share ideas, and agree to trade. One such direct trading platform is LocalBitcoins.com that organizes for meetings to help NEM and other crypto users know each other.
B) The cryptocurrency exchanges:
The cryptocurrency exchanges are the main markets that allow traders to meet from all over the world and buy as many XEM as possible. Though some have geo-political restrictions, most of them allow traders to buy XEM from anywhere as far as they meet the pre-set requirements.
Picking the best cryptocurrency market
Recently, the exchanges have increased so much that it is very difficult to pick the ideal market. Here are some great tips to help you pick the best NEM markets;
- Go for exchanges with great reputation. Good reputation is a demonstration that a cryptocurrency exchange has gained trust from users and experts. You can know a reputable exchange by reading through reviews, clients’ feedbacks, and expert reports.
- Check for the most secure exchange. The cryptocurrency markets are the easiest targets where hackers find it easy to siphon users’ crypto assets. It is, therefore, advisable to look for the most secure platform that comes with multiple layers of security such as 2-factor authentication and immediate transfer of users’ coins. The cryptocurrency should also not have any history of hacking.
- Pick a market that has low charges. When you make transactions on any exchange, a transaction fee is levied as a percentage of trade volume. Look for an exchange with a low fee to avoid getting all the profit being eaten in operational fees.
- Establish the level of verification required by the exchange. After entering the cryptocurrency industry, many people want to operate as anonymously as possible. Therefore, you should only go for an exchange that does not ask for a lot of details and making it possible to identify you.
- Support with advanced metrics and analytics. As a market, the most important thing is the trading pairs. You want to trade NEM for other currencies that guarantee highest returns. The cryptocurrency exchange of choice should provide easy to understand metrics that make prediction direct and accurate.
- Only pick the exchange that does not restrict people from your geo-location. Some exchanges are created with a target of operating locally. If you come from a region where a cryptocurrency exchange does not cover, do not consider it. Fortunately, the numbers of cryptocurrencies that allow people to trade internationally with no restrictions are very many.
The top three NEM markets you should consider
To get more from a NEM market, it is important to carefully study it to learn the operational rules and key features. You should also target the exchanges that allow trading in multiple cryptos to optimize profits. Some of the greatest NEM markets include;
- ShapeShift has continued to win bigger market share in the cryptocurrency market niche because of its ease of use and flexibility. The exchange has minimal registration requirement. This means that you can easily open an account and start trading within minutes. It is also integrated in some wallets such as Jaxx to make trading easier and direct.
- The exchange supports multiple cryptocurrencies so that users have multiple trading pairs to select for higher profitability. This is not all. Once you are through with trading, the exchange does not hold your crypto assets. You can move them directly to your wallet for extra security.
- Poloniex is one of the leading cryptocurrency exchanges in the market today. The exchange has been growing rapidly because of its intuitive user interface and enthralling market analytics. You also get direct support via live charts and news flow to understand the nature of the market for better trading decisions. The platform has a low transaction fee of 0.25%.
- This is a New Zealand based exchange that is gaining a lot of acceptance back at home. More users are opting to use it because they can convert NEM and other cryptos directly to fiat currencies. But this is not all. The Cryptopia exchange has a trading marketplace integrated in its platform. This means that users are free to make direct purchases from different online shops and pay in NEM.
- The main disadvantage of Cryptopia is that it only allows users from the Far East and New Zealand. This locks other people from joining and enjoying unique features. Besides, it also lacks leverage for traders who target speculative trading.
Value of NEM
Since its launching in March 2015, the price of NEM has continued to grow progressively. However, the biggest leap was reported in 2017 when it experienced a 500% growth to enter the top ten cryptocurrencies based on market capitalization. Many crypto analysts have pointed that the growth is as a result of search for an alternative cryptocurrency as Bitcoin appears out of reach. By November of 2017, the price of NEM had grown to reach $0.8 with a market capitalization of close to 8 billion. Here are the main driving forces behind NEM.
A highly committed development and lead team
The main driving force of the fast-growing value of NEM is an enthusiastic team that keeps introducing advanced products that users can associate with. Many people have been looking at Bitcoin and other cryptocurrencies to be disruptive and bound to fall at some point. They are highly competitive and market themselves as alternatives to local institutions such as banks. Now enters NEM. The NEM blockchain is being tested by banks and other large organizations. This means it is seen as a partner as opposed to competitor. Such cooperation is bound to catapult the cryptocurrency value even further up the way Dash has been operating.
The cryptocurrency’s Japanese roots
The Japanese roots of NEM have also helped to drive the fast-growing demand. Many people in Japan and greater Far East are considering NEM as one of their own and, therefore, joining in droves expecting to reap the same way Bitcoin has yielded huge returns. A lot of local investors are moving funds into the network.
The cooperation with local banks
The connection to Japanese banks has given NEM some form of validity that is making people across the globe to consider joining. Though many do not comprehend how the cryptocurrency network operates, they have jumped into the network from the viewpoint that it is a banking system extension.
One important thing about the value of NEM is that it is likely to remain stable even when the looming regulations finally come into force. The fact that the system is being tested by banks means that it is likely to operate within the legal limits and, therefore, give the current institutions a new lease of life. This will be a win-win situation for banks, NEM, and even governments because everyone wants to be compliant.
Is It Profitable to Invest in NEM?
Investing in cryptocurrencies has become a very big thing today. With the price of Bitcoin still growing wildly by the close of 2017, more people are inspired to join and invest. One of the fastest growing cryptocurrencies is NEM. Its entry into the top ten cryptos in 2017 made more people to believe that they could experience exponential growth similar to the trends depicted by Bitcoin. But is it profitable to invest in NEM?
- NEM has a lot of applications that make it robust
- When you compare NEM to cryptocurrencies such as Bitcoin, its architecture is complex and provides users with multiple products. Indeed, it is possible to manage anything from shipping info to clients’ medical records for your business using NEM. This means that the cryptocurrency will continue drawing greater meaning and grow in value. It is, therefore, a very profitable investment.
- The NEM network targets strengthening institutions and not outdoing them
- Unlike other cryptocurrencies that have demonstrated outright desire to edge out financial institutions, NEM is different. Its developer team has been trying its systems in Japanese banks to ensure that both can grow and become stronger. This is likely to grow its value and take it even higher in the cryptocurrency ladder.
- NEM team is highly aggressive
- The growth, rating, and success of any cryptocurrency are dependent on the lead team. The aggressiveness demonstrated by the NEM foundation and developer team points at a group that is committed to going very far. As the lead team works on updates and enhancing the network security, NEM is likely to become more popular and profitable.
- The community attachment makes NEM draw a greater sense of identity
- As other cryptocurrencies work on winning people’s affection NEM is already miles ahead. From the beginning, it was designed as a community cryptocurrency. This sense of identity has made more people want to be associated with it to reap associated benefits. The community that has wide presence in crypto related social spaces is marketing NEM aggressively. This has yielded the current results of more users who want to join.
Where to Spend or Use NEM?
For many people entering the cryptocurrency world, the main focus is being able to spend the crypto coins they mine or receive as payment. The ability to spend crypto coins is also used to demonstrate that the growth and acceptability. While NEM has been working hard to win partnerships, there are only a few merchants such as mynem.store that accept direct payments in XEM.
However, this situation is likely to change after NEM entered into a partnership with PundiX (a payment system for restaurants, cafes, and shops). Most people with XEM are expected to start using the crypto assets to make purchases in all PundiX supported stores.
It is important to note that though very few stores accept NEM, users should not consider themselves out of range. Instead, they should convert NEM to Bitcoin using an appropriate exchange and complete the transactions in different stores. Bitcoin has gained more acceptability and a lot of stores are now accepting payment in BTC.
Can NEM Grow to Become a Major Payment Network?
Yes, NEM can grow to become a major payment network. While a number of cryptocurrencies are focused on reaping highest possible profits from the growing popularity, NEM does not appear to be in a hurry. Its unique focus on making blockchain economy a reality has helped the platform to curve a special place in the cryptocurrency niche. With time, experts and communities in the cryptocurrency niche appear to agree that NEM will become a major payment network.
- The NEM network is committed to perfecting every product
- When the UtopianFuture decided that they should go for a completely new code as opposed to a fork of NXT, they demonstrated the desire to follow the longer route but deliver better results. In fact, they released two test versions of NEM before the final one was launched in 2015. The desire to deliver a reliable system is evident in the current payment project being tested with banks in Japan.
- NEM has partnered with financial institutions
- The operation model of NEM that looks at banks as partners as opposed to competitors has made it easy even for those in traditional systems to use the network. If a bank adopts the NEM system and uses it to send funds, it means all the users in the institution have been brought onboard. This secret will make NEM gain more acceptability in many companies.
- The NEM architecture makes it easy to design unique products
- Whether a business wants to design a reward program or provide special discounts, it is now easy to do it right inside the NEM network. The creative products place NEM at the forefront in driving payment especially for enterprises.
- The payment system makes users to remain completely anonymous
- Many people want to operate anonymously and hide in the network. This means that NEM will be preferred by many buyers especially when they anticipate charge-backs. The high level of encryption and advanced two-tier architecture helps users to remain private all the time.
- NEM is very fast and reliable
- Whether you are sending funds from the US to Japan or Latvia to Bolivia, the transaction cost is very small compared to using conventional banks. Besides, the NEM network allows users to take full control of their transactions so that payments can be done anytime including at night, weekends and public holidays.
At this point, it is important to appreciate that the ability of the NEM system to become a major payment network is also reliant on the looming regulations. If the new legislations target suppressing cryptocurrencies operations, the chances are that the capability of NEM to grow could get compromised.
How Does NEM Work?
NEM works in many respects like the Bitcoin network that use blockchain technology to record public transactions. While the Bitcoin cryptocurrency was largely targeted at enhancing sending cash from one point to another in a peer-to-peer manner, the NEM platform uses a similar mode but takes everything to the enterprise level.
As a peer-2-peer system, NEM allows users to operate directly on the network so that payments are effected instantly and at a very small fee. To understand how NEM operates, let us dig deeper into its core and features.
The integration of smart addresses, namespaces, and mosaics
Unlike other networks such as Ethereum, NEM has the benefit of not asking users to craft their own smart contracts codes. Rather, users on the NEM network simply need to compile their assets into unique Mosaics, define individual namespaces, and manage smart addresses via APIs (application programming interfaces). The smart addresses are simply more than numbers and codes for receiving and sending transactions. People in the NEM network can use the contracts to represent anything such as staff appraisal reviews, shipping details, and marketing surveys among others. The data on the smart contract is added to the container address to determine how the address will relate with others. The good thing about the smart addresses is that they are transferred based on the rules you set.
The Mosaic fixed smart assets are unique assets that can be used by people on the network to represent identical things that do not change in a business. In reality, the NEM mosaic represents things such as votes, signatures, reward points, and NEM tokens. Think of them like shares in conventional company setting or cryptocurrency native-assets.
Creating mosaic and namespace
Perhaps you might be asking; how exactly can I create a mosaic and namespace? To create a Mosaic, the NEM user has to define some attributes such as quality, divisibility, transferability, name, and more. The mosaics will be distributed between assets based on the rules set out in the addresses.
A good example of a smart address can be a condition stating that if anyone sends a specific amount of token to a specific smart address, the second address will automatically release to that address a mosaic full of shares of stock. This creates the bottom line for the sale of shares in an easy, automatic and direct way. You can also add more conditions based on preferences of your enterprise.
The NEM, users are also free to create Namespaces. These work the way domains operate in the internet. However, the Namespaces are designed for viewing the NEM assets. It is like setting out your own space on the NEM blockchain.
The namespaces allow businesses and users to be accessed by other users on the network directly. You can even add subdomains that have enterprise assets run the same way that websites operate.
From the privacy to nature of smart assets to be deployed, NEM places full control on users’ hands. It is because of this focus that NEM has been referred as the ultimate blockchain that will create a new meaning to the work of cryptocurrencies. It has a lot of potential to even replace Bitcoin as the main cryptocurrency.
Does NEM Use Blockchain Technology?
The NEM smart asset system
The NEM blockchain powers the network’s Smart Asset System. The system is targeted at being an open and fully customizable solution for any number of uses established on top of powerful API (application programming interface) calls. The NEM blockchain and transactions are secured and processed through global networks of nodes that use the NEM core code. The network is used as an API Gateway server.
For developers targeting to create blockchain powered applications, there is no need to run special NEM software. All the functionalities are available through API calls to enhance flexibility. APIs can get access to NEM assets directly, make requests, or even adapt to use NEM in the background.
Developers consider NEM addresses as containers for their assets. They are even ready for updates and changing anytime. The address can represent anything such as a wallet holding your XEM or a more complicated thing such as a document that requires multiple signatures, or even a company election that requires marketing surveys.
Once the developer has the address, he can go ahead to create NEM Mosaics. These are identical and transferable assets that represent XEM residing in the addresses. The model of addresses and configurable Mosaics provides users with countless opportunities. Because all the NEM functionalities accessed via NEM API, a user can create the system he dreams of and plug it into the NEM blockchain.
The NEM blockchain proof-of-importance
The NEM blockchain uses Proof-of-Importance algorithm to achieve consensus for any transaction by incentivizing the nodes. This is a departure from the common proof-of-work that is employed by Bitcoin and other cryptocurrencies.
The NEM algorithm attaches an importance score that determines how often the node can harvest the NEM native token. This system works by vesting coins in the network. When you place coins in the wallet, they commence as unvested coins. Then, they will start contributing towards the importance of your node. To be considered eligible for the importance score, the account must have over 1000 vested XEM.
In addition to tracking the NEM vesting, the blockchain constantly analyzes info that all the nodes are contributing. This simply means that the more the transactions a node makes and uses the network, the greater its importance. The blockchain attaches a score to every node that determines the likelihood of harvesting NEM.
The NEM blockchain is not hardware intensive. Therefore, it allows full nodes to operate on most machines regardless of their power to prevent centralization. Because the vesting process requires time, NEM is not the rich-get-richer faster through the acquisition of expensive mining hardware.
In other blockchains such as Bitcoin, the mining blocks and network nodes are separate. This is different when it comes to NEM. In NEM, operating a node and harvesting XEM are done from the same software. This helps to incentivize the nodes to operate as full or supernodes and promoting decentralization.
The 2-tier blockchain
The NEM blockchain is available in a 2-tier architecture. Anyone can use the public NEM blockchain to access and use API calls. However, if you want to get a higher level of privacy, consider going for the NEM private blockchain version that runs on internal servers. Note that with the private node network, some features used in the public version can be removed to facilitate faster transactions in a more anonymous manner.
The private blockchain is used for deployment strategies to run anything on your enterprise from loyalty points program to fleet management without risking exposure of the data. This makes the blockchain especially effective for powering internal tools.
A closer look at the proof-of-importance in NEM
Harvesting is the process used by NEM to process transactions, secure the network, and add new blocks NEM public ledger. To make harvesting possible, NEM uses PoI (proof-of-importance) which is a consensus algorithm that determines who should calculate the next block. The importance of any account/node is determined by a number of things;
- The number of coins that the node holds.
- The number of transactions that the node makes.
The main focus of the PoI is ensuring that only the most serious people are involved in adding new blocks in the network. PoI is different from the PoS (proof-of-stake) model in that PoS only allow users with large amounts to mine the networks. This means that those with fewer amounts but are very active could be sidelined or relegated to the back seat. However, the NEM PoI adds the transactions that one does in the network as a factor of determining who should actually add a new block. It is, therefore, important to optimize the NEM network both at the personal and enterprise level to raise the account importance.
NEM is a deflationary coin. At inception, a total of 8,999,999,999 were created and only that number will ever exist in the network. This means that there is no risk of inflation. The original 1500 founders were allocated 5,999,999 XEM while the remaining ones are to be distributed through harvesting and NEM development. A new block is added into the NEM public ledger every 60 seconds.
The process of mining NEM
To start mining NEM, you are required to have at least 1000 XEM, a NEM wallet, and NEM client. Therefore, visit their website to download the NEM client and install it on your computer to form the node. The NEM client is available for most operating systems including Windows, Mac and different mobiles.
NEM allows users to harvest XEM using standard computers. You can either harvest using the standard computer if it can support 64bit software or go for GPU (graphic processing units) that deliver higher hashing power. You can also set up a mining rig with multiple GPU lines or acquire ASICs (application specific integrated circuit) hardware.
Pick appropriate harvesting software. The most recommended for harvesting XEM are the Ethminer and Minergate. Besides, you should install a delegated harvesting feature on the XEM client to help secure the wallet. In many cryptocurrencies, users are required to pass private keys to a node in order to start harvesting. This raises the risk of attack from malicious actors. However, NEM allows miners to delegate their importance score to other accounts without actual XEM in them so that nothing gets stolen in case of malicious attackers strike. Note that harvesting using a delegated account allows users to direct all the harvested XEM to the main account.
Note! When you hit the 1000 XEM in NEM, you become a supernode. This means that harvesting and running a supernode are packaged together.
What Are the Advantages of NEM?
- The system uses smart addresses that make it possible to customize anything in an enterprise. This is perhaps the nearest that the cryptocurrencies have gone in making the dream of total integration into business lifecycles a reality. You can now add shipping, billing, surveys, and any information on the NEM addresses.
- The NEM network is fully anonymous. The NEM developer team went into an overdrive in ensuring that all operations in its system are completely anonymous. In fact, users have the option of selecting the level of privacy they desire on the network. This means that you are guaranteed of keeping company details, transactions, and anything on the network about your enterprise as private.
- The NEM Namespaces allow users to fully own and optimize the NEM blockchain. As opposed to simply using it for sending payments, you can now set, define, and own a specific space on the NEM block. This means that your enterprise will be searchable by users on the network. You can even add subdomains so that the enterprise can be easily identified in the network.
- NEM has embarked on a great mission of bringing in a lot of partners. While other cryptocurrencies are seen as competing entities by financial institutions, NEM is different. While working on different levels of anonymity, it has embarked on a path of enriching financial institutions’ operations. This is one of the greatest pillars that are anchoring NEM’s rapid growth.
- NEM is a community-based and fully owned project. While other cryptocurrencies such as Ethereum and DASH are associated with specific figures, NEM is directly owned by the community. From the beginning, the UtopianFuture makes all people in the crypto world to feel part of the NEM’s growing popularity. This ownership has helped to solidify NEM support and make it a formidable force that could challenge other big cryptos such as Ethereum and Bitcoin.
- NEM is a smart asset blockchain that allows users to deploy their contracts as layers to the main network. Users are allowed to define the terms and rules of running their Mosaics to drive enterprises at faster rates. But the smart assets are run separately with the blockchain to enhance the security of the network. This means that unlike the Ethereum’s smart contracts that demand a fork in the event of a failure, only a single contract can be affected. Even in such cases, the affected contract can be cured and rerun.
- The NEM network is one of the most secure systems in the cryptocurrency world. The network uses multiple levels of protection such as encryption, consensus mechanism, regular updates, and special proof-of-importance to keep all users as secure as possible.
What Are the Risks of NEM?
When you join the NEM network, there are very many benefits. You can easily customize the blockchain to carry multiple tasks in your enterprise faster and at a lower cost. But, like other cryptocurrencies, NEM network is not without its share of risks. Here are the main ones that you should be cognizant of.
- The danger of losing your NEM wallet keys
- When you acquire the NEM wallet, you have total control of the private keys. These are the identifier codes that allow you to log in and initiate transactions. As digital wallets, the keys are not immune to getting lost. The computer with the installed wallet can get lost and make the XEM inaccessible. If you did not have a backup, the chances are that the XEM will be lost forever.
- Risk of being involved in fraud
- If you use a bank to make cash transactions, the system requires that both the sender and receiver are vetted with extra care. It is very difficult for the bank to send cash to a criminal or for illegal activities. However, all the users in the NEM network are completely anonymous. Because they can hide behind the network, it is very easy to get involved indirectly in fraud. A trader who steals and sells the items through the NEM network can never be identified. The buyer will also be involved in fraud because he has advanced the crime without knowing.
- The NEM network does not have consumer protection
- By close of 2017, there was no country that had a legal framework to guide the application of NEM. This means that the NEM network is like a jungle. If you lose, there is nowhere to go and no one to complain to. While the NEM developer team keeps working on new codes that can help to prevent intrusion by attackers, the responsibility of taking care of the NEM wallet and stored XEM is actually personal. You have to pick a good wallet, keep all systems updated, avoid sharing private keys, and always triple check the address before sending crypto coins.
- The danger of high volatility
- The value of NEM grew progressively between launching and end of 2017 to hit $ 0.8. However, NEM has demonstrated it is still prone to changes that occur in different niches. When a cryptocurrency exchange was hacked and thousands of coins stolen in South Korea early in December 2017, the NEM and other cryptocurrencies’ value slumped. A similar fall in value was reported when China banned ICOs (initial coin offering) and during the DAO attack on Ethereum network. This shows that though the value of NEM has continued to rise, it can easily tumble at the slightest impact on the market.
- Anonymity related risks
- All cryptocurrencies operate in great secrecy. In fact, most of them including NEM are rated based on the ability to keep transactions as private as possible. Because of this anonymity, it is very difficult to reverse a transaction when XEM are sent to the wrong address. Even if you had invested heavily in harvesting, there is no way to know the recipient or recover the lost XEM.
- The looming regulations
- The cryptocurrency networks are a great disruption to centralized authorities. The governments are particularly agitated to see the blockchain networks redefine the currencies and cut important sources of taxes through banks. This is what has made some governments such as Russia and China to ban activities related to cryptocurrencies such as ICOs. Most countries are working on laws that will regulate operations of NEM and other cryptocurrencies. When these laws finally come to effect, there is a risk that NEM will be affected negatively.
What Happens if NEM Gets Lost?
Many people have been wondering what it means to lose NEM. Like we pointed in the NEM wallet's section, XEM are digital coins. It is simply software! Therefore, losing NEM is different from literally losing the conventional coins or notes. Losing XEM means that you have either sent the coins to the wrong person or cannot access the private keys.
If you lose NEM because they have been sent to wrong address, it means that they are still in circulation. However, they will be under a different owner. Note that there is no way to reverse the transaction. Once XEM have been sent to wrong address, they are lost. That is it; gone forever!
If you lose NEM by misplacing the private keys or losing the wallet, it means that the coins will still be in the NEM network. However, they will always remain in a dormant state because no one can bring them to live apart from you.
The NEM regulation has been a thorn in the fresh of many administrations for a few years. But it is not NEM alone. All cryptocurrencies are viewed with great suspicion. After Bitcoin was launched in 2009, FBI (federal bureau of investigation) pointed that it feared the network could be used to fund terror groups. However, no regulation has been passed to guide, recognize, or facilitate the use of NEM and other cryptocurrencies.
The NEM-governments conflicts
The main role of central administrations such as governments is ensuring that law and order are maintained all the time. The governments also target advancing their economies to enhance growth and success. These objectives are mainly realized through supporting innovation, industrial growth, and promoting employment using money collected from taxes. This is where the NEM new blockchain gets into conflict with governments.
Cryptocurrencies such as NEM targets bypassing the centralized organizations through peer-to-peer model of operations. The direct operation model is bound to attract more people because it is prompt, reliable, easy, and cheaper compared to the standard system of sending money via banks. But the implications are monumental. At the end of the day, banks might have to scale down or close, lay off staff, and reduce the taxes paid to governments. Some people have been asking; why do governments fail to regulate cryptocurrencies? The governments are caught between a rock and a hard place when it comes to drawing regulations that can net cryptocurrencies appropriately. Here are some reasons making governments lag behind.
- The governments are forced to play catch-up with cryptocurrencies. Most of them do not know where to start when it comes to regulating blockchain technologies.
- The blockchain technology comes with numerous benefits that can be harnessed to spur growth. For example, the problem of Big Data is addressed comprehensively through blockchain technology. Therefore, it becomes difficult to put a lid on the technology that is actually showing signs of addressing a problem bedeviling the governments for years.
- The blockchain networks such as NEM are not owned by a single entity. This means that there is actually no real face to target with regulations. For example, the NEM network is owned by anonymous nodes spread across the globe. Even if you regulate the network in one country, it will still buttress in other countries.
- The technology used in NEM and other cryptocurrencies is molting very fast. For example, when Bitcoin was launched, it applied the proof-of-work algorithm. New technologies such as proof-of-work, proof-of-stake, and now Proof-of-Importance in NEM have entered the field. Even if you regulate one technology, it will simply mutate into another more complex one in the future.
Is NEM Legal?
Since 2009 when the blockchain technology was pioneered by Satoshi Nakamoto, all cryptocurrencies are viewed with a lot of suspicion. Most governments see them as disruptive and hidden hands to cripple their operations. This is the case with NEM. However, none of the jurisdictions in the globe has passed regulations to guide operation, use, or application of cryptocurrencies. This means that NEM is legal.
To understand the complexity of NEM regulation, let us take a closer look at individual countries. Notably, most of the counties have indicated their intent of passing legislations that will guide development, application, and use of cryptocurrencies.
1) The United States
- NEM is legal in the US. The US had not passed any legislation that defines the legality of NEM and other cryptocurrencies in its jurisdiction. It is only the CFTC (Commodities and Future Trading Commission) that has come out to provide a guideline on how NEM should be viewed in relation to tax. CFTC classified NEM and other cryptocurrencies as commodities. This means that any gains from trading or exchange are subject to capital gains tax. The view is considered to be the main direction, US is likely to follow when drawing cryptocurrency regulations.
- Russia has indicated that it is not willing to pass any cryptocurrency regulation. Though NEM remains legal and traders are free to use it, they have been cautioned that it could be illegal. The Deputy Finance Minister has indicated that they are contemplating imposing heavy taxes on NEM and other cryptocurrencies operating in its jurisdiction.
- NEM is legal in Japan. By the close of 2017, the Japanese government indicated that there was no legislation that prohibited people from using NEM and other cryptocurrencies for trading services or products. The administration pointed that The Banking Act and Financial Instruments and Exchange Law does not in any way prevent people from using NEM. This has spurred frenzy in some areas such as Hirosaki that have started accepting cryptocurrencies from tourists to spur growth.
4) The European Union
- By close of 2017, there was no regulation in the EU to guide NEM and other cryptocurrencies. However, the approach taken by the EU is considered more positive compared to other countries such as China and Russia. EU has pointed that blockchain technologies used in NEM and other cryptocurrencies are highly advanced and should be studied carefully. A task force has been set to study NEM, Bitcoin, and other cryptocurrencies with a view of creating a guiding framework that will help benefits to trickle down to more people.
- NEM is legal in China. Like the US and other countries, there is no legislation that guides or touches on NEM and other cryptocurrencies. However, China has been extra cautious and vocal on the cryptocurrencies and even closing-related activities. In mid-2017, China closed one of the ICO (initial coin offering) that made prices of NEM and other altcoins nose dive.
- China and its affiliated jurisdictions such as Hong Kong and Taiwan have opened new monitoring lines that target to identify and isolate cases of fraud using cryptocurrencies. They have vowed to be ruthless and even threatened to close entire blockchains if they find them being used for illegal activities.
From these demonstrations, one thing comes out clearly; every government is looking at ways of regulating NEM. The status quo is creating a roadmap that can help draft comprehensive legislation to avoid halting government operations.
Though it is tricky and indeed complicated, there is no doubt that looming legislations will finally dawn. The regulations are likely to mainly focus on taxes and application of blockchain technologies with a view to transforming them into cash cows.
One of the models being proposed by the Federal Government in the US is tying the blockchain technologies to FATCA (Foreign Account Tax Compliance Act). This legislation passed after the 2008-2009 economic recession makes it mandatory for Americans to reveal cash stored in foreign jurisdictions. By forcing people to reveal their status in NEM without denying them the ability to use the network, it is thought that the US can continue netting taxes from blockchain use without suppressing tech advancement.
NEM and Taxes
The notion of taxes and cryptocurrencies has been very complicated since Bitcoin ushered the first blockchain network. Many people have been wondering whether they are free to run away from banks and operate without paying taxes. How should you go about it?
How to go about NEM and taxes
Though the notion of taxes and application of blockchain technology remain a gray area, it is important to act smart. Tax experts recommend that people using NEM networks should treat any type of income as taxable income. While it is true that you are anonymous in the NEM blockchain network, you cannot deny that future technologies can easily unmask your identity and place you in an awkward situation.
Recently, the US Commodity Futures Trading Commission (CFTC) argument that NEM and other cryptocurrencies be treated as commodities is a pointer of things to come. When you make some returns through sale of XEM, it means that the accruing profit is taxable. But this could only be a tip of the iceberg of things to come. Many countries that often look at top economies to pioneer such tax legislations are likely to follow suit.
In Israel, the government expressly indicated that any returns arising from holding or trading cryptocurrencies is taxable. In Japan, the government indicated that though the Banking Act and Financial Instruments and Exchange Law does not prohibit the use of NEM and other altcoins, all the taxes are applicable.
Expert advice on staying the right side of the law on NEM and taxes
The current situation only acts to fuel mixed reactions from people who are torn between paying taxes or not. But how can one be assured of being on the right side of the law now and even after legislations are passed?
- Ensure that all the transactions are captured and stored appropriately. This is especially crucial for those using NEM networks to run their business operations.
- When you trade in XEM, ensure that the ensuing profits are taxed appropriately. This means that if the law hits hard on those using the NEM network for tax avoidance, you will be on the safer side.
- Always capture the dates of transactions including the value of the local fiat currency. If you are in the US trading NEM, capture the corresponding value in dollars for easy computing.
- Remember to be on the lookout for the coming regulations. Depending on the nature of the expected regulation, you might find it ideal to offload some XEM to avoid making huge losses if the laws cause a negative impact on NEM value.
- Do not hesitate to seek advice from experts in financial and blockchain technologies about taxes. This will help you to always stay ahead and avoid conflict with the law.
Does NEM Have a Consumer Protection?
Since cryptocurrencies debuted in the globe, the notion of consumer protection has been murky. The fact that they operate anonymously means that there is no direct entity to drive the wheel of consumer protection. In the same line, NEM does not have consumer protection. Like in Bitcoin, NEM founders are anonymous with only speculations about their identities.
The closest that NEM comes to forming an organized supportive framework is the NEM foundation. However, even the foundation indicates that it is simply interested in promoting NEM to advance its ideals but not as owners. This means that in the event that you send XEM to the wrong address or have an issue about the transactions, there is no one to complain to.
Like other cryptocurrencies, all decisions are made by the nodes or users spread in the network. This means that you need to be extra vigilant when using the NEM network. Because there are no regulations, it is important to appreciate that loss or concerns cannot be addressed by any office or a court of law. To stay protected when using NEM network, here are some crucial things that you can do.
- Never share your wallet private keys with other people.
- Before sending XEM, always triple check the target address.
- Your personal computer, the NEM client, and the NEM wallet should always be up to date.
- Consider storing your XEM in cold storage to stay away from hackers.
- Designate one computer for NEM operations alone. This is especially crucial for those with handling high XEM volumes or doing intensive tasks such as harvesting.
- Always pick third party service providers such as cryptocurrency exchanges and brokers with great care. You should particularly select the platforms with no history of hacking.
Illegal Activities with NEM
Cryptocurrencies are preferred by criminals because they provide cover to their identities. While some cryptocurrencies have made this possible by failing to implement strict policies for their users, it is different at NEM. To run as supernodes, users are required to demonstrate a lot of commitment and remain active. This makes most of them opt away. The rigorous verification model also makes it impossible for scammers to reside or run ponzi schemes in the NEM network. It is because of this commitment that no illegal activity with NEM had been reported in by the close of 2017.
Is NEM Secure?
NEM is one of the most secure cryptocurrencies in the world today. The target of the cryptocurrency was to elevate the level of security and anonymity higher than that of existing cryptocurrencies. This can be credited with the fact that there has not been a single case of successful hacking on the network. Here are the main levels of security in NEM that makes it more secure.
- It operates in a two-tier architecture: This design has made it impossible for hackers and intruders to break into the core code of the cryptocurrency. The two-tier mode comprises of NCC (NEM Community Client) and NIS (Network Infrastructure Server) that connect secretly and start saving transactions. Because the transactions are saved without downloading the blockchain, NEM is both faster and more secure compared to other cryptocurrencies.
- NEM utilizes advanced cryptography to secure all transactions: The moment you install the NEM Community Client, all the details and transactions are completely encrypted to ensure that no one can know your identity. Even the harvesters can only confirm the details without knowing the details of the sender or recipient. The Elliptic Curve Cryptography guarantees users of higher security and speed.
- Regular NEM core code updates: The NEM developer team is perhaps the most aggressive in the entire cryptocurrency community. They are quick to respond to issues in the crypto world to prevent attacks and keep the NEM system secure. The latest of these updates is the Mijin version which NEM is working on in the last quarter of 2017 to be available in C++ for extra stability.
- A complex system of spam protection: Unlike in other networks where miners use expensive mining rigs to take advantage of the system and accumulate native coins, the NEM spam protection system helps to ensure equitable distribution. The supernodes that use more resources get more in transaction fees. The rise in fee is restructured only to the nodes with very high volume.
While NEM works extra hard to guarantee users of extra security for their operations in the network, it is important to appreciate that no cryptocurrency is completely immune to attacks. This means that you must take extra measures to remain safe. For example, you need to keep the NEM wallet completely updated and store XEM offline when not trading them.
Is NEM Anonymous?
The success of any cryptocurrency is dependent on the ability to operate anonymously. The NEM network is structured to guarantee users of extra anonymity all the time. First, all the details in the network are completely encrypted to guarantee extra privacy. Whether you are using NEM for fleet management or sending money, it is very difficult for others to figure out your identity.
The NEM two-tier architecture allows users to select the level of anonymity they want. This means that you have the power to stay completely anonymous when carrying any transactions. The first tier is used by people in the network to access information. For example, the public information you want to be searchable in the network can be accessed easily by those in the network through Namespaces. However, the second tier adds a layer of security and removes some of the components in the first tier to make detail anonymous. This makes it a great option especially to run loyalty programs.
Has NEM Ever Been Hacked?
When the UtopianFuture called for a community-based cryptocurrency, they wanted to take the great advancements of other cryptos such as NXT a level higher. In 2012 and 2013, the reports of hacking and thousands of altcoins getting stolen were very common. This was a lesson learnt and well internalized. They, therefore, called for a completely new code that they could directly follow to keep users in the network extra secure. It is because of this focus that NEM network has never been hacked.
Remember that saying the network has never been hacked does not mean it is immune. Rather, the developer team works extra hard to ensure that the code is safe all the time. Besides, they are always on the lookout for issues even in other cryptos and adjusting appropriately to make it even more difficult for hackers to break in.
How Can I Restore NEM?
If you lose XEM, the chances are that they are gone forever. However, it is possible to restore them depending on the efforts you had taken before XEM loss. If you had installed a wallet backup, restoring XEM will be relatively easy. You will only need to reinstall the wallet and reconcile with the network using the private keys.
For those who did not have a backup wallet but had generated and stored the private keys seed phrase, the process of restoration will be equally simple. You only need to download, install a new wallet, and reconcile them with the old credentials of the previous one. The XEM network will directly reconcile the system and restore your XEM.
The notion of restoration means two things. One, you must always be prepared for eventualities. Even if the private room is not accessed by other people, appreciate that it is still possible to lose the wallet, private keys, and XEM. Two, you must keep a backup of the wallet. The backup should include the wallet and the private key seed phrase.
One more thing! You must always triple check the payee address. This will help to reduce the risk of sending XEM to the wrong people.
Why Do People Trust NEM?
Between 2009 when Bitcoin was launched and 2017, it is about 8 years. But Bitcoin only opened the gate to the world of endless blockchain designs and applications. Even in the midst of plenty, many people have openly demonstrated their trust in NEM. Here are the main reasons why people trust NEM.
- A very vibrant NEM foundation: Though NEM foundation takes the outfit of a non-profit organization; it is at the forefront in addressing every emerging issue. This has made people to see it as the direct manager of the network.
- NEM has a vibrant developer team: The NEM development team is very active in ensuring that new versions and updates are done on time to keep the network in top condition. It has also been active in introducing new features that make the NEM network more valuable compared to other cryptos.
- The value of NEM has been consistent since launching: Despite the myriads of challenges that were found on the way, NEM conquered them all to maintain progressive growth. Its entry into the top ten biggest cryptos by market capitalization has cemented the trust people have in it.
- The company uses multiple layers of security that makes hacking very difficult: Since NEM was launched in 2015, no case of hacking has been reported. This has been taken as a pointer of the zeal the lead team has in protecting the integrity of the system.
- NEM classifies the nodes so that only the supernodes are used in confirming the transactions: This method has helped to weed out jokers so that only the committed users operate on the network. The supernodes are incentivized to stay vibrant and help the network to grow.
History of NEM
The community wanted to create a fork of NXT before the idea was dismissed and an agreement arrived at to make an entirely new code. UtopianFuture committed to creating a community-driven cryptocurrency that everyone could own without feeling passive. NEM went through multiple phases with regular updates as it took shape and grew over time.
The NEM alpha and Beta version testing
The initial NEM alpha testing started in June of 2014. This version was intended to test how NEM would look and operate. In early March of 2015, a more comprehensive and lengthy NEM beta testing version was released. By the end of the same month, the NEM code was launched. This marked the beginning of a journey of fierce competition with other more established cryptocurrencies especially Bitcoin and NXT that were fast gaining a lot of traction.
Mijin and Catapult products
In the last quarter of 2015, NEM developers forged a partnership with Tech Bureau Corporation to run a private project referred as Mijin on the NEM’s open source code. The Mijin blockchain is perhaps the most complex system in the NEM network. It is a private blockchain product with functionalities operating like a bank, microfinance ledger, and a complete electronic banking platform. All the features have been tested with multiple enterprises on an industry need-to-need cases. In Japan, different banks have tested the system and it has managed to hit 1,500 transactions per second with more than two million virtual bank accounts.
In April of 2016, NEM started another project with Tech Bureau called Catapult. This project targeted creating a new layer of blockchain called catapult that will augment the latest Mijin version. The main features of Catapult include greater throughput, stability, flexibility, and migration from Java to C++ for network communication optimization.
Catapult is particularly preferred because of its 3 crucial features; private partially permissioned, public permission-less, and absolutely permissioned. It also allows greater inter-operability and sharing between multiple clusters of distributed ledgers.
Partnerships and rapid growth in 2017
The biggest selling point for NEM is its great appeal to both governments and private enterprises. In February of 2017, NEM entered into a partnership with ChronoBank to help modernize the recruitment sector. ChronoBank agreed to issue its Labor Hour tokens on the NEM network and even develop a wallet for NEM.
Early in 2017, NEM also announced its partnership with Ecobit. This is a conservation project supported by the Malaysian State Government. The project entails managing huge tracks of the rainforest for about 30 years. This partnership saw the value of NEM climb with 154% in March of 2017.
In 2017, NEM popularity continued to rise, and its growth hit 500%. The cryptocurrency is particularly popular in Japan as locals in Japan and the entire Far East consider it their own because it is developed by one of their own.
Who Created NEM?
The people behind the creation of NEM have never been revealed. A group that called itself UtopianFuture was the face associated with the creation of NEM after getting inspired by NXT. When the group started operating, they molted into the NEM developer team before folding off completely as the NEM foundation took over most operations.
Though many people believe that the people in the foundation especially the president, Mr. Long Wong was among the founding members, there is no evidence linking it to them. The foundation is a non-profit organization and serves as the main face that comes closest to unmasking the people behind the network. But it is always quick to dissociate with the network and only insist it is promoting the NEM ecosystem so that benefits can trickle down to all.
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