Blockchain technology is one of the cutting-edge technology that is going to transform numerous sectors in upcoming years, including gaming, finance, and so on. NEM, also known as the New Economy Movement, is a revolutionary blockchain platform aimed at developing a smarter and technologically advanced blockchain. Setting itself apart from other altcoins and blockchains, NEM seeks to provide efficient asset and data management capabilities at a low cost.
Unlike the Bitcoin network, NEM is different in some ways like the consensus mechanism. However, the Bitcoin network doesn’t get damaged as it is still the most favorite cryptocurrency for investors. Also, If you are interested in Bitcoin trading, you may also consider knowing about the Immediate Alpha.
In this article, we will explore the workings, features, advantages, and potential applications of NEM. So let’s begin.
The Origin Story of NEM
NEM emerged in March 2015 as a fork-out version of NXT, a popular blockchain-based virtual currency and payment network platform.
The NEM Foundation, a non-profit organization headquartered in Singapore, took the initiative to create its own codebase with the aim of enhancing scalability and speed. This decision led to the development of a new and distinct cryptocurrency platform. By embarking on this mission, the NEM Foundation intended to filter out the limitations of its predecessor and provide users with a more efficient and advanced platform for cryptocurrency transactions.
The XEM Cryptocurrency
NEM blockchain network introduced its own cryptocurrency called XEM. Although XEM is not widely adopted as a means of payment by merchants like Bitcoin, it has gained significant value. At the time of writing, XEM had the 108th-highest market capitalization among cryptocurrencies.
Furthermore, NEM also supports a cryptocurrency wallet called Nano Wallet, providing users with a secure storage solution for their XEM holdings.
NEM Consensus Mechanism: Proof-of-Importance and Harvesting
In order to address loopholes present in the previous iteration, NEM strives to enhance a blockchain network by utilizing two key concepts: proof-of-importance (POI) and harvesting.
Unlike other networks that employ proof-of-work (POW) or proof-of-stake (POS) systems, which can be resource-intensive or favor the wealthy, NEM addresses these issues with its unique approach. Furthermore, it makes the blockchain network more energy-saving.
Proof-of-importance (POI) focuses on the level of investment and vested interest a user has in the NEM system. By holding a minimum of 10,000 vested XEM in their wallet, participants become eligible for generating new blocks and earning transaction fees. By doing so, the network rewards its participants.
Furthermore, conducting transactions with others contributes to a user’s POI score, which encourages active participation and discourages misuse.
On the other hand, Harvesting is the alternative mechanism of mining on the NEM blockchain network. It leverages a participant’s POI score. Furthermore, it eliminates the need for costly hardware infrastructure like mining rings as well as does not require an enormous amount of computational power.
Rather than requiring specialized hardware and high computing power, harvesting allows users to link their account to a supernode, utilizing its computing power to complete blocks on their behalf. This approach saves energy and improves transaction processing speed.
Applications of NEM
NEM offers seamless interoperability between public and private blockchains, enabling easy transfer of digital assets, contracts, and files. It can facilitate transactions between internal enterprise networks and public blockchains, opening up possibilities for secure and efficient asset management. Apart from this, NEM offers various use cases, such as:
1. Custom Payment Solutions
NEMPay, an open-source payment app on the NEM network, can be customized to enable easy money transfers using custom crypto tokens.
2. Loyalty Rewards Programs
Retail store chains can leverage NEM to maintain and track loyalty reward points for customers efficiently.
3. Supply Chain Management
NEM provides an open, secure, and end-to-end supply chain logistics management system, allowing shipping companies to securely maintain data about shipping and handling.
4. Secure Voting and Record-Keeping
NEM can be utilized for secure voting systems, record keeping, registration, and access control, enhancing transparency and integrity in various domains.
5. Token Creation and ICOs
NEM allows participants to create, distribute, and trade custom cryptocurrencies and tokens, including the ability to conduct initial coin offerings (ICOs) on the platform.
Advantages of NEM Blockchain
Here are some advantages that NEM blockchain offers.
1. Enhanced Scale and Speed
NEM has been specifically designed to improve blockchain performance, allowing for faster and more scalable transactions compared to traditional blockchain networks.
2. Unique Harvesting Process
Unlike mining, NEM utilizes a unique “harvesting” process to produce new coins. This method allows users who hold 10,000 vested XEM to generate blocks and receive transaction fees as rewards.
3. Proof of Importance (POI)
NEM introduces a novel algorithm called “Proof of Importance,” which rewards participants based on their active involvement in the network, rather than just the number of coins held. This inclusive approach ensures that anyone, regardless of their hardware or coin holdings, has a fair chance of harvesting a block and earning rewards.
4. User-Friendly Development
NEM’s blockchain offers an adaptable API interface that can be seamlessly integrated with any programming language, such as Java or C++. This user-friendly feature makes it easier for businesses to utilize NEM’s blockchain without the need for extensive infrastructure modifications.
5. Flexible Smart Asset System
NEM’s Smart Asset system allows for powerful modular customization, enabling users to build a wide range of applications and solutions on the NEM blockchain. Whether it’s an ICO, fintech system, decentralized authentication, or any other use case, NEM provides the flexibility to develop tailored solutions.
Overall, NEM stands out in the blockchain space with its focus on improving scale and speed, unique harvesting process, inclusive consensus algorithm, user-friendly development interface, and flexible smart asset system. These advantages make NEM a compelling choice for businesses and developers seeking a robust and efficient blockchain solution.
Also Read: The Influence of Blockchain on Financial Services and Beyond
NEM, the “Smart Asset Blockchain, Built for Performance,” aims to overcome the limitations of existing blockchain systems by addressing issues such as slow processing times and network congestion. With innovative features like proof-of-importance (POI) and harvesting, NEM offers a more efficient and sustainable blockchain solution.
Its versatility and API compatibility make it a promising platform with potential applications across industries, from finance and retail to logistics and governance. However, for the NEM network, there’s still a long way to go before it becomes a prominent network and ecosystem as its curators dreamt about.
However, it is essential to approach cryptocurrency investments with caution and seek professional advice before making financial decisions.