New Economy Movement – Smart Asset Blockchain About NEM (XEM)
NEM, or the New Economy Movement, wants to develop a smarter and more technologically-advanced blockchain. It positions itself as being not just another altcoin, on not just another blockchain NEM, which calls itself the Smart Asset blockchain, is a technology platform that seeks to be an efficient way to manage assets and data easily and at low cost.
NEM, in its most basic form, is a crypto currency that is built on block chain technology. The NEM block chain is an improvement on existing block chain technologies. It integrates concepts from other cryptocurrencies (e.g. Bitcoin) and academic research in network theory. NEM’s primary contribution to the crypto currency landscape is a new consensus mechanism called Proof of Importance (PoI). Unlike Proof of Work (PoW), it is environmentally sustainable and does not require large scale computing resources in perpetuity. PoI is similar to Proof of Stake (PoS) except that it is not solely derived from the size of an account’s balance. It incorporates other behaviors that are believed to be positive for the holistic economy. In this way, it attempts to reward active economy participants at the expense of inactive ones and dampens the rich getting richer effect that is inherent to PoS. NEM has its own cryptocurrency, called XEM.
NEM evolved in March 2015 as a fork-out version of the NXT, another popular blockchain-based virtual currency and payment network platform. It is operated by a Singapore-based non-profit organization called Foundation. Following the fork, decided to develop its own codebase for advancing NEM, to make it more scalable and faster. Thus emerged a new NEM cryptocurrency platform, which was completely different from the original NXT.
NEM’s vision is to be the foundation of a vibrant crypto currency ecosystem that emphasizes security and trustless computing. NEM was launched with built-in support for multisig transactions and encrypted messages. Additionally, the peer-to-peer (P2P) NEM network implements a modified version of Eigentrust++ to identify and minimize the impact of malicious nodes. NEM aims to build a “better” blockchain, and it tries to achieve that using two key concepts of harvesting and Proof-of-Importance (POI).
The process of creating new blocks is called harvesting. The harvesting account gets the fees for the transactions in the block. This gives the harvester an incentive to add as many transactions to the block as possible. Any account that has a vested balance of at least 10,000 XEM is eligible to harvest. With each passing day, NEM’s mechanism allocates 10% of non-vested holdings as vested. So, with just holding XEM for a period of time the holdings will earn the vested holdings status and will be eventually eligible to participate in the PoI selection.
Proof-of-Importance (PoI) is the name of the block chain consensus algorithm used by NEM. Each account is assigned an importance score that proxies its aggregate importance to the NEM economy. Accounts with higher importance scores have higher probabilities of harvesting a block. The NEM block chain platform allows all transactions to be transparently viewed. This information about value transfers between accounts can be used to determine a rating for the importance of accounts. The intuition that not all nodes in a graph have the same salience, or importance, is not new. The literature in the graph theory community is well established for computing the importance of nodes in graphs in the areas of search, social networks, street networks, and neuroscience, among others. Building off of this intuition, one of NEM’s core innovations is to use graph theoretic measures as a fundamental input into block chain consensus. The outlink matrix that defines the transaction graph is centrally important and used in the PoI calculation.