What Is NEM (XEM)?
NEM (New Economy Movement) is an ecosystem of platforms that use blockchain and cryptography to provide solutions for businesses and individuals. XEM is the native cryptocurrency of NEM’s NIS1 public blockchain.
NIS1 operates in a similar way to Bitcoin (BTC): it has a network of distributed independent nodes that process and record transactions on a public ledger called “blockchain.” These nodes are incentivized to contribute their time and computing resources and remain incorruptible via transaction fee rewards; these rewards are paid out in XEM coins to each node that manages to add a new block of transactions to the end of the blockchain.
However, NIS1’s blockchain has a number of unique features that set it apart from Bitcoin and most other cryptocurrencies.
The alpha version of NIS1 — or NEM as it was known at that time — was launched on June 25, 2014, and its mainnet went live on March 31, 2015.
Who Are the Founders of NEM?
NEM was originally created by three developers known by their pseudonyms on the Bitcointalk.org forum: Jaguar0625, BloodyRookie and gimre. Since its inception in 2014-2015, NEM has grown from a personal project of three programmers to a large ecosystem composed of several platforms.
NEM’s overall development and promotion is now managed by NEM Group. NEM Group is a parent company designed to support the growth of the NEM ecosystem leading up to the launch of Symbol (NEM 2.0) and beyond. NEM Group was formed by a team of experienced NEM representatives and enterprise veterans who realized that a simplified structure would benefit the entire ecosystem, while also promoting more community input and engagement. The NEM Group Board of Directors is responsible for setting the strategy and budgets, and ensuring that all subsidiaries are working towards collective objectives. NEM Group comprises three separate entities: NEM Software, focused on the product and business development; NEM Trading, responsible for all finances, including liquidity management, exchange support and token lending; and NEM Ventures, the venture capital and investment arm, focused on strategic partnerships.
Primary features of NEM
- NEM Smart Assets are referred to as ‘mosaics’ and are similar to digital assets such as bonds and securities, but they are issued as cryptocurrencies or crowdfunding tokens.
- Delegated Harvesting is NEM’s alternative to mining. It allows account users with a minimum stake of 10,000 XEM to connect their account to a node and help produce blocks on the blockchain. Accounts communicate with one another to record and verify transactions and collect transaction fees in exchange.
- The proof-of-importance (POI) algorithm is the delegation mechanism that employs network theory to assign a hierarchy to harvesting accounts based on the quantity of stacked tokens, the number of transactions to other NEM accounts, and the magnitude and frequency of those transactions.
- Mijin is a platform that enables businesses to create and manage private blockchains on the NEM network that are unavailable to unauthorised users.
- NEM’s blockchain architecture incorporates the Eigentrust++ algorithm to preserve the PoI reputational architecture.
What Makes NEM Unique?
XEM is a decentralized open-source cryptocurrency that has a number of unique features.
Perhaps the most important of these is the way the NIS1 blockchain is secured. NIS1 uses its own proof-of-importance (PoI) algorithm — as opposed to the far more widespread proof-of-work and proof-of-stake — for the purpose of ensuring that transactions on the network are processed and recorded in a timely and honest manner.
Proof-of-importance allows anyone to run a node on the NIS1 network and facilitate transactions via a process called “delegated harvesting.” The system takes into account every node’s amount of already held coins, how often they transact on the network and who they transact with, in order to approximate their “importance score” in NEM’s economy. Based on this score, the nodes then receive a share of the fees from the transactions they have helped to process.
NEM claims that the proof-of-importance system ensures that the network can identify and reward those that actually use it the most.
In addition to its unique PoI algorithm, NIS1 also supports such features as multisignature account contracts, encrypted messaging, the Eigentrust++ reputation system and the Apostille service for notarizing and checking the authenticity of files on blockchain.
Another important market for NIS1 are enterprise-level solutions: through a purpose-built API system, NEM allows developers to integrate its blockchain infrastructure into third-party applications.
Pros & Cons of NEM coin
- The platform enables widespread adoption of the world’s greatest blockchains
- The firm’s significant concentration is on large corporations. It is making a higher volume of exchanges of coins.
- Developers acknowledged that their platform needed to remain nimble to maintain market share as it has a comprehensive API interface and is open for further developments.
- Its team is highly secretive, and it lacks a strong marketing arm that communicates with its community.
- Despite its unique characteristics, it can be seen as just another smart contract platform with a different marketing strategy. So it’s very less likely to differentiate itself and surpass its competitors.