Crypto veterans will likely have heard of NEM, or seen the XEM crypto token on the market cap rankings. But if you've ever wondered what NEM project is all about, or who is behind it, then buckle up as we answer the question: What is NEM?
NEM stands for ‘New Economy Movement’, and it was created well before the 2017 ICO craze as a fork of the NXT blockchain, although eventually, the NEM developers created their own code for NEM to run on.
Alongside Ethereum, NEM was one of the first projects to recognize that a cryptocurrency could be more than just a means of payment. The team created a blockchain platform designed to be an integral part of the new Smart Economy, that would support everything from custom tokens to supply chain tracking protocols.
The NEM team refers to this as the Smart Asset System, where platform users can create new crypto tokens or customized blockchain infrastructure, publish data to the blockchain, or set up multi-signature security systems. All of this is managed by the NEM.io Foundation, a non-profit organization based in Singapore.
One of NEM’s most unique features is the Proof of Importance consensus mechanism, which differs quite significantly from Bitcoin's proof-of-work and Ethereum's proof-of-stake mechanisms.
The basic idea is that to vote to approve transactions on the NEM blockchain, an investor must hold at least 10,000 of the platform's native XEM tokens for a certain amount of time. Each day that an investor holds XEM, 10% of their XEM becomes “vested.” Once the vested amount exceeds 10,000 XEM, the investor can start harvesting, which is similar to mining. For example, if an investor is holding 20,000 XEM it would take 7 days to reach a point of having 10,000 vested XEM.
Put simply, the POI system is designed to give validating power and staking rewards primarily to investors who actually use the network. Another of NEM's key features is their new 'Symbol' blockchain, which aims to make it easier for private, enterprise-level projects to move into the blockchain space.
Businesses can choose to interface publicly with the NEM blockchain and other public blockchains. This would allow token transfers or data sharing between smart contracts, whilst also taking advantage of Symbol's hybrid public and private architecture in order to restrict the flow of confidential information.
Giving companies this degree of control and customizability solves a substantial hurdle for large-scale blockchain adoption. To facilitate this, the team has created a new token, XYM, which will be the core value transfer mechanism on Symbol.
But the main advantage that NEM has over rival smart contract platforms is its speed since NEM is capable of clearing an estimated 4,000 Transactions Per Second.
Although Ethereum is the dominant smart contract platform, NEM may be filling a niche by targeting businesses with features that allow for confidentiality.
A recent report by Fortune Business Insights suggests that the enterprise blockchain market could be worth a whopping 21 billion dollars by the year 2025.
Will NEM will be amongst the blockchain platforms that can take advantage of this trend? Share your thoughts in the comments.