What is NEM
NEM (XEM) is second-generation cryptocurrency platform, written in Java and C++. It offers multiple features, including its unique POI (Proof of Importance) hashing algorithm, encrypted messaging and multi-signature accounts. It also offers its own NEM Nano Wallet where users can trade assets created on the NEM platform as well as utilize NEM’s templated smart contracts (i.e. mosaics, apostille, voting).
The NEM Blockchain
NEM’s blockchain platform was built for scale and speed. The permissioned blockchain was designed and coded from the ground up to deliver the industry’s best transaction rates for internal ledgers. The Supernode program allows for unlimited growth without sacrificing the public blockchain’s stability.
NEM’s Revolutionary Consensus Mechanism—Proof of Importance
NEM’s major innovation, Proof of Importance, is a novel algorithm that uses network theory to assign a rating of each account’s importance in the network. Unlike Proof of Work (POW), POI does not cater towards those who can afford the most powerful computing, and it is a more eco-friendly solution as it prevents miners from accumulating expensive power bills. It also acts as a solution to the alternative Proof of Stake (POS) algorithms which give an unfair advantage to those hodling the most coins.
- POI only counts coins that have been in the account for a number of days.
- 10% of the current unvested amount vests each day.
- The higher the number of vested coins, the higher the account’s POI score.
- It takes a minimum of 10,000 vested coins to start harvesting.
Catapult, also known as NEM 2.0 is a full-featured blockchain engine that can power both private and public networks with its unique smart contract plugins. It serves as an extension of the private chain to the NEM public chain adding more functions and features to support a wide variety of industries. These plugins enable bulletproof digital asset creation, decentralized swaps, advanced account systems and business logic modeling.
Catapult broadens blockchain technology relevance to a wider spectrum of use cases from currencies, exchanges, IOT Micropayments, rewards programs, and bank accounts to copyright management, notarizations, voting, inspection records and more.
How NEM Works
NEM works similarly to bitcoin in the sense that it uses a blockchain to convey transaction data. Unlike bitcoin, it uses a Proof of Importance (PoI) hashing algorithm, which is closer in similarity to Proof of Stake (PoS) than bitcoin’s Proof of Work (PoW).
When a payment is initiated, the user needs to send the receiver’s wallet address along with the amount of NEM to be transferred to the network. The nodes then approve (or disapprove) this payment and once approved, the receiver receives the payment. There is a tiny fee associated with each transaction. Supernodes (nodes with high computational power) serve to help process the payment and add its corresponding information to the NEM blockchain.
History of NEM
The Alpha version of NEM was released in June 2014, followed by Beta version in October 2014. The stable version of NEM was launched in March 2015. The NEM blockchain was designed for integration with and use by commercial and government enterprises. The NEM Foundation is endorsed by an international network with expansive experience in IT, entrepreneurship, business processes, trading, property and asset development, global management and academia.
Visit the Getting Started on NEM guide to find more information on how to access the NEM network, download and install the NEM wallet, and get some NEM. Find out how NEM could benefit your business and get comfortable with NEM’s basic features on the Testnet.
NEM was conceptualized to be drastically different from bitcoin where security, ease of use and other features were redesigned from the ground up. Among its differences are:
- Ultra Secure Transactions: NEM uses EigenTrust++ protocol for node reputation which enhances the security of the network considerably. No other cryptocurrency makes use of this.
- Completely New Code: The code of NEM is not derived from Bitcoin code which makes it difficult for hackers to attack the network as it doesn’t carry any inherent flaws/weaknesses of bitcoin. Instead of the traditional PoW (Proof of Work), NEM makes use of PoI (Proof of Importance).
- Built-In Spam Protection: The inherent spam protection mechanism of NEM can identify spammy nodes of a network and can take them down without disrupting the whole network. This means that the NEM network remains functional even during spam attacks.
- Multi-signature Accounts: Without the complexity of writing code (as seen with Ethereum), NEM allows users to implement multi-signature accounts with only a few clicks. Even new users can utilize this feature with relative ease.
- Receive With A Name: Using the Namespace concept, NEM participants can create unique “domain names” for themselves as personalized receiving addresses, much like website domain names. Payments can be sent to and received from these domain names, instead of an address.
- Built-In Messaging System: Completely secure, encrypted messaging is allowed between two parties involved in a payment on the NEM network. For programmers, it is possible to send Hex messages as well.
- API Integration: With NEM, it is easy to implement custom-built applications to interact with any network and use the NEM network to facilitate payment processing automatically, in real time.