THE NEM FOUNDATION
NEM stands for New Economy Movement and is a decentralized, peer-to-peer, blockchain centric, asset management application created to enable individuals and organizations in forming bespoke blockchain solutions related to payment processing and organizational documentation. It is also known as the first “smart asset” blockchain. As one of the oldest cryptocurrencies and also one of the most appreciated, NEM has a market value of over $15 billion.
In the words of its inventors, NEM and its cryptocurrency XEM are “a movement that aims to empower individuals by creating a new economy based on the principles of decentralization, financial freedom, and equality of opportunity.”
NEM was finally launched on March 31, 2015. Its concept was visualized earlier in 2014 in a forum (UtopianFuture) when its participants conceived of a genuine community-based project. Since then, NEM has brought about a large number of innovations in the cryptocurrency space, some of which include the following:
· Proof of Importance (PoI) — An algorithm that more justly rewards users who manage and verify transactions, than Proof of Stake (PoS).
· Delegated harvesting — A form of mining procedure that enables accounts to rent harvesting capacity to other accounts.
· Encrypted messaging.
· Approved private blockchains
· An API interface that is compatible with all programming languages.
· Network node reputation structure.
Compared to Bitcoin’s 10-minute block time for validation, NEM takes 60 seconds and is ideal for real-time transactions and payment processing. Using a private installation of NEM, speeds of thousands of transactions per second are possible.
Smart assets
Because of its “smart asset system,” NEM can work with any application. NEM’s technology enables multiple ledgers to cohabit a single blockchain. With a secured blockchain, transactions are managed by means of a worldwide network of nodes operating the NEM fundamental software. The network is utilized as an API Gateway server. The advantage here for developers is that they do not need to operate specific NEM software, as all its usability exists via API calls. This allows more flexibility with system design and with the number of apps that utilize the NEM system. Applications have direct admittance to the NEM system, as well as connecting to a distinct server while making NEM requests. NEM can also be used in the background by existing servers.
Public and Private blockchains
Organizations have two options when it comes to using NEM. A company can install NEM in-house for the purpose of having an entirely private blockchain, or it can utilize the public NEM blockchain if it doesn’t need to individually host the whole blockchain or interrelate with the other services there. Private blockchain usage allows control of complex programs and logistics while keeping transaction data private. Top-notch security and speed are the advantages here.
Proof of Importance (POI)
PoI is one of the foremost innovations designed by the NEM creators for blockchain technology and its usability. Employing a unique algorithm, it is used to access network theory in allotting a rating to each account in terms of importance. In comparison, other blockchains utilize Proof of Work (POW) or Proof of Stake (POS) to apportion rewards. NEM creators view PoW as unfair, as the higher the computational capacity, the higher the advantage. Also, high-power based systems amount the higher bills for users, as well as polluting the environment. Similarly, PoS favors those with more coin capacity, in terms of reward distribution. PoI awards more justly by using an algorithm with 3 unique types of capacity. These are:
a) Vested stake: PoI tallies coins that have existed for a number of days in the account, with 10% of the existent (unvested) amount bestowed daily. The more coins that are vested will amount to a bigger PoI score for the account. Also, a minimum limit of 10,000 vested coins are needed to begin harvesting.
b) Transaction partners: Those who transact with other network users get rewards. Thus, a unique method of allotting network scores based on transactional activity. There is no advantage for users who trade between a number of accounts, as only net transfers are considered over time.
c) Number and Size of Transactions in the past 30 days: Passing a minimal requirement, each transaction adds to one’s POI score, with more chances of block harvesting and reward collection. Larger scores mean bigger and more recurrent transactions, thus making usage of XEM an advantage and incurring of lowered NEM transaction fees (which are low enough already)
Conclusion
NEM has a remarkably efficient system and is a top contender in the blockchain-run economy. Its advantages are its great flexibility, developer-friendliness and the singular PoI function that often makes it a first choice for individuals and companies alike.
