The blockchain industry was initially introduced as a mode of payment. But after observing the mass adoption of blockchain networks, the developers started introducing more features to this industry. Ethereum is one of the leading platforms that showed that the blockchain can be more than just a mode of payment. Many other crypto projects were launched following Ethereum’s footsteps. NEM was one of the early projects that followed the model of Ethereum.
What is NEM (XEM)?
Nem, New Economy Movement, is a blockchain-based protocol that enables users to build smart contracts and decentralized apps on its platform. The developers can also launch custom tokens using this platform. New Economy Movement is claimed to be a Smart Asset System (SAS) that can be used to build custom infrastructures like multi-signature security systems, supply chain tracking, and more.
Blockchain Domain Names
New Economy Movement is dedicated to providing a decentralized form of the traditional internet. It has introduced a feature called NameSpaces that is similar to name.com and domain.com because users can create a unique name for their service using this feature. Thus, the customers won’t have to enter long wallet addresses to transfer payments to a service provider.
It also creates a connection between public and private blockchains. It means that users can easily transfer tokens from one network to another with the help of smart contracts. Thus, it provides more flexibility and adaptability for customers and companies at the same time.
New Economy Movementincorporates the EigenTrust++ algorithm to monitor the performance of node operators throughout the validation process. The system automatically removes the non-active nodes from the platform. The node operators can lend reputation points to other node operators with the help of a security clustering algorithm.
Thus, it offers better performance and efficiency as compared to other generation one and generation two blockchain networks.
Transactions with Multiple Signatures
New Economy Movementintroduces a multi-signature transactions facility within the platform rather than using third-party off-chain solutions. This blockchain enables users to store all multi-signature smart contracts on its network. This feature is quite helpful for companies that want to run several business operations smoothly.
NEM Brief History
NEM was introduced as a hard fork of NXT in March 2015. However, the team decided to rebuild the infrastructure from scratch because they wanted to use this blockchain network for a different purpose. So, they ended up introducing a completely new codebase by the end of the year.
As a result, it started offering better speed and scalability as compared to the NXT network. The NEM created the NEM foundation in 2016 after the successful launch of the project. NEM foundation is primarily focused on enhancing the adoption of the New Economy Movement protocol.
NEM’s price skyrocketed during the 2017 bull market. Unfortunately, it became the victim of the biggest cryptocurrency hack in the crypto’s history. And the hackers stole $530 million worth of XEM tokens from a popular exchange. The platform couldn’t recover from the damage even after months.
Furthermore, the XEM token’s price significantly crashed when the New Economy Movement foundation announced that it was planning to lay off its entire 150 employees due to budget issues. It badly damaged the reputation of the platform because most investors claimed that the platform is controlled by a few select people.
Although New Economy Movement Foundation addressed these issues with proper evidence, the XEM token’s price couldn’t recover after that. The team is now working on introducing new ideas to bring back its reputation.
How Does NEM Work?
NEM uses a Proof-of-Importance consensus mechanism for validating transactions. The Proof-of-work consensus mechanism requires expensive hardware to complete the verification process. Proof-of-Stake consensus protocol requires a huge amount of crypto tokens to be locked and it has a higher risk of being controlled by a few select entities because it chooses validators depending on the tokens they have staked.
Proof-of-Importance is a variation of these consensus protocols. First of all, the users need to vest 10,000 XEM tokens to become a validator. The network then selects the validators depending on the transactions they’ve performed over time. It means if a validator isn’t making the required transactions, the network will eliminate them automatically.
The best thing about the NEM protocol is that it even rewards the users for sending tokens to other blockchain networks. Moreover, the network also rewards the users who help with creating new blocks.
The Proof-of-Importance protocol is pretty similar to delegated proof-of-stake consensus mechanism because users are linked to a supernode when they vest 10,000 XEM tokens. Thus, the network consumes less energy to complete the transactions. Thus, it proves to be a competitive choice for businesses that are concerned about sustainability.
XEM is the native token of the New Economy Movement network that can be used to transfer funds from one account to another. The users can lock their XEM tokens to participate in the transaction validation process. Moreover, the network rewards XEM tokens when a user creates a new block. With a circulating supply of 8.99 billion tokens, XEM has a market cap of $356 million.
It became the fourth-largest cryptocurrency during the 2017 crypto bull run. But now, it ranks among the 100 best cryptocurrencies in terms of market cap.
New Economy Movementis a decentralized network primarily designed for enterprises and small businesses. It enables users to build smart contracts, decentralized apps, and other programs on top of its network. It uses a Proof-of-importance consensus mechanism to quickly complete the transaction verification process. Feel free to get in touch with us if you need more information about how New Economy Movement works.