Designed for speed, and offering both a private and public blockchain, can NEM deliver where others have failed?
The New Economy Movement or NEM for short was originally meant to fork NXT. Now running fresh code as a completely independent project, what’s NEM all about, and how does it work? Here’s everything you need to know.
What Is NEM?
NEM is a smart asset blockchain, designed from the ground up for scalability and speed. NEM began when Bitcoin Talk forum user UtopianFuture drew inspiration from NXT to create a new community aimed cryptocurrency. This project launched in March 2015.
NEM scales to 4000 transactions per second (TPS) under the correct conditions and has zero inflation. Powered by the XEM token, there is a maximum circulation supply of 8,999,999,999 XEM. There will never be any more XEM tokens created.
The NEM Foundation oversees the development of NEM from Singapore. The foundation exists to develop the project and encourage its worldwide adoption. Alexandra Tinsman is the current president, but the foundation leadership team comprises of an executive committee, council, and twelve founding members.
NEM is easy for developers to use and this is by design. If you’ve never developed blockchain apps before, NEM could be your foothold into the industry. Otherwise, seasoned blockchain developer veterans will find plenty of modern features and raw power within the network.
How Does NEM Work?
The NEM technical reference covers every intricate aspect of the blockchain, in 58 pages of detail. Here’s what you need to know.
NEM’s blockchain starts with the foundations laid by Bitcoin and Ethereum. NEM implements a new Proof of Importance (PoI) concensus algorithm, which is an improvement on Proof of Stake (PoS).
…incorporates other behaviors that are believed to be positive for the holistic economy.
According to NEM, PoS favors the “rich”, or those with big crypto balances. With PoS, you get a larger reward for staking more coins. PoI takes the basic concept of PoS but favors accounts who get involved in the community, be it voting, transferring coins, or just being active. In this way, the creators hope to favor users who actually contribute to the community, and don’t stake a huge wallet balance and leave it at that.
NEM uses both a public and permissioned blockchain. For most blockchain uses, the powerful public blockchain is enough. For serious or legally-bound enterprise uses, you can host your own permissioned NEM server. This server may give you the peace of mind you need. This dual public/permissioned approach is in line with NEM’s community ethos and ensures there are plenty of users, regardless of business size or requirements.
NEM lets you build applications using current industry-standard web technologies such as JSON and RESTful API calls. NEM uses smart contracts, like many other blockchain projects, but this simplicity of configuration means you don’t need to learn a new programming language or have to write NEM-specific code to create a contract.
NEM’s smart assets consist of four key components:
- Address assets
- Mosaic assets
Address assets are essentially your smart contract. These may be NEM account details, but could also be user data, sales information, shipment tracking, or anything else your applications need to store. These assets are configurable with different rules, based on your requirements.
Mosaics live within an address asset. Mosaics are smart assets that do not change. This could be company shares, a record of gold bullion ownership, or anything else.
While address assets are the smart contracts themselves, Mosaics are like a currency. You can transfer Mosaics between addresses. You could, for example, use an address as a wallet, and the mosaic as your currency. The unique feature here is that you can create your own rules and definitions about how addresses and Mosaics work. You’re not limited to any pre-conceived ideas of how smart contracts or currency work.
Namespaces are a unique name for your smart asset project. Designed to almost exactly mirror domain names, a namespace must be unique across all applications running on the network. Once created, your users can trust that this name belongs to your app, and isn’t some automatically generated combination of letters and numbers. Once you have a unique namespace, you can create unlimited sub-namespaces, to further segregate your application components.
Transactions let you transfer Mosaics or Addresses between other assets or users. This is where you can enforce any custom rules. NEM handles the hard work for you here, and it synchronizes your transaction with its blockchain, so you know every transaction is always valid and stored on the network.
NEM uses an algorithm known as Eigentrust++. This lets nodes reject bad nodes through a reputation system. It also balances the load across the network, which ensures a balanced and healthy blockchain. NEM contains built-in spam protection, which ensures nodes do not get swamped with bad or spam transactions, while still allowing the processing of good transactions.
How Do You Buy NEM?
NEM has been around for a long time now. Almost all the big exchanges trade XEM, and if you’re not sure which one to use, our guide to the best exchanges may help. It’s not possible to buy XEM on Coinbase.
NEM reached its all-time high price of $2.17 on 4th January 2018. Since then, the price has plummeted along with the rest of the market. It’s currently trading at roughly 2.5% of this all-time high price at $0.058.
NEM’s Future Potential
It’s hard to predict the future of any asset, especially one as volatile as a cryptocurrency. Nevertheless, NEM has built a solid foundation and has proven itself to be a reliable project.
NEM’s roadmap contains details of an upcoming core release known as “Catapult”. Catapult introduces a host of new “industry-first” features to the blockchain, along with an improvement in speed, security, and scalability. You can learn more about Catapult through the official Catapult Server GitHub repository.
Join the NEM Community
If you’d like to get involved with NEM or want to learn more, then take a look at these NEM communities:
- NEM official Facebook page
- NEM official GitHub repository
- NEM official Telegram group
- NEM official Twitter account
- NEM official subreddit
If you’d like to look at an alternative smart contract blockchain, why not read our Ethereum coin study?