At the beginning of January 2018, the NEM cryptocurrency was in the top 10 list, and its capitalization was $17B. But as a result of the prolonged market fall, the value of this cryptocurrency has decreased to $0.10, and today, the capitalization of the coin is fewer than $1B.
We will tell you what happened to the NEM cryptocurrency, and whether it will be able to return its high capitalization.
History
The idea of creating the NEM cryptocurrency appeared on the popular forum called Bitcoin Talk. It was planned to fork the NXT cryptocurrency, but its concept gradually developed, and the result was a new project, with its own source code and the slogan “New Economic Movement”. Get it? NEM?
The NEM network was launched in the spring of 2015, but it could not enter the market leaders until the summer of 2017. Then, there was the first news about the NEM tests and developments by Japanese companies, as well as the launch of a test network for bank transfers. And in December 2017, the NEM developers announced the integration of their wallet into the WeChat messenger which had an audience of almost one billion users. A day after the announcement, the price rate had increased by 150%.
But 2018 was not a good year for NEM. At the end of January, $400M worth of NEM coins were stolen from the Japanese crypto exchange called Coincheck. Then, in April, the President of NEM Foundation Lon Wong and Vice President Jeff McDonald both resigned at the same time. It was officially announced that they would remain in the project as advisors. They have decided to focus on expanding the NEM usage in the business sector.
In may 2018, the long-awaited release of Catapult update took place, which made the blockchain faster, more secure and convenient to use. But the positive effect of this news was offset by the continuing decline in the cryptocurrency market.
Directing the Development
The NEM blockchain is based on three development directions, which ought to become the driving force of the new economy.
The first is a user payment system that provides high-speed transfers and minimal fees. It can be used both by individual users and banks. In this regard, NEM is somewhat similar to the Ripple cryptocurrency.
The second direction is smart contracts. In the NEM network, you can hold ICO, run your own apps, tokenize assets and create systems for managing them.
The third feature of NEM is the ability to run corporate blockchains. This is a unique offer for the business, which gives companies the opportunity to launch their own private networks interacting with the public NEM blockchain.
NEM Mining
The NEM platform uses an original mining model which is called harvesting. The network operates on a Proof-of-Importance algorithm. It is a modified mining algorithm based on Proof-of-Stake.
Proof-of-Importance is different in a way that in addition to owning a cryptocurrency, each miner has a reputation and the more there is, the higher the chances of creating a new block. The reputation system takes into account various parameters, such as the cryptocurrency hold time, the transactions performed, the number of blocks mined, and so on.
Supernodes are the ones responsible for network maintenance. They must be constantly connected to the Internet, have at least 3M coins on an account, and meet certain technical requirements. These supernodes are connected to miners, for whom the mandatory requirement for cryptocurrency mining is possessing at least 10 000 NEM on the account.
The distribution of the mined cryptocurrency goes like this: supernodes receive a permanent reward for maintaining the network, while miners take away the reward for each mined block.
Conclusions
The capabilities of the NEM cryptocurrency and its level of technological development point to the great potential which can be useful for both ordinary users and business representatives. But for growth, NEM requires news of a new global partnership as it was when they partnered with the WeChat messenger. Unfortunately, that cooperation did not bring a significant expansion to the NEM usage.