Unlike some cryptocurrencies, NEM leaves a complete audit trail of transactions. This is definitely not the coin for money launderers. The benefit to transparent transactions is that businesses can easily verify transactions and know who they are working with – a virtual requirement in the business world. This sets NEM on a path of wide adoption.
NEM has a few other great features and in this article, we’ll learn what they are and how you can invest in NEM.
What Is NEM?
NEM is a blockchain based alt coin. However, this isn’t the blockchain of old (i.e., BTC). NEM describes their blockchain as “The Smart Asset Blockchain.”
The organization behind NEM is the NEM Foundation, which was formed in 2015 and is based in Singapore.
The cryptocurrency for NEM is XEM. XEMs aren’t mined. Instead, they are harvested. All XEMs have already been created, which means XEM won’t experience inflation. In contrast, all BTCs have not yet been created, which means BTC experiences a small amount of inflation until all of its coins are mined.
NEM is ranked #10 on coinmarketcap.com. It has a current value of $1.02 and there are 8,999,999,999 XEM in its circulating supply. The supply of XEMs is described as 9B minus one.
How Is NEM Different?
NEM has designed a different blockchain, which allows businesses to interface with it. Traditionally, blockchains have been very difficult for businesses to interact with directly. NEM gets around this problem by exposing an API (application programming interface), which is based on RESTful JSON calls for the hardcore, for businesses to use. This is a common technique for software on different platforms to communicate. Once NEM receives data from a business through its API, it can then do the necessary processing to interface with its blockchain. This process goes in reverse when it needs to send data back to the business.
NEM’s API allows developers to customize their blockchain. This is where smart assets come in, allowing developers to create their own cryptocurrencies, reward points, tokens, smart contracts, notarizations and lots more.
As mentioned earlier, NEM uses harvesters instead of miners. Async miners, like those that mine BTC, take up a tremendous amount of energy. NEM harvesters, in contrast, can use a no-frills computer that isn’t even powerful. Harvesters are rewarded in XEM. The work of harvesters is to validate user transactions.
Transactions on the NEM blockchain are cheap, costing about $0.10 for 1000 transactions. These fees go to harvesters.
NEM’s blockchain allows users to send each other messages, which do cost but are also very cheap. For example, a user can send a message with their transaction detailing what the transaction is for.
Instead of PoW (proof of work) or PoS (proof of state), which is commonly used on other blockchains that mine coins, NEM’s blockchain uses a new concept called PoI, which stands for Proof of Importance. Basically, the more XEM a harvester has, the more XEM they will be rewarded.
How To Invest In XEM
There are more exchanges coming in the near future that will allow you to buy XEM. For now, we’ll have to use Bittrex.
Let’s walk through the process in detail.
1. Create A Bittrex Account
The first thing you need to do is setup a Bittrex account.
Bittrex is a popular choice because it allows crypto-to-crypto transactions from companies like Coinbase. It’s important to note that you can’t send money to Bittrex. You have to go to Coinbase -> Exchange (Bittrex) -> XEM.
So, you’ll always need two accounts:
Bittrex: which you can signup for here
Hopefully, this changes soon, but that’s how it goes today.
2. Buy Bitcoin or Ether on Coinbase
Once you have a Bittrex account setup, you need to buy Bitcoin or Ether on Coinbase.
It’s very easy to do once you have a Coinbase account setup. You simply go to the Buy/Sell page and enter your information. Then, your Bitcoin will be in your wallet and you can move to step 3.
3. Transfer Your Bitcoin To Bittrex
Once you have your Bitcoin or Ether in your Coinbase account, you can transfer it over to Bittrex. This is also fairly easy to do.
In your Bittrex account, go to your balances then wallets and you can see all the different coins you can hold in your account.
In our case, we’re transferring over Bitcoin, so click on Bitcoin, and you’ll see a Wallet Address generate. Here’s what most look like:
Once you have that address, you go back to Coinbase, choose “Accounts”, and then “Send.” You’ll see this screen come up where you can send your Bitcoin to the address generated in Bittrex:
4. Buy XEM
Once you have your Bitcoin in your account at Bittrex, you can finally buy XEM.
In your Bittrex account, execute the XEM/BTC (or XEM/ETH) exchange.
Once you place your trade, it will show up in your Bittrex account.
NEM is forward thinking with its ability to allow businesses to more easily access its blockchain through an API. Additionally, businesses can customize their blockchain to their needs.
With its harvest based approach to validity of the blockchain, NEM can scale more and transact faster than other cryptocurrencies such as BTC, which as of now is only doing a throughput of 2 to 6 transactions per second.
NEM has risen greatly in price since March 2017. It will be exciting to see which business partnerships NEM can bring on board in the future.
If you’re not sure about using a digital wallet and this whole process, and want to invest via an ETF, you can’t do it yet. However, there is a Bitcoin ETF – GBTC, and you can invest in it for as little as $5 on Stockpile. We’ll give you $5 for free when you sign up for Stockpile through this link.
Let us know your thoughts on NEM in the comments!
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.