Back at the start of November, NEM (XEM) tokens went for around $0.18 a piece. Fast-forward a few weeks and the coin now looks set to hit a dollar a piece very near term. Market capitalization is closing in on $5 billion and the token is now in the top 10 by market capitalization as per value aggregator CoinMarketCap.
All this activity has translated to a large degree of financial news media attention, both within the bitcoin and blockchain spaces and from a mainstream perspective and this, in turn, looks set to contribute to further appreciation near term.
The question now is, are these gains fundamentally justifiable and, in turn, is there any advantage to picking up an exposure to XEM at current prices (i.e., on the back of the recent run) in anticipation of further appreciation?
Let’s try and answer that question.
First up, for anybody not familiar with NEM or XEM, let's introduce both. NEM is the name of the technology and, specifically, the blockchain, that underpins the NEM platform. XEM is a cryptocurrency built on this blockchain that is designed to be used as a value exchange/payment token and a store of value for the range of applications that can be built using NEM architecture.
That sounds a little bit complicated but it's not.
Blockchain technology has the potential to revolutionize pretty much every aspect of global industry but, as things stand, the current applications of blockchain technology don't integrate very well with existing enterprise solutions. Additionally, it's not that easy to build blockchain technology-based applications on existing legacy blockchains, even those such as the Ethereum platform.
An in-depth coding knowledge is required and, even if a developer is to achieve a successful build-out, the chances of their application struggling to cope with volume and energy demand as the application scales are high.
NEM seeks to change this by offering what amounts to an API driven application creation platform that can integrate both with the public NEM blockchain and can also integrate with private (so, for example, enterprise-based) blockchains. This not only allows for a dramatically increased level of security but also an incredible amount of flexibility – something that the current technologies just don't offer.
This flexibility is rooted in what the company calls Smart Assets, which are a sort of upgraded version of the Smart Contracts associated with the Ethereum platform. Each Smart Asset is made up of Mosaics, which are fixed assets on the NEM blockchain that can represent a set of multiple identical things that do not change – reward points, shares of stock, signatures, status flags, votes or even other currencies.
These Smart Assets, as defined by the Mosaics they contain, can then be put into action through Transactions. These Transactions allow for the transferring of Mosaics between Addresses, the transferring or configuring of ownership of Addresses (including the use of Multisig rules), sending messages and more. Finally, all of this is automatically and accurately time stamped using the NEM blockchain.
To put all this another way, NEM is akin to a next-generation Ethereum, taking the principals and concepts of the latter and building on them to improve both applicability and scalability.
So why is the coin running now?
Well, there is a major upgrade to the software that underpins the whole system due very near term called Catapult and this upgrade should serve to pave the way for a whole host of fresh partnerships with enterprise entities globally. Right now, a number of these partnerships are already in place, primarily in Japan, but Catapult will expand NEM's reach and could potentially be a game changer in terms of adoption.
Getting back to the initial question, then, is the recent run supportable and, in turn, is this one worth a look at current prices?
In a nutshell, yes. This upside revaluation reflects a number of core fundamental developments for NEM and the recent upsurge in activity should help the company leverage awareness and use it to drive further appreciation ahead of, and beyond, Catapult.