NEM vs. Alternative Cryptocurrencies: Which is Best for Long-term Speculation?
Before investing long-term in any cryptocurrency, it is best to create a portfolio with each cryptocurrency you are considering and compare them.
While this article focuses on NEM due to its intriguing potential, I recommend that you perform your own research and make a well-informed decision.
About NEM
NEM is particularly efficient, making it one of the most important factors in its favor. Unlike cryptocurrencies like Bitcoin that are mined and require significant energy, NEM does not have mining, reducing energy consumption to a negligible level. Some analysts and experts believe that NEM could be 100 times more efficient than Bitcoin. Additionally, transaction fees are extremely low, perhaps even a few cents, while transaction times are incredibly fast, usually taking only 4-5 seconds. This allows NEM to handle dozens of transactions per second without needing to wait up to 10 minutes as with Bitcoin.
Another significant advantage of NEM is its virtually non-existent inflation risk. Since all NEM coins were issued on the first day and there will never be more, the risk of inflation is minimal if not non-existent. However, it is important to note that for other cryptocurrencies, you may want to visit their websites for more detailed comparison.
Why Invest in NEM Long-term?
While the information provided here is not financial advice, I am personally invested in NEM/XEM, and here are some reasons why I believe NEM has the potential to outperform Bitcoin in the long run:
Blocktime/Transaction Time
Many people using Bitcoin have experienced its slow transaction times, often taking up to 10 minutes for confirmations. This is particularly disadvantageous in a world of instant transactions. NEM transactions typically take 60 seconds or less most of the time. To verify this claim, one could simply time a Bitcoin transaction and a NEM transaction.
Proof of Work (PoW) vs. Proof of Importance (PoI)
The cryptocurrency world has various methods for miners to receive rewards. Bitcoin uses ‘Proof of Work’ (PoW), where those with more computational power have a higher chance of receiving rewards. This leads to centralization as large mining groups can dominate the market. Such centralization can be concerning, especially when considering the power they might hold over the world’s computing resources.
In contrast, NEM uses ‘Proof of Importance’ (PoI), which considers not just the amount of computational power but also the actual holding and activity of XEM. This allows more regular users to participate in the rewards. Also, NEM does not consume as much electricity for mining as Bitcoin does.
Strong Support Despite Lack of Brand Equity
While Bitcoin benefits from a lot of hype and has widespread recognition, NEM, being a less recognized currency, still manages to have a strong community. Despite lacking a celebrity-derived brand equity, NEM has a robust development team and over 100 original code lines, distinguishing it from other forks. Its current position as the 5th largest market cap without significant marketing or celebrity backing speaks volumes.
Further Reading and Resources
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