NEM stands for New Economy Movement and is the world’s first “smart asset” blockchain.
While it started out as a hard fork of another open-source cryptocurrency and payment network platform (NXT), the NEM development team later decided to rebuild the system from scratch.
Today, the NEM blockchain is an open and customizable blockchain solution built on top of simple but powerful API calls. Ultimately, NEM seeks to be a technology platform that offers an efficient way to manage assets and data and at a much lower cost.
What are the advantages of the NEM blockchain?
The NEM blockchain is designed and built from the ground up with the clear goal of improving scale and speed.
Unlike Bitcoin or some other popular cryptoassets, XRM, NEM’s native cryptocurrency, cannot be mined. Instead, new coins are produced using a process called harvesting. With this unique method, every time a transaction is initiated on the blockchain, the first computer to see the transaction will notify other users around it of that transaction, in such way generating a new block. Whenever a user who has 10,000 vested XEM generates a block in NEM, they receive the transaction fees as a reward.
Unique consensus system
One of the main innovations that set NEM apart from other blockchains in the industry is a novel algorithm known as proof-of-importance (POI). The central idea behind this method is to reward people who actively participate in the network. It is designed to ensure that anyone with any hardware and regardless of how many coins they hold could have a shot at harvesting a block and getting more rewards.
Ease of development
NEM’s blockchain has an adaptable API interface that can be used with any programming language, such as Java or C++, not a custom smart contract language. This makes it incredibly user-friendly and flexible, meaning that any business can use the NEM blockchain to process transactions securely or maintain the ledger without having to overhaul their existing infrastructure. Besides, NEM’s Smart Asset system allows for powerful modular customization, which enables others to use NEM to build anything they like – whether it’s an ICO, fintech system, decentralized authentication, or something else.
How can NEM be used?
As mentioned, NEM strives to be a highly customizable blockchain for various business use cases. Because it exposes its functionality through a simple but powerful API interface, it makes it extremely easy for developers to build whatever they like.
- Financial industry: NEM can be used to build a financial payments platform or create a new cryptocurrency.
- Business management: NEM blockchain can be used for KYC, supply chain management, a loyalty program, shipping, and more.
- Security: Thanks to its advanced security features, NEM can also be used for keeping secure records, like authentication, encrypted messaging, and anti-counterfeiting.
- Decentralized platform: In addition to all of the above, the NEM blockchain also offers all of the decentralized technology advantages and can be used for crowdfunding, ICOs, or stock ownership.
NEM summary: what’s next?
In January 2018, NEM survived the biggest cryptocurrency hack in history. $523 million NEM coins were stolen from a Japanese cryptocurrency exchange Coincheck. The heist topped the legendary theft of Mt. Gox that took place in the early days of Bitcoin.
The hack was blamed on the exchange’s poor security protocols as well as the platforms’ implementation of the NEM API calls. It is suspected that Coincheck kept NEM’s coins in a ‘hot’ wallet (online crypto wallet) to do vesting and that’s the reason why it got hacked.
However, largely because of community support, NEM weathered the storm and was quickly relisted on the same exchange.