Updated: Dec 20, 2019
This guide will explain what NEM (XEM) was designed for, the team behind it, how it works, and the various uses and applications.
What is NEM Designed For?
NEM was created as a blockchain technology to build on and improve the basic functionality of pioneering cryptocurrencies (such as Bitcoin and Ethereum), and deliver a platform that allowed the management of any kind of asset, including supply chains, currencies, notarizations, and ownership records.
Initially, NEM started as an NXT fork, which means that developers essentially copied the open-source code of NXT, and then began changing that code to perfectly match their vision. Such open-source code and projects are not just allowed, but also encouraged.
The creators realized that the process of mining gobbled up a lot of electricity and that people were more apt to hoard these coins. NEM was an environment-friendly solution to these issues. Proof-of-Importance (PoI) allows NEM to run on a computer as simple and cheap as a Raspberry Pi, which takes up very little electricity and costs only $35. It also encourages people to use XEM rather than store it.
Who Is the Team Behind NEM?
NEM was launched in March 2015 as little more than a proof-of-concept built by the development team at NEM.io Foundation, which is still the driving force behind the NEM platform. The founding president of the NEM Foundation, Lon Wong is also the co-founder of NEM (XEM).
NEM has partnered with several companies and enterprises that play an integral part in its success. The list includes Tech Bureau Corp., Dragonfly Fintech, Atraura Blockchain, Blockchain Global, Kchain and Sumeru Inc. among others.
How Does NEM Work?
NEM’s blockchain technology was developed from the ground up to provide scale and speed to all users. Its permission private blockchain is known to deliver industry-leading transaction rates among all internal ledgers.
Also, the Supernode program and revolutionary consensus mechanism (PoI) ensures that NEM remains as an open and public blockchain, which can grow without having to compromise on scalability or throughput.
To understand how PoI works, consider this example:
John receives 20,000 XEMs in the proprietary Nano Wallet for NEM, which is vested at the rate of 10% every day by NEM’s mechanism. After the first day, 2,000 XEM will be vested and on day two 3,800. After the seventh day, the vested XEM will cross the 10,000 thresholds and qualify John to receive blockchain rewards.
Apart from this, PoI also rewards transactions made on the network which increases a participant’s chance to earn more rewards. However, to prevent dummy transactions (back and forth) between two users the net transaction amount is considered.
NEM was built keeping a two-tiered design in mind, which means that if you want a wallet, you don’t have to invest in a full node or a copy of the blockchain. Instead, you can simply connect to any node and gain access to all features without having to trust it.
What are Current and Future Applications of NEM?
NEM is the only platform that is created on the same system used to build Linux. It is widely accepted as being the most secure OS in the business world. The platform is also the only cryptocurrency, which has been stress-tested by numerous banks to be approved for financial use.
Some real-world applications of NEM are:
NEM can be used to make global transfers and instant payments. The ability to seamlessly interface between public and private blockchains allows the blockchain to transfer tokens, files, or currency from an internal company network to the public blockchain, and into the recipient company’s network.
NEM is capable of documenting all business transactions, which remain untameable and permanently-preserved in the blockchain. It can also be used to keep track of customer information in real-time. The ability to host multiple asset types in a single ledger reduces the risk of loss, saves costs, increases security, and ensures customer records are permanently available.
NEM is useful for encrypted messaging, notarization, authentication, and anti-counterfeiting. A user’s private key can be used to maintain security in messages. NEM is one of the few crypto platforms where transmission and data storage has never been hacked or compromised in any way.
XEM can be used to make payments at various merchants or traded and used as an investment. Many third-party crypto exchanges trade XEM, such as Poloniex, BTC38, Zaif, HitBTC, Bter, and Changelly.
You can use XEM to pay for goods purchased at nembid, which is a similar platform to eBay. You can even use it on Zazzle to pay for apparel and accessories. NEM has a proprietary site called mynem.store which sells products, like hats and mugs related to the cryptocurrency and accepts XEM as payment.
NEM has opened up a wide variety of possibilities for the new age of blockchain. It strives towards building better and improved blockchain systems by hitting directly on the pain points of existing blockchains. The NEM tagline “Smart Asset Blockchain, Built for Performance” sums it up perfectly.