Launched in 2015, the cryptocurrency NEM is chiefly known for having introduced the Proof-of-Importance (PIF) algoritm to the blockchain universe. Also, NEM uses multisignature accounts and the Eigentrust++ reputation system.
NEM is a peer-to-peer cryptocurrency and blockchain plaform created in Java. With the NEM system, multiple ledgers can co-exist on the same blockchain without conflict. Thanks to the NEM Smart Assets, users can create moasics to represent any asset, including cryptocurrency coins.
There are two main compents of the NEM design architecture: the NEM Infrastructure Server (NIS) which is the node server, and the Client which is used for interacting with the nodes.
Namespaces is NEM’s naming system for domains, and it can handle both higher-level domains and lower-level domains (subdomains). With a standard domain, an individual user can thus create a large number of subdomains.
NEM implements a version of multsig (multi-signature) technology known as as m of n multisignature, where m ≤ n. A transaction will not be broadcast into the blockhain until a certain number (m) of signatories out of the total number of signatories (n) have signed the transaction.
How old is NEM?
NEM was launched in March 2015.
A driving force behind the creation of NEM was the Bitcoin Talk forum member ”UtopianFuture”. An open call for project participation was posted in the forum, urging people to join if they wished to create a community-oriented cryptocurrency. Eventually, the new cryptocurrency was launched, on March 29, 2015.
Launch: March 2015
Genesis Block Production: Fixed 8,999,999,999 XEM total
Issuing of new coins: Fixed decentralised P2P consensus
Transaction fee: Transaction fees are paid with XEM, the native token of the NEM system.
Block time: 1 minute
Subdominations: 1 XEM is equal to 0.001 mXEM (milliXEM). There is also the subdomination µXEM (microXEM), with 1 XEM being equal to 0.000001 XEM.
NEM uses Proof-of-Importance (POI) to score how an individual can harvest XEM. The idea is to encourage users to actively carry out transactions instead of just stockpiling XEM.
- The number of transactions you carry out (with other users) influences your score.
- You will only be scored if you have at least 10,000 XEM in your balance. With a lower balance, you will have no score.
NEM uses a version of EigenTrust called EigenTrust++. Both are reputation management algorithms for P2P networks.
With EigenTrust++, there is a strong focus on quality of work when assigning reputation to a node.
Refusal to hard-fork
In the past, some cryptocurrencies have been hard-forked to restor stolen coins. The decision to fork has always been a controversal and highly contensious one within the cryptocurrency communities. It therefore garnered a lot of attention (and both praise and critisism) when the NEM development team in early 2018 refused to fork NEM efter a theft of 523 million XEM coins (roughly 400 million USD at the time) that took place in January 2018.
On the 26th of Januari, 2018, hackers attacked the cryptocurrency exchange Coincheck and stole 523 million XEM coins. No other cryptocurrency coins were stolen, because the hackers specifically exploited a weaknesses in Coinchecks implementation of NEM.
After being informed of the heist, the NEM development team steadfastedly refused to carry out a hard fork to restore the stolen coins. Instead, they created an automated taggin system that followed the stolen NEM coins and tagged the accounts that recieved them. A large amount of data was gathered in this fashion and handed over to the law enforcement authority. After delivering the data, the NEM development team stopped tracking the coins around mid-March 2018.
What is Mijin?
Mijin is a private commercial blockchain based on NEM software and owned by the Japanese software development company Tech Bureau. The aim of Mijin is to make institutional banking more secure and also less costly.
Side note: Tech Bureau, which is based in Osaka, owns Zaif, a cryptocurrency exchange licensed and regulated by the Japanese Financial Services Agency.