MEM (XEM) – The crypto market is at a critical point, and prices are a pale shadow of their December highs. So what’s the future of this market? To understand its future, you need to understand the issues facing it at the moment. The first issue that is facing this market at the moment is that of hoarding.
Cryptocurrencies are trying hard to be accepted as currency, but hoarding is making that almost impossible. Cryptos are so speculative that no one wants to spend theirs, out of the fear that prices might shoot up in the future. No one wants to be like the guy that bought pizza for 10,000 bitcoin. Unfortunately, the market can only grow if people start spending their cryptos. Otherwise, volumes will decline over time, and will eventually dry up. It’s probably the reason why Litecoin is encouraging crypto spending, using the #paywithlitecoin hashtag.
The other problem facing cryptos at the moment is that of centralized mining. Crypto in its true essence is supposed to be decentralized. Unfortunately, this is not possible with the proof-of-work mining that is employed by bitcoin and many other cryptos in the market. Proof-of-work simply gives control to those who have the money to buy mining equipment. While the prove-of-stake algorithm was thought to be the solution for this problem, it has simply created another problem. Prove-of-stake has created the problem of hoarding, which we have discussed above, thereby defeating the whole essence of cryptos as currencies.
So what’s the future? How can we ensure that the crypto market stays liquid, while at the same time keeping it fully decentralized? The answer lies in the model that is used by NEM (XEM). NEM makes use of a mining algorithm that known as the proof-of-importance (POI).
Proof of importance rewards people who hoard coins, just like it is done in the prove-of-stake mining algorithm. However, under proof-of-importance, you are only required to hold coins in your wallet for only a few days. On top of that, you get to earn a percentage based on the unvested (free and spent) coins. In other words, this model encourages you to spend your coins. In the case of NEM (XEM), you get to earn 10% of your unvested coins.
If all other cryptos were to adopt this model, we would see a massive increase in crypto volumes. That’s because people would be spending their coins, and not just hoarding, hoping that prices would rise in the long-run. Spending coins would also stabilize prices, and make cryptos more acceptable as money. It’s actually the reason why so many people were interested in Litepay, before things went haywire.
Now that we know the power of the proof-of-importance model, I believe NEM (XEM) is a fundamentally sound crypto to invest in. Other than its technical capabilities, its mining model will shape the future of the crypto market. On this basis alone, it won’t be far-fetched to conclude that NEM (XEM) is highly undervalued at the moment. It’s a trailblazer!