What is NEM?
Like Litecoin, New Economy Money, also known as NEM is a peer-to-peer cryptocurrency platform created by a developer with the pseudo “Utopian Future” on 31st March 2015. The banking sector requires transparency and transaction value, this requirement coupled with NEM’s goal of gaining access into the banking sector has forced NEM to make its blockchain public, although it has a private blockchain as well.
To show that they were ready for the financial market, NEM coin had its programs rewritten from Java a first generation programming language to a more reliable and faster “C++”. Also, NEM did an overhaul of its previous permission ledger Mijin, these drastic changes increased the performance level of NEM, and it made them ready to plunge into the financial sector. It was not until after those changes that NEM began to be compared with Ripple and Ethereum. Although being still fairly new, financial experts are calling NEM “the sleeping giant”. They have predicted that the value of NEM’s XEM coin would continue to rise.
Features of NEM
NEM as a cryptocurrency has several features, they include;
- NEM invented new consensus mechanism which unlike other mechanisms like Proof of Stake, this new mechanism Proof of Importance reduces energy.
- Namespace; NEM’s namespace allows an individual with one domain to create other subdomains for other projects or accounts. This system is similar to ICANN, the internet’s centralized name spacing application.
- Proof of Importance mechanism: Proof of importance is a mechanism designed by NEM to calculate and determine how many coins each NEM XEM user has and also how many times each user made transactions to and from the wallet. Other mechanism consensus like Proof of stake does not take into consideration a user’s overall support of the network. This mechanism was built to encourage NEM users to not only own coins but to carry out transactions. For a NEM user to be eligible to enter into the Proof of Importance calculation, the user must have vested at least 10,000 XEM.
- Harvesting of Blocks: For a user to become a Harvester, he must possess a minimum of 10,000 XEM. Harvesting is also referred to as forming blocks. If a Harvester forms a block and a new block is added, all the fees collected from the block the Harvester formed will be transferred to his account. NEM also permits people to request other harvesters to form blocks and process fees for them. While doing this NEM put in designs that ensure that fees collected are sent to users who delegated harvesting and not the ones doing the harvesting.
- NEM allows for encrypted and unencrypted message between addresses
- For every transaction done on NEM, 0.1% of the total transaction amount is deducted by NEM as service fee. To further illustrate this point, let’s say you want to make $100,000 transaction on NEM, the service fee would be 0.1% of $100,000 which is $10.
Difference between NEM Coin and other Cryptocurrencies
- NEM is a unique cryptocurrency. Its features are not found in any other cryptocurrency in the world. For the purpose of this article we will take a look at the major differences.
- One feature that sets NEM apart from other cryptocurrencies is its consensus mechanism “Proof of Importance”. Most Cryptocurrencies use Proof of Stake, or other algorithms. NEM sets itself apart by being the first and only to use the mechanism.
- Another feature that sets NEM apart from other cryptocurrencies is that NEM with its proof of importance calculates and determine the importance of a user based on the total number of XEM he has vested and also based on the number of transactions he has done for over a period of time.
- NEM separates itself from other cryptocurrencies by being the first to adopt “Eigentrust++” as an algorithm security. This device ensures that nodes report accurate information regularly to the network system.
- Unlike cryptocurrencies like Ethereum which does not support multi-signature contracts. NEM sets itself apart by ensuring that their multi-signature contracts are made easier and faster with just a few clicks.
How to get NEM’s Proof of Importance scores:
These importance scores act as motivation for NEM users to keep making transactions and acquiring XEMs. For you to get an Importance score, these steps must be taken:
- A minimum of 10,000 XEM must be vested
- A minimum of 1,000 XEM must have been sent
- 43,200 blocks must have been gotten from harvesting in the last 30 days
- 10,000 vested XEM must have been sent to another NEM eligible user
After these must have been done, a light math is done by the mechanism consensus. The math takes into consideration how much was sent and exactly what time you made your last transaction. Always remember that a transaction that was carried out a day ago is far more valuable than one that was done about 20-30 days ago. After the value of each transaction has been calculated the user will be given a score.
NEM Pros and Cons
- The overhaul of Mijin and rewriting of its programmes has increased the performance level if NEM
- NEM coin can process over 3,000 transactions in a second
- The Introduction of “Namespace’ will help create subdomains for small businesses
- Proof of Importance scores serves as an incentive for users to continue to make transactions. Experts have said that this incentive will help the network in a long term.
- The availability of a design that allows information to be passed in the network
- All considerable businesses can be built on NEM’s blockchain
- NEM coin has a strong Community of talented and innovative developers
- NEM uses 100% less electricity than most Cryptocurrencies. Lesser electricity makes it easier to maintain.
- The official website cannot be understood by most users
- Ethereum which is NEM’s major competition has no significant disadvantage, so it will be difficult for people to make the switch from Ethereum to NEM
- Experts believe that Proof of Stake is a more recognized and effective consensus than NEM’s proof of importance.
- All financial results are not published by NEM
- There is no mention of the team of developers on NEM’s site. This could increase doubts in the heart of potential investors.
- Transactions in NEM are quite expensive compared to the transaction fee of other cryptocurrencies.