NEM Network and XEM Cryptocurrency Reviewed
The NEM blockchain platform, powered by the XEM coin, has two networks – one for retail investors and one for the corporate sector. The main network uses a unique Proof-of-Importance (PoI) consensus protocol, where supernode deployment and transaction validation are rewarded.
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NEM is widely considered to have its roots in Japan, but the actual developers behind the blockchain platform remain a mystery. Much like the creators of Bitcoin and Monero, they have chosen to maintain their anonymity, opting for Bitcointalk aliases such as Jaguar0625, BloodyRookie, and gimre.
NEM was founded as a hard fork of NXT, with the first stable version released in March 2015. The abbreviation NEM stands for the New Economy Movement, reflecting its unique features absent from competitors.
NEM's main network
The blockchain platform of NEM, known as NIS (also referred to as NIS1), stands out for its exclusive block verification system, known as Proof-of-Importance (PoI). This algorithm is not just a buzzword, as it is solely utilized within the NEM network and nowhere else. In contrast to Proof-of-Work and Proof-of-Stake mechanisms, where hash rate and coin stake determine rewards, PoI assesses each node's adherence to three criteria at the same time.
The key indicators for each node in the NEM network are:
- the minimum coin balance and the length of time they have been held in the wallet;
- the number and size of transactions that have already been validated by the node;
- the quality (transaction activity) of partners.
Unlike PoS, PoI rewards active transactional participants rather than simply encouraging the accumulation of coins in the wallet. Additionally, this model is not as energy-intensive as PoW with its industrial mining.
NEM does not support mining, primarily due to the PoI consensus algorithm it has adopted. Additionally, all 9 million XEM coins were pre-issued at the launch of the network, similar to other assets with a 100% pre-mine. In the absence of mining, network participants are incentivized to validate transactions by deploying supernodes, which is known as “harvesting” and leads to rewards.
A supernode in NEM can be compared to a masternode in other blockchain networks, although NEM has chosen to give it a unique name. To become a supernode owner in NEM, an individual must maintain a minimum balance of 3 million XEM and participate in the distribution of rewards for harvesting.
NEM offers a delegation function for harvesting that allows community members to participate in the network's transaction validation process and earn rewards without owning a full supernode. By connecting to any supernode, smaller stakeholders can delegate their harvesting activities and receive a share of the rewards. This is similar to the concept of mining pools in PoW networks.
According to CoinMarketCap, XEM coin is ranked 106th, with a market capitalization of over $354 million.
Another blockchain solution for the corporate sector
In March 2021, NEM launched its second blockchain, Symbol, designed to bring decentralized applications (dApps) and corporate products and services to market. Symbol operates in parallel with the existing NIS network for retail investors and uses its own cryptocurrency, XYM, specifically tailored to enterprise clients.
Representatives of NEM have assured that the launch of Symbol will not lead to the gradual phase-out of NIS. As a result, these two L1 blockchains will continue to operate in parallel, offering services to different customer segments.
NEM is promoting Symbol as the next-generation blockchain platform for enterprises, businesses, and companies of all types. It is positioned as the ideal solution for such entities.
Symbol — The Corporate Blockchain Solution
NEM Group
The non-profit organization, NEM Foundation, was founded in Singapore in 2016 with the aim of financing and supporting the NEM project. The first president of the Foundation was Lon Wong, who is an entrepreneur in the technology industry from Singapore.
As the NEM ecosystem grew, new areas of focus were identified, leading to the creation of separate autonomous entities. Consequently, a group of companies emerged, including NEM Software, NEM Ventures, NEM Trading, and others, which are all under the control of NEM Group.
Wallets and exchanges
The XEM cryptocurrency can be traded on several major exchanges like Binance, OKX, and Huobi. Additionally, it's supported by many popular wallets, such as Atomic, Guarda, and Freewallet. The XEM Nano Wallet is the platform's native wallet.
Final words
NEM has great potential to attract private investments and interest from large businesses, boasting numerous successful collaborations with well-known brands. The platform's unique PoI consensus algorithm, which uses the harvesting model, enables the NIS blockchain to operate smoothly and efficiently without any delays. By implementing the Symbol blockchain, NEM has been able to engage corporate clients and big companies in collaboration.
Built with a business-oriented focus, the ecosystem and structure of NEM work towards attracting venture investments and improving the corporate-level platform, while also considering the needs of retail investors. All of these efforts show that the NEM project will remain viable and relevant in the future.
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