NEM-[XEM]: Defined
Unit XEM / Quick Over View:
- Max and circulating supply 8,999,999,999 XEM.
- Created in 2014.
- Launched in 2015.
- Created by a non-profit organization founded in Singapore.
- Block A block can contain up to 120 transactions.
- Maximum block size is not defined.
- Mining NEM uses the term harvesting. Open source project available on github.
- Smart Asset System.
- Powerful API interface that can be used with many programming languages.
- NEM offers public or private blockchains to customers.
- NEM transaction might be 100% transparent.
- EigenTrust++ algorithm is used for peer-to-peer communication. Embedded messaging and escrow services.
Introduction:
- The "New Economy Movement",(NEM), currency-econsystem attracts a lot of people for many reasons.
- The newly introduced consensus mechanism called "Proof Of Importance", (POI), is cover later on in this article.
- The code-base was designed and developed from scratch (no fork of other existing project).
Influencers:
- Long Wong the president of the founding board.
- Jason Lee the global director.
Technology:
- NEM is a peer-to-peer, scaled blockchain platform ready for small and enterprise businesses.
- NEM aims to penetrate into the banking sector, which requires mainly transparency and transaction verification.
- For this reason the NEM blockchain is public.
- However NEM offers also a private blockchain to satisfy all customer needs.
- NEM is regarded as a green friendly technology since it uses 100 times less electricity than Bitcoin for network operations.
- That is made possible by the usage of POI consensus mechanism, which is not so energy demanding as POW or POS.
- It is worth mentioning the Catapult project.
- Within the project the core code-base was rewritten from Java (the first generation) to C++ (the second generation) and and the Mijin (NEM’s permissioned) ledger was completely overhauled to give a superior performance.
- It significantly increased NEM‘s performance and made it ready for the financial sector.
- Thus NEM can be considered as a competitor to Ripple.
- For more details check the Catapult white paper.
- NEM is able to handle 3.000+ (peak 4000) transactions per second. Transactions are visible within 6 seconds in a wallet/NEM client.
- Confirmation comes within 20 seconds.
- Transaction fee is 0.1% of the transaction amount.
- NEM allows customers to build arbitrary asset systems.
- Customers define how the NEM blockchain will look like, what it will be doing and how it is going to be used.
- The potential is huge as it can be utilized in fintech, logistics, exchange, ICO, document storage and notarization, decentralized authentication, military, medical and many other businesses.
- To build an asset a customer must define a namespace (and possibly subdomains), which is in fact the home address in a NEM blockchain.
- Next step is a definition of arbitrary mosaics in a given namespace.
- Mosaics are NEM‘s sub assets. The creation of sub assets requires the rental of a root namespace.
- A customized mosaic is a basic building block of smart assets that can represent anything.
- For example a coin, signature, document, status or any other thing.
- An asset can be updated by a NEM transaction, which is not always the case in similar competitor projects.
- Moreover NEM allows the creation of addresses acting as containers for mosaics that can be connected with multiple rules.
- Address can represent a user as a NEM account holder.
- In addition, assets can be transferred as an attachment via the NEM embedded messaging system.
- This is what makes NEM unique in the cryptocurrency world.
- NEM invented the revolutionary consensus mechanism called proof of importance (POI).
- As POW and POS are considered unfair and energy wasting, the POI introduced a new way of block selection.
- Instead of the term mining, well-known in crypto world, the word harvesting is used in NEM.
- Every user can participate in "harvesting" when he fulfills the required conditions and thus gains so-called importance.
Advantages:
- The main advantage is surely the POI consensus mechanism. Moreover POI is green and an energy sparing technology.
- Nearly every considerable business can be built on top of the NEM blockchain.
- NEM is a business ready blockchain and is already used in ICO, cryptocurrency exchange, state economy digitalization, etc.
- It is an open source project.
- NEM CEO Martin Alf is an experienced manager who has led multi-million dollar companies.
- A strong community in comparison with other projects.
- An available SDK.
Disadvantages:
- Even though POI brings some great ideas it seems though that POS is being recognized as a more effective consensus mechanism.
- Huge max XEM supply.
- Financial results not published.
- None or not revealed advisors.
- No mention about the development team at official web side.
- Nearly no activity on youtube
Whitepaper:
- NEM does not have a whitepaper.
- NEM does have a technical reference representing both the whitepaper and the technical overview.
- It is a circa 55-page document with relevant information.
- Topics as accounts, addresses, used cryptography, transactions and blockchain, POI and networks are discussed.
- I advise you to also read the Catapult white paper.
Real examples of use:
- XEM is a coin in NEM. It is a deflationary coin with maximum supply of 8,999,999,999.
- XEM came into existence when 1,500 stakeholders each received 5,999,999 XEM.
- Then they distributed, said coins, to the community.
- Other funds were distributed to multi-sig wallets with the intention of distribution for NEMs development and rewards.
- XEM can be bought on exchanges (available at all major players) or be harvested.
- In NEM there are two kinds of users.
- Either with importance or without it. By default the user does not have the importance.
- In order to be eligible for importance calculation, the user needs to have at least 10.000 XEM in their balance.
- The importance is then calculated based on two factors.
- Firstly XEM amount is taken into account.
- Secondly a number of transactions within the last month is considered.
- So not only account balance is crucial by the importance calculation, but also the amount of transactions. It ensures fairness.
- Harvesting is the process of generating blocks and earning the transaction fees in that block as a reward.
- POI determines who generates a new block.
- To be able to harvest, the account needs to have importance.
- If that is the case, then every 1440 blocks 1/10th of the unvested balance is moved to the vested part.
- Note that harvesting does not create new XEM coins.
- Harvesting revenue is approximately 1% per year (depends on the amount of transactions).
- Also read the paragraph related to the wallet to understand the difference between local and delegated harvesting.
- When the account achieves the importance, then it can become a super-node. There are 2 advantages of being a super-node.
- Besides the possibility of harvesting, a super-node can take part in voting and thus influence the further development.
- Note that the POI and the harvesting explanation is simplified.
- To fully understand how POI works I advise you to read the NEM tech reference.
- NEM is real business, and NEM established a partnership with the Malaysian Digital Economy Corporation (MDEC).
- MDEC is the leading agency responsible for introducing digital economy in Malaysia.
- The NEM blockchain was launched in Kuala Lumpur to support innovation and mass adoption of digitization.
- NEM is used as a backend and asset system (tokens, smart signing contracts etc.) for Comsa.
- Comsa is an ICO solution platform. It enables an easy way for companies to create ICO.
- The NEM blockchain is used in Mijin.
- Mijin is a successful commercial blockchain used by financial institutions and private companies in Japan.
Technical analysis:
- Embedded messaging system with the possibility to send assets in the message.
- POI.
- Smart asset system.
- Passive income via harvesting.
- Account security with multistage approvals.
Fundamental analysis:
- The NEM team is formed mainly out of Japanese developers.
- There is about 15+ developers working on NEM.
- Judging by the pull requests on github it seems the project is live.
- The development team can be reached via Telegram.
- There is the NEM forum, dedicated to development on the NEM platform.
- The development team is not mentioned on the official pages.
Investors:
- The NEM.io Foundation stands behind NEM.
- The foundation’s purpose is to introduce, educate, and promote the NEM blockchain technology internationally.
- NEM have already claims the official web of approval.
- There is no mention of any funding.
- A list of the founding board, council and founding members is available including names and positions.
- On the Investor page there is only technical material and no mention about investors.
Conclusion:
- NEM has a really huge potential and it is already used in real business.
- It has stepped in the financial and ICO business already.
- Competitors of NEM are FACTOM, Ripple and DASH (similar node systems for governance).
- NEM is worth to keep an eye on.
Roadmap:
- It might be surprising that NEM does not have a road map.
- There is no mention on the official web site.
- There are some NEM road maps available for example on NEM‘s facebook, but it is not up to date.
- It looks more like a timeline and it covers only the years 2014 and 2015.
- It might be a case that Catapult‘s white paper and other technical documents are considered a road map.
- The “New Economy Movement”, or NEM, was officially launched in 2015 after being created by an online community of developers.
- Rather than Bitcoin’s Proof-of-Work (PoW) or Nxt’s Proof-of-Stake (PoS) algorithm, NEM utilizes something called the Proof-of-Importance (PoI) algorithm.
- PoI is similar to PoS, but takes more factors into account when choosing which users get rewarded.
- The NEM token is called “XEM”.
- NEM Technical reference: “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.”
- The NEM project was developed with the intention of addressing wealth inequality.
- However, few coins have made this an explicit goal.
- NEM has branded itself as “the smart asset blockchain”.
- Similar to Ethereum, NEM’s blockchain is optimized creating dapps (decentralized apps) managing financial instruments, supply chains, notarizations, and ownership records.
- Unique to NEM is it's API (Application Programming Interface), which means that external systems can easily interact with NEM.
- Just as the steering wheel or the gear shift is your way to “interact” with your car’s engine, external applications can be connected and used to interact with NEM.
How NEM Works:
- Smart Addresses!
- Mosaics!
- Namespaces!
NEM has the advantage of not requiring users to write their own Smart Contract code–instead, users can compile their assets into “mosaics”, create their own “namespaces”, and manage “container” Smart Addresses through an API interface.
- Smart Addresses on the NEM network are more than just numbers that are used to send and receive transactions.
- With NEM, and address could represent “things like: a package to be shipped, a deed to a house, or a document to be notarized.”
- Essentially, NEM Smart Addresses are used as Smart Contracts–users add their data into a container address and define how the addresses relate to one another.
- Their contents are “updated and transferred” depending on the rules that users set for them.
- Mosaic “fixed smart assets” are “are fixed assets on the NEM blockchain that can represent a set of multiple identical things that do not change.”
- Practically, a Mosaic could contain things NEM tokens, reward points, signatures, votes, or other assets (like shares of stock or other cryptocurrencies).
Creating a Mosaic:
- Creating a Mosaic, users must define a series of attributes, including its “name, description, quantity, divisibility, transferability and more.”
- Mosaics are distributed between assets according to the various rules and conditions that are given to the addresses.
"A Smart Address’s conditions state that if one Smart Address sends a certain amount of tokens to a second Smart Address, the second Smart Address will automatically send a Mosaic full of shares of stock back to the first Smart Address (corresponding with the amount of tokens sent)."
Creating a Namespace:
- NEM users can also create Namespaces, which operate similarly to domain names on the internet.
- Instead of websites, however, the Namespaces are created specifically for viewing assets.
- Namespaces allow users to create a sort of “place of their own” on the NEM blockchain.
- Using Namespaces, businesses and individuals can be accessed by other NEM users more easily.
- Namespaces can contain “subdomains” that contain various assets, just like websites can have multiple pages.
NEM Transactions:
- Transactions on the NEM network can integrate MultiSig (multi-signature) technology.
- Regards, this means users can choose to require the signature of multiple parties on a single transaction before the transaction is executed and broadcast to the network.
- NEM also allows users to send encrypted messages to one another.
- No transactions need to take place in order for the messages to be sent.
NEM: Proof-of-Importance:
- NEM is the first coin to use the Proof-of-Importance algorithm.
- Understanding how PoI works, let’s first talk about Proof-of-Stake and Proof-of-Work.
- Upholding a cryptocurrency’s network, the coin’s blockchain (a public ledger that stores transaction information) is stored on a network of individual computers.
- These computers are called “nodes”.
- Maintaining the network, nodes also fulfill the function of verifying transactions by putting them through a series of tests.
- When transaction(s) gets verified, the nodes add the transaction information to “blocks”.
- The blocks are then stored in a linear fashion, like a chain. That’s how “blockchain” technology gets its name.
- In order to make new blocks, nodes participate in one of a few different processes.
- For coins like Bitcoin, which use a Proof-of-Work algorithm, that process is called “mining”.
- “Mining” is what happens when nodes solve complex equations that create new blocks for the blockchain.
- In exchange for mining, you get rewarded in the form of crypto tokens.
- Having a fancier and more complicated equipment, you are able to mine more efficiently.
- Coins that use the Proof-of-Work algorithm can give an unfair advantage to users who have access to better equipment.
- For coins like Nxt, that use a “Proof of Stake” algorithm, nodes take “forging” or “minting” instead of mining.
- Opposed to solving complex equations in exchange for token rewards, nodes on a PoS network are chosen at random to create new blocks.
- As nodes that mine coins, these nodes receive token rewards in exchange for forging.
- We will focus now on Proof-of-Importance: Nodes on a PoI network are assigned an “importance score”.
- The “importance score” depends on a few different things.
- In order to be eligible to receive the score, a user must hold 10,000 XEM tokens (about US$2700 at the time of writing).
- Additionally, the score depends on how many transactions a user takes part in on the network.
- Users who have a higher number of transactions “harvest” more blocks on the network, and are therefore given a higher importance score, leading to higher token rewards.
- Proof-of-Importance, (POI), give an advantage of creating serious NEM supporters who consistently support the network.
- Transactions on the network happen faster when the token value stays more consistent.
- Proof-of-Importance also allows users who hold at least 3 million XEM tokens to become “Supernodes” that act as the backbone of the network.
- In exchange being a Supernode, users receive 140,000XEM every day that they run a node that fits the appropriate technical criteria.
- NEM Supernodes are also what enable NEM litewallets, mobile apps, and external (third party) apps.
- Transactions through NEM media are given access to the blockchain through the Supernodes, and they don’t have to contain the entire blockchain themselves.
- NEM continues to rise in value.
- NEM is becoming more and more difficult for nodes to receive an importance score.
NEM for Developers:
- NEM was written in Java.
- Developers do not have to learn a new programming language in order to develop dapps (decentralized application) on its blockchain.
- Developer who want to create a Ethereum blockchain must first learn the Ethereum programming language, which commonly is a deterrent.
History of NEM:
- The crypto world reached discussions in online communities.
- Much of the history surrounding various cryptocurrencies is documented on sites that are focused on blockchains,and other programming technologies.
- NEM is no different.
- NEM was originally proposed by UtopianFuture, a user on a Bitcoin Talk forum.
- NEM was conceptualized as a fork of NXT, which is a cryptocurrency and payment network that utilizes a proof-of-stake algorithm.
- On January 19, 2014, UtopianFuture placed an open call for community participation in the development of NEM.
- NEM is a cryptocurrency within a solid community base.NEM is built from scratch by developers who never met offline.
- NEM did not have a typical ICO
- NEM's non-typical ICO enables coins sold to a group of investors who pay with cash or other coins (usually Bitcoin or Ethereum).
- There is 2.25 million XEM tokens that were distributed among community developers who contributed to the creation of the NEM-coin.
- The stable version of NEM was introduced to the public in March of 2015.
- At the time of release, a single XEM token was worth ~US$0.00004.
- NEM’s value didn’t change with any significance for the next two years, but it started to see a sharp increase in April of 2017.
NEM as an Investment:
- NEM is currently a cryptocurrency with seventh of the largest market cap in the world.
- NEM is currently priced at ~$0.28 a token.
- The market cap is $2,502,126,000, close to its all-time high.
- There are nearly 9 billion XEM tokens in circulation.
