NEM (XEM) cryptocurrency history
The idea of NEM came from a group of Bitcointalk forum users and consisted of the NXT fork. The improvement of the project ultimately led to the creation of its own blockchain, whose main advantages were speed, scalability, and a unique system of rewards. NEM is an abbreviation of “New Economy Movement”.
Interestingly, an ICO wasn't conducted for the fundraising. Instead, investors bought XEM through an NXT exchanger and tokens were distributed for individuals who had made a contribution to the project development.
The test for the alpha version of the NEM network was launched on 25/06/2014 and the test for the open beta version was started on 20/10/2014. Finally, the NEM core network was launched on 31/05/2015. At first, the project was relatively unknown and thus developed slowly, however several Japanese banking giants entered into a partnership with NEM to create a unique blockchain payment infrastructure in 2017. Since then, its capitalization has grown and NEM has become one of the most successful Chinese cryptocurrencies.
How does NEM work?
The NEM platform is based on the following areas of the “new economy”:
- A public payment system based on a blockchain, the main advantages of which are high transaction speed and minimal fees
- Smart Assets - an analog of Ethereum smart contracts. These are used to develop dApps, tokenize digital assets, and create asset management systems. Smart assets can be written in any programming language convenient for developers
- The ability to conduct an ICO on the platform. This is not inferior in functionality to Ethereum, it is just not used as often. The most famous project is COMSA (CMS) of the Japanese company Tech Bureau which raised $95 million
- The ability to launch private blockchains for business companies
NEM blockchain architecture is based on the principles of simplicity and easy creation of different business solutions, and consists of many nodes that provide transactions and smart assets. The API gateways provided by these nodes allow dApps to access the network and use its capabilities. For the development and functioning of all architectural solutions, complex software tools are not needed as the platform API gives the user all the necessary abilities. The NEM p2p network is formed by the interaction of supernodes that verify all transactions and maintain stable operation of the blockchain. The supernode must always be connected to the network and have 3 million XEM.
Thanks to the complex of applied solutions, NEM technology is highly energy efficient, as powerful equipment is not needed to support the network stability. The distribution of rewards is also very fair - a user with better reputation and a longer transaction history receives more rewards than one who just invests and retains for a long time.
Transaction history is stored on the public blockchain with each block containing up to 120 entries. Each account represents a separate container with a unique private key and address for storing digital assets. The account balance is divided into “active” and “inactive”, with all deposits credited to the inactive balance. Every 1440 blocks, these funds are transferred to the active balance in equal portions (1/10 of the available amount). When assets are sent to another account, funds are withdrawn from both balances, protecting the network from manipulative actions.
NEM Protocol (Proof-of-Importance)
The NEM network is based on a unique PoI (Proof-of-Importance) algorithm ensuring the fair distribution of reward payments between participants. PoI is a modified version of PoS (Proof-of-Stake) with a parameter called reputation, in addition to the need of owning a certain number of coins. The reputation affects the likelihood of new block generation by the account, depending on the XEM storage time, the number of verified transactions, previously mined blocks, etc.
NEM Private Blockchains
To implement the creation of private blockchains NEM uses ”Mijin” platform. Mijin is a centralized blockchain core with high throughput capacity, the ability to host nodes in a private cloud, and anonymous accounts. Private business blockchains of any direction (social networks, exchanges, platforms for ICOs, payment systems, etc.) can be created on top of the main network.
The NEM blockchain implements a modified version of the Eigentrust++ algorithm, which provides each node in the network a unique global trust value, based on the peer's history of uploads, thus aiming to reduce the number of inauthentic files in a P2P network. This helps to avoid network overload, increase scalability, provide additional resistance to hacker attacks, and finally reduce the number of nodes that are not playing a serious role in network life.
Catapult is the long-awaited blockchain engine written in C++, called Mijin v.2. It is a new stage in NEM development that has been in the works for over 4 years. The main feature of Catapult is a well-coordinated four-layer architecture:
- p2p transaction core
- MongoDB and API servers
- NEM-based dApps
By using parallel transaction processing technology, Catapult will further increase network throughput. Its structure contributes to improving the security and stability of the NEM blockchain because each of the layers can be updated independently of the others. In addition to improving the existing capabilities of NEM, Catapult brings with it several technological innovations, including the interaction of private blockchains with the main network, aggregated transactions, cross-chain swaps, and multi-level multi-signature accounts.
8,999,999,999 XEM were issued at once. Mining of NEM therefore does not involve the creation of new coins, instead consisting only of paying commission for nodes that maintain the network and process transactions, as well as receiving remuneration for the blocks mined. The mining process in NEM is called “harvesting”. Its success depends on the account reputation score. A prerequisite for mining XEM is the presence on the miner’s account of at least 10 thousand XEM. You can buy XEM coin on any exchange and store it in Guarda wallet.
In addition to native XEM coins, users can create a “mosaic” - an analog of tokens in the Ethereum blockchain. This is a specialized asset (digital versions of licenses, vouchers, stocks, etc.) that has a number of customizable parameters and can be transferred between accounts. Users can find a multi-signature function in NEM, allowing them to use accounts in sharing mode.