NEMNEM is a peer-to-peer cryptocurrency and blockchain platform launched on March 31, 2015. The platform allows users to use NEM as a means of financial payments (like bitcoin) and also the building of smart contracts.
What is NEM?
NEM is a peer-to-peer cryptocurrency and blockchain platform launched on March 31, 2015. The platform allows users to use NEM as a means of financial payments (like bitcoin) and also the building of smart contracts. The NEM developers are pseudonymous. NEM was started by a Bitcoin Talk forum user called UtopianFuture who was inspired by Nxt. The initial plan for NEM was to create a fork of NXT, but this was eventually dismissed in favor of a completely new codebase.
How does NEM work?
There are two NEM blockchains in existence. One is the private permissioned ledger, and there is also an open public blockchain at users’ disposal. Both blockchains can interact with one another without any problems. This allows businesses to build real-world applications and smart asset systems. The public NEM blockchain is the one which people can access through regular network nodes. The permissioned, private NEM blockchain must be run on one’s own servers.
NEM uses a consensus mechanism known as proof of importance. A NEM user's importance is determined by how many coins they have and the number of transactions made to and from their wallet. POI is different from other initiatives which use a fee-sharing model that does not take into consideration one's overall support of the network. In proof-of-stake systems a person needs to have large numbers of coins to form a block, but in NEM transactions volume and trust become factors. This was designed to encourage users of NEM to not simply hold XEM but instead actively carry out transactions.
When NEM was originally launched, all the coins were distributed to members and then the members distributed them amongst their community and the only way to earn NEM is by processing transactions. The transaction fees are paid to the people that are running the supernodes.
NEM implements multisig (short for multi-signature) technology on its platform. Multisignature accounts require that another user or users sign a transaction before it can be broadcast onto the blockchain. This means that if one person loses their wallet through a hack, no money can be spent unless another wallet (or wallets if m is more than 2) signs it. Multisignature accounts also help protect community-held funds, in that a majority of designated users must agree before a transaction can be spent from a community-held wallet. This is especially important considering over a third of all XEM in circulation is held in these community wallets.