New Economy Movement Doubles in Price Within 24 Hours, Becomes 4th Currency by Market Cap
Bitcoin isn’t the only cryptocurrency exhibiting major price swings as of late. New Economy Movement (XEM) – a peer-to-peer cryptocurrency written in Java – has seen a meteoric price rise which doubled its price in a matter of 24 hours. XEM isn’t just another cryptocurrency, it is a rival to Ripple, and its node reputation system along with the proof of importance protocol are just some of the features that set it apart from traditional cryptocurrencies.
WHAT IS XEM?
At first sight, New Economy Movement looks like an ordinary cryptocurrency, but the reality is it has quite a few unique features distinguishing it from the competition. For example, XEM uses namespaces resembling the internet’s domain system which allows one person to register domains on the NEM blockchain and attach assets to them. Those assets are called Mosaics, which are customizeable by amount in either a fixed or a mutable quantity. Each mosaic gets a name that is under a unique domain in the namespace system in the format of subdomain.domain:mosaic.
Furthermore, XEM uses a Node Reputation System in order to ensure the blockchain’s health. By monitoring past node’s behavior, the consensus mechanism is able to place importance on a work done by a node. This ties into the proof of importance algorithm that is utilized by the cryptocurrency.
Unlike in Bitcoin which uses the proof of work mining system, where the amount of work done by a node is used as a measure to how well that node can protect the network. In XEM, it is the quality of work that is important.
Using the Eigentrust++ algorithm, which is a reputation management protocol for peer to peer networks – the NEM blockchain is able to determine the importance of a user’s node. The algorithm takes into account not only the amount of coins a node has in it’s possession, but also how many transactions were made. Unlike in the Proof of Stake system where users simply have to hold a large amount of coins to stake and receive rewards, in Proof of Importance users are encouraged not only to hold coins but to also carry out transactions.
There are also more features such as Supernodes, Multisignature Transactions, and block Harvesting which all set NEM apart from its competition.
WHY THE PRICE RISE?
Along with the latest trend of more investors looking into altcoins – also called The Flippening – there are a few key elements which are responsible for XEM’s doubling in price. First of all, just like Bitcoin, the cryptocurrency is extremely popular in Japan. Second, NEM’s integration of Mijin is a major driving force behind the price rally. According to Umar Alfarow – Community Communications and Marketer for NEM:
Mijin is NEM’s private chain project. It is built and licensed by the Japanese company Tech Bureau Corp., NEM’s strategic partner for permissioned-chain implementations. Mijin is currently in the process of being future proofed as a new 4-tier architecture design. Codenamed Catapult, it is being implemented and written in C++. The current end-to-end prototype has been independently tested by third parties at over 4000 tx/s.
As Ripple set the trend for slightly more centralized blockchains adhering to financial institutions, it seems that those that missed the Ripple train are looking to get in on another station. NEM is similar to Ripple in the sense that it is looking to bring cryptocurrency to major financial institutions. Investors took note of that, and once they realized NEM’s potential the buy orders started coming in.
Last night, NEM’s price was hovering at a steady 11 cents per coin. That price has been steady for the past month. However, last night some major volume appeared on exchanges sending the price to a high of 26 cents during the time of writing. This meteoric price rise places NEM’s market cap at $2.3 billion, ranking it number 4 right behind Ethereum.
It is also surprising that NEM has surpassed Litecoin by Market Cap which goes to show the trend among cryptocurrency investors is shifting towards more compliant altcoins. It will take some time to see if NEM’s recent price rise is yet another pump and dump or if investors really are seeing the potential of such currencies.