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What Is NEM? Introduction To XEM

NEM is a blockchain platform for apps (like ETH) , but with an innovative consensus.

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One of the quieter cryptocurrencies near the top of the market capitalization list is NEM, which stands for New Economy Movement.* Its token, XEM, is consistently a popular asset for ‘platform lovers’.

NEM itself is a blockchain technology, much like Ethereum, with its base token being XEM. XEM performs the same functions on the NEM blockchain as ETH does on Ethereum. Other tokens could potentially be launched on NEM and even have a higher value than it does, depending on their application.

Importantly, NEM introduces a new type of consensus. Where Bitcoin uses Proof-of-Work (PoW) and others use Proof-of-Stake (PoS), NEM uses Proof-of-Importance, which is based on PoS. Proof-of-Importance asserts the idea that both the amount of network activity generated by a wallet and its balance of tokens should play a role in determining the “weight” wielded by that particular node.

Thus, while in a typical PoS system a user with more tokens would receive more of the block reward or transaction fees than others, in the NEM Proof-of-Importance system, it is possible for a more active user with a smaller balance to earn a larger share of such rewards or fees.

A prevalence of choices for blockchain technology can have two converse effects on the growth of cryptocurrencies as a whole. On the one hand, the more options that developers have, the more likely their skillsets are to match the demands of developing for the blockchain.

On the other hand, the greater separation in technology and network between decentralized applications, the less potential impact of the networks as a whole.

In any case, blockchain as a whole investment genre is relatively new and there are at least five base blockchains on which to build decentralized applications, with several subsistent ecosystems built on top of Ethereum in addition to Ethereum itself. NEM falls into the order of things by offering yet another option for developers in need of the efficiency and other benefits offered by the blockchain.

NEM Smart Assets

Like the NEO “Smart Economy,” NEM launched a few years ago with the goal of modernizing “smart assets” which were then only just coming into existence. NEM makes the correct assessment that existing blockchain asset management amounts to one-time, fixed data, that cannot be altered or transferred in the future.

According to NEM’s pseudonymous founder UtopianFuture, this situation can be rectified with more modern designs which allow for the seemless transfer and issuance of assets. A token which could secure such transactions financially would carry value — thus enters XEM.

Like Ethereum or other tokenized blockchains, NEM allows developers to build their own decentralized applications, and even their ecosystems for such applications, using the XEM token to pay for actual transactions executed on the network chain. This is what makes the token itself important.

What Is XEM?

There are almost 9 billion XEM and they have been circulating since 2015. For most of their lifespan they held little value, but in more recent months there have been significant increases in demand due to important news of new applications being built with NEM technology.

XEM fees differ according to what is being done, and similar to the PoI scheme, multiple types of behavior are accounted for. A fee for every 10,000 XEM is assessed while at the same time a fee for the size of the transaction is also assessed. In Bitcoin and other cryptocurrencies, only the size of the transaction itself. But in the NEM system, it is important to have an incentivized, fee-based system in place in order to continually reach consensus.

NEM and Catapult

One of the first products launched by the NEM foundation itself is called Catapult. With a whitepaper written by Lon Wong, Catapult aims, pun intended, directly at the heart of the intersection of business and the blockchain. It does this by noting that multiple ledgers are inefficient within an organization, and that it would ultimately be simpler and more efficient to take a blockchain approach.

A blockchain solution with multiple ledgers for multiple assets provides a transformation approach to addressing this issue.

Both within the much smaller morass of individual banks and out into the wider web of financial networks, it’s a great nightmare of a mess fraught with fee after fee. At every level, the blockchain can help. Catapult aims to ease the inevitable addition of such financial institutions.

From a technology standpoint, middleware becomes a thick layer that binds this monolithic construct with a potpourri mix of traffic and information traversing across all different ledgers, applications, and services. It not only poses operational risk, but it also takes a lot of the resources which the bank could otherwise do without in managing problems and errors in these transactions. […] There is a need to standardise the existing core banking solution to make it more efficient. Currently, standardisation happens at the middleware layer and systems rely on this middleware layer to talk to one another.

Apostille (Notary)

By default, NEM’s network offers the ability to notarize documents and provide timestamps in a more modernized way, where both ownership and importance of the asset can be transferred to other parties. A realistic use of blockchain for notarization is one where records can be updated without necessarily having to establish an entirely new entry, among other useful additional features. This is specifically what is offered in the new product from the NEM Foundation, Apostille.

The Apostille system’s key innovation is taking data which represents an underlying person, place, or thing and giving that data its own private key derived deterministically from its contents. This is used to create an account that represents the state of that object. These are dynamic accounts that can be used to prove authenticity, show ownership, and record updates, as well as be branded, transferable and conjointly owned.

NEM Summary

  • NEM is its own independent blockchain.
  • XEM is the first, most important token issued on the NEM chain.
  • Anyone can issue tokens as well as tokenize real world assets.
  • The NEM chain is already being used for two applications: Catapult and Apostille, both of which make the NEM blockchain’s usefulness readily available to businesses.
  • *The ICO, token, and technology aren’t related to the New Economy Movement, a (so-called) and disparate group of proto-Marxist western thinkers.

 

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