Adapting prevailing company networks to blockchains in order to harness the power of this revolutionary technology has, sadly, been complicated, if not downright difficult.
That is, until the launch of NEM.
NEM, an acronym for New Economy Movement, is a feature-rich blockchain solution that provides a platform to integrate existing business systems, as well as to deploy applications, in a simple and seamless manner. As stated in the NEM whitepaper:
“NEM is 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, released on March 2015, has a codebase built from scratch with a focus on improving scalability, security, and speed of blockchain systems. It is currently headed by the NEM Foundation.
XEM is the native token on the NEM blockchain with a similar function to Ether (ETH) on Ethereum, and has a total supply of 8,999,999,999 tokens.
NEM’s platform can manage supply chains, financial instruments, notarizations, ownership records, encrypted messaging, voting, or can even be used to develop crowdfunding and cryptocurrency tokens among many other use cases.
NEM’s platform is easy-to-use that requires no need of any special software, or a specific programming language- A feat achievable through NEM’s unique network architecture. NEM builds a ‘Smart Asset System’ connected to an API interface to allow for customization of any number of applications and assets.
The Smart Asset System has four components:
Addresses: These act as containers for assets. Hence, it could be a wallet holding coins, an election collecting votes, or even a document requiring signatures. Addresses can be configured with certain rules to dictate how they will be related, controlled, updated, or transferred. Addresses can also be multi-signature (multisig) in nature to allow ownership of assets to be shared amongst various parties.
Mosaics: Mosaics form the backbone of the NEM network, and are identical, transferable, and fixed assets on the blockchain that are defined by a number of attributes. Mosaics can represent anything from tokens to signatures, or even reward points and other currencies, and are held in addresses.
Namespaces: Similar to an internet domain name, a namespace allows users to own unique domains which serves as a place for their business or assets on the blockchain. One can even define multiple subdomains.
Transactions: Transactions put Smart Assets to actions by letting users transfer Mosaics between Addresses, transfer ownership of Addresses, or even send messages.
Nodes on the NEM network serve as an API gateway server to offer API compatibility through various solution architectures for user functionality. It does so, in any coding language, and without the need of complex softwares. For instance, mobile apps can access NEM directly, or existing servers can make use of NEM in the background.
Secondly, the nodes also create a P2P blockchain network to validate blocks of data. The system achieves consensus through a process of participation and the amount of vested XEM coins in a user’s wallet (unused XEM assets that remain in an account become vested after a certain period to time, at a rate of 10% of non-vested XEM in a wallet).
This occurs through an alternative to mining called as Harvesting. An amount of 10,000 vested XEM will allow a node to generate blocks and confirm transactions. They can, in turn, earn transaction fees based on their importance in the network. (FYI: About 3 million vested XEM enables a user to start running a supernode.)
Importance is basically a ‘trust score’ and it’s a measure of how much you’re invested in the NEM system. Hence, those who actively use the NEM system, in addition to the amount of their vested stake, will have a greater importance score.
(Note: NEM also offers Delegated Harvesting: You can connect to a supernode’s computing power to generate blocks without exposing your private keys.)
Hence, on the whole, the NEM network uses a novel consensus system titled as Proof of Importance (PoI), which is extremely energy efficient, and not all hardware intensive. Proof of Importance works to determine the importance a node wields, in order to reward those with not only have a large balance in their wallets, but also takes into account how much they transact with others. Hence, PoI circumnavigates the centralization of mining and excessive energy consumption seen in Proof-of-Work (PoW), as well as the unfair advantage of ‘rich-getting-richer’ in Proof-of-Stake (PoS).
NEM also implements a reputation system using the Eigentrust++ algorithm to automatically filter out ‘bad’ nodes in order to maintain the health of the network. The NEM network also offers a permissioned private blockchain for deployment to provide unparalleled speed and security for a user’s own server, as well as a public blockchain that can be used by anyone.
Though NEM is a nascent project, it has partnered with a number of companies worldwide, including Tech Bureau’s Mijin permissioned ledgers. Another interesting project in the making is Landstead which is a land and property registration system running on NEM’s network. NEM also released two products by the name of Catapult (aims to integrate financial institutions with blockchain solutions) and Apostille (an in-built notarization and authentication service).
Final thoughts? There is no doubt that NEM comes equipped with a unique set of features that provides a promising platform with an API driven interface to allow for powerful customization for both companies and developers.