New Economy Movement (NEM) has been around for a number of years and it an enterprise-grade solution aimed at providing power for the future blockchain economy. In the beginning, it was supposed to be the fork for NXT, but the community made the decision to implement a new codebase that was completely changed. The alpha version of this codebase was first brought to market in June 2014.
The solution’s earliest stable form of release didn’t come until March 2015. It is being rewritten in the C++ programming language and is expected to be brought to market in the coming months through the expected ‘Catapult’ update.
What type of system is it based upon?
This blockchain provides the power for what is called the Smart Asset System. This upcoming system is set to be open-source and completely customizable for a number of different applications in the sector. This comes as a result of it being constructed on the back of powerful yet simple API calls.
This blockchain is kept secure and the transactions are able to be processed as a result of a group network of nodes that spans the world. It operates thanks to the core software of NEM and utilizes an API Gateway server.
Because of these moves, there is no need for developers planning to develop apps that are powered by blockchain technology to use any form of specialized NEM software because all of this network’s functionality is accessible as a result of the API calls.
This means that developers have a lot of flexibility in terms of designing the system, and the resulting apps can utilize the NEM network optimally. Apps will have direct access to the NEM API by using a server that is separate from the rest. There can also be additional NEM requests made or servers already in existence can use NEM in the background.
NEM addresses are defined by developers and are able to perform as asset containers that can be changed and updated as time goes on. A given address may simply represent a coin wallet or it could signify something that is a bit more complex such as a document that needs to be signed or the collection process of votes in an election.
Developers subsequently create what are called mosaics, which are transferable and identical assets that are representative of coins, votes, signatures or whatever else may be located inside of these addresses.
Using a system where wallet addresses are flexible and mosaics are configurable means that there are numerous use cases. Because all you need is the NEM API in order to access this NEM functionality, any type of system can be built by any party or individual and subsequently be powered by the NEM blockchain in a very straightforward manner.
What about harvesting and proof of importance?
The NEM blockchain utilizes an algorithm called proof of importance, as opposed to the proof-of-stake (PoS) platform that is used by PIVX or the proof-of-work (PoW) platform that is used by the Bitcoin blockchain.
The proof-of-importance platform allows there to be a consensus reached as a result of a process which gives incentives for those parties who take part in the network. This allows the network to be both nimble and decentralized thanks to the nodes that behave well.
Every individual node will have an importance score which will determine what amount of the XEM token (which is the native token of the NEM network) can be harvested by it, whether it is staking or mining that is seen in the PoS or PoW system.
One component of this system is having coins being vested. This occurs when coins are placed in the wallet, as initially they will be unvested coins.
As time goes on, these coins in your wallet will start to vest or will make your account more important. To be able to gain an importance score, you need to have vested XEM of at least 10,000.
This is only one of the components that go into calculating your importance score. As well as being tracked for the vesting, the NEM network’s transaction graph is always being analyzed in order to give info as to which of the nodes are actively contributing and figuring out which ones are not.
Therefore, as the quantity of transactions that you send to other people increases and the greater amount of the network you utilize on a regular basis, the higher your importance score will become. Both the numbers of transactions and the vesting process will be the key determinants in your importance score for every individual node. The resulting importance score will be utilized to scale the probability that your nodes have when it comes to harvesting XEM.
Why is proof of importance so powerful as a concept?
As proof of importance does not need a lot of hardware in order to operate, it means that complete nodes are able to be operated on nearly any type of machine, no matter what sort of capabilities it has in terms of power.
This means that centralization can be prevented. The likes of Bitcoin have a lot if issues currently as a result of large companies and groups conducting large-scale mining operations.
As the Bitcoin blockchain is powered by a process that relies on high levels of power, this means that a lot of complex hardware is needed in order to be profitable.
This has priced out a lot of the small miners from the process. There are a lot of Chinese companies for example now looking to build hubs overseas in order to continue their mining operations. This means that the process becomes a lot more centralized than the creators of Bitcoin would have wanted.
Time needs to be invested into the vesting process for XEM. This means that a lot of bigger parties are prevented from becoming massive earners right off the bat.
It takes some time for them to become profitable. This is a deterrent for a lot of these large-scale groups, which is only a good thing for both the individuals in the sector, as well as the decentralized nature of the network.
With a lot of systems such as Bitcoin, the mining block will be speared to that of the network node. With the NEM system, the running node needs to be secured to the network, with the mining of these coins being completed by using the same type of software.
This means that there is an incentive in place to have a full node running, which means that there is further decentralization as time goes on because the harvesting process becomes more and more profitable.
The proof-of-importance system is something that is unique and appears to hold a lot of promise. It presents an alternative to many of the more traditional methods, which each have their own lists of pros and cons.
What other features does the NEM blockchain have?
There is a specially designed version of the Eigentrust++ algorithm used for NEM which allows the network nodes a reputation-based system. As a result of each node keeping a record of all info that has been received from different nodes (such as transactions and new blocks etc.), it will subsequently be able to verify this info.
If the info is successfully verified, this will lead to an increase in the given node’s reputation and vice versa if the info is bad. All of the reputation for each specific node is sent throughout the network and each node will subsequently be updated.
This means that the load can be automatically balanced and any nodes that are not performing well can be removed entirely out of the NEM network. This is how the network is kept maintained and this ensures that it will operate as quickly and as smoothly as possible.
There are also other features such as having spam features that are built into the network. This means that junk transactions are prevented from having a negative effect on the network, such as flooding it and slowing down the time for transactions to be processed.
There is also a P2P time synchronization system which means that accurate timestamps are ensured without needing external servers to check the time.
The blockchain has encrypted messaging and there is no need for transaction fields to be hacked in order to be able to carry data, unlike what is seen with many other digital coins.
Addresses are multi-signature which means that any developer is able to define shared addresses, as well as allowing for multiparty control when it comes to containers and different types of assets.
The Private vs Public Nature of the NEM Network
As mentioned previously, any person can utilize the NEM network and the public blockchain as a result of the API calls that have been detailed. However, when it comes to apps that need stricter levels of privacy or those who want things to be kept completely within their control, there is a private version of the NEM blockchain which can be utilized through private servers and only uses nodes that have been predefined and chosen by the given user.
With these private networks, a lot of the standout features that are seen with the public network for stopping junk transactions from clogging up the network can be removed. This means that transactions will be even faster and conducted in a closed setup.
Some of the common uses of these private networks include in the space of the logistics of shipping fleets, with transaction data never being exposed as well as having security and speed levels that will be hard to match elsewhere.
This means that it holds a lot of benefits for companies that are looking to utilize blockchain in order to have power for internal tools they currently have and don’t need the additional features that are associated with the public blockchain.
It is clear that there are a lot of great benefits associated with both the public and private NEM networks.
It would not be a surprise to see them become a significant participant in the future blockchain-powered economy. The network allows for simple development, flexibility and a unique proof-of-importance system.
Any company or developer who is looking to create a blockchain solution for their operations will have their needs met as a result of this NEM network.