What is NEM?
New Economy Movements (NEM) is a relatively new decentralised peer-to-peer cryptocurrency that was launched in 2015. It allows you to perform instant money transfers globally at low costs.
Unlike the majority of other cryptocurrencies NEM does not use source code based on other cryptocurrencies. Where Litecoin has derived from Bitcoin, NEM has developed its own code, introducing brand new features and technologies into the blockchain community.
Walkthrough Video that Explains How to Buy NEM Online
What is so special about NEM?
What makes NEM so unique is it operates using a Proof of Importance (POI) algorithm rather than proof of work (POW) that Bitcoin uses. POI is used to time stamp transactions and helps to determine the user who is going to calculate the next block. It guarantees fair distribution of chances to create blocks and rewards those who make the biggest contribution to the currency development and distribution.
Creating blocks is called harvesting. The fees collected from the transactions in the block are transferred and rewarded to the harvester. To be a harvester you must have over 10,000 NEM coins (XEM), this helps protect from hackers.
In terms of transaction time it is one of the fastest cryptocurrencies on the market, often taking between 15 - 60 seconds. Which is comparably 10 times quicker than Bitcoin, which means NEM can run and validate more transactions in less time.
With the current script NEM can validate 3,000 transactions a second but as I write this they are developing a new version that will be able to process 4,000 a second. This shows the scalability potential of this currency.
- It has a message system, meaning you communicate with the person on the other side of the transaction.
- The nanowallet gives a private key and backup of the wallet.
- NEM is also one of the cheapest cryptocurrencies offering a 0.01% transaction fee, considerably cheaper than its competitors.
- ZERO inflation. All 8,999,999,999 XEM were issued at the coin launch.
Should I buy or trade NEM?
Given NEMs relatively short life it has managed to climb into the top 10 cryptocurrencies for market capitalisations, which is no mean feat. It currently does not have the largest trade volume but with its POI algorithm and willingness to reward people for higher transaction volume, it points to this increasing in time.
With cryptocurrencies that continually create new coins, based on supply and demand, their value should reduce as the supply is increasing. NEM does not have this problem, all 8,999,999,999 were issued at the coin launch and so NEM is not affected by inflation.
NEM has traceable transactions unlike other cryptocurrencies that offer anonymity. Should this technology ever be adopted by governments, central banks or other leading institutions, the chances of them taking on a technology that cannot be traced I would suggest is slim to be polite, but near enough zero. Again, pointing to a positive if you are looking to buy NEM.
There are definitely ample opportunities when you are looking to trade NEM. Like all other cryptocurrencies, volatility is high and appears to be increasing. Although volatility is associated with risk it also offers trader opportunities to take advantage of price movements.
You can currently only trade NEM through crypto exchanges rather than as a derivative. This means you cannot sell short because you are not leveraged by a broker. Therefore looking for areas to buy is the key.
Brokers are becoming more relaxed to cryptocurrencies and we're seeing some of the more established cryptocurrencies being available as CFDs. Brokers are targetting the coins with high liquidity, because of the high volatility, low liquid products could pose a risk for them.
There are plenty of exchanges that offer NEM nowadays.
How to buy NEM online - step by step guide:
NEM is becoming a firm member of the top ten in the crypto market cap table, comfortably in at number 7 and it hasn't moved out of the top ten for some time now. This shows the strength of the coin and I wouldn't be surprised to see it becoming available on more well established exchnages that allow you to directly buy cryptocurrency with fiat currency.
Until then however, you must go through a two step process to buy NEM. Firstly you need to buy a more established coin, in the example below we will be using Bitcoin as its the market leader.
Before you can own any NEM, you need a NEM wallet. The purpose is the same as a cash wallet - to store your currency in. You will be given an address to your wallet where people can send NEM to.
To buy NEM you must:
- Buy another cryptocurrency to trade for NEM. In this example we will use Bitcoin. An easy way to buy Bitcoin is using Coinbase, one of the largest and most trusted exchanges. Set up an account by entering your details.
- You will then be required to add a payment method, this is either via wire transfer or credit / debit card. Coinbase needs to verify your identity, which can take a little time due to the surge in users to Coinbase.
- Once you are verified you will be able to deposit into your account. This can be done in EUR, GBP and USD. Once funded you can buy some Bitcoin using the Buy/Sell button.
- Now you own some Bitcoin, you can then exchange it for NEM using any of the the various crypto exchanges. In this example we will be using changelly.
- Enter the correct cryptocurrencies you intend to exchange (Bitcoin for NEM) and changelly will calculate how much you are due.
- Enter your NEM wallet address into the space provided. When you opened your NEM wallet you will have been given an individual address.
- Confirm everything is correct and click confirm.
- The final step is to go back to Coinbase and send your Bitcoins to the person who sold you their NEM. You will have been provided with their wallet address, once in Coinbase go to your accounts and click the 'Send' button in your Bitcoin account.
How to buy NEM with a credit card
There are no direct methods to buying NEM using a credit card. Any methods that are available are likely untested aand so caution is advised when using any of these.
The safest way to buy NEM using a credit card is to go through exchanges that are proven and trusted. The likes of Coinbase and Coinfloor are both well regarded.
How to buy NEM with Paypal
PayPal once embraced digital currencies and allowed you to buy through its payment platform however now only gives the option of depositing money from the sale of Bitcoin into their accounts.
There is no real opportunity to use Paypal with NEM, other than to trade it for Bitcoin and then sell that for fiat currency.
How to Trade NEM
You can trade NEM by owning the actual product and transferring it between wallets with other owners. Trying to identify good areas to buy the currency and then selling at a better price is always going to be available on crypto exchanges. You will encounter different prices depending on the exchanges you use which also can offer arbitrage trade opportunities.
Brokers are beginning to jump on board the crypto band wagon. We are starting to see brokers offer cryptocurrencies as CFDs and other derivatives. This means you can trade some of the larger currencies on leverage, opening up this market certainly offers opportunities given the volatility of the crypto market.
Trading on leverage increases the potential returns as well as potential risks. If you decide trading CFDs is for you, risk management should become a priority when taking each trade. Stop losses are tools that will get you out of a losing trade before you receive a margin call from the broker.
There are plenty of brokers now offering cryptocurrencies as CFDs and other derivatives. AVA Trade is one who is highly competative in the field. To open an account you must -
- Go to AVATrade.com, you can sign up using Facebook, Google or the normal sign up form.
- AVA Trade like to make sure you are fully aware of the risks involved and so require you to fill out a form so they understand your level of knowledge. If they believe you do not have enough knowledge, they then provide you with education to get you up to speed.
- You will then be asked which account you would like to open. I would advise selecting 'Floating Spread Account' with MetaTrader4 (MT4).
- Once an account is selected you are then ready to fund your account. Your options are the same as Coinbase, you can either deposit using credit / debit card or using a bnk transfer. When you withdraw you funds, they will be sent the same way back to your account.
The future of NEM Trading
NEM, like other cryptocurrencies, has seen a huge rally in price in 2017. Bitcoin appears to be leading the way in this cryptocurrency rally, dragging lots of cryptocurrencies into the forefront of people attention. With popularity rising, and over 800 coins available, choosing which one will last the distance is the next problem.
With more and more progressive technology being created around blockchains, deciphering the next Bitcoin from the duds is where the profit is.
So, where does NEM fall?
The fact that NEM has developed its own unique source code has the potential to put NEM in both the 'Bitcoin' pile and 'duds' pile. Depending on how the code works and whether it is scalable. Because ultimately that is what you want, a cryptocurrency that can grow and grow quickly.
I think the future looks bright for NEM, the POI algorithm it uses is both clever and useful for security. The fact as well that they are currently in the process of developing an upgraded version to be able to handle a higher quantity of transactions per second suggest that they are excited by this and also that it is scalable.
It is one of the quickest and cheapest cryptocurrencies out there at the moment, which is certainly an attraction. It has a modern message system that lots of cryptocurrencies do not and it also does not get affected by inflation, which is a positive.
I do not see any major issues with NEM as a cryptocurrency, however for it to be sent out to the masses I would suggest it may be to complicated for everyone to understand how it works. When people don't understand they often don't like, this could stop people from warming to NEM.
The NEM website also needs refreshing, it should make it clear what NEM does and explain it in a clearer way.
The two points mentioned can certainly be worked on. If NEM can be easily explained then I think it has an excellent chance of growing.
I think NEM is an exciting prospect in the world of cryptocurrencies, its risks are similar to that of all the cryptocurrencies in that this bubble could burst. But if we see this continue, I think NEM could be a sleeping giant.
Cryptocurrency Guide list
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