What is NEM?

Introduction

New Economy Movement (NEM) is an innovative platform built using blockchain technology that provides a set of feature-rich and user-friendly solutions to help enterprises and individuals achieve secure, scalable, and efficient asset management. NEM was launched in 2015, and its core technology is the NEM blockchain based on distributed ledger technology. NEM aims to democratize access to blockchain technology, empowering enterprises and individuals to easily harness its benefits to achieve efficient, secure, and transparent asset management and transactions.

Source: https://nemproject.github.io/nem-docs/pages/

NEM is designed with a focus on simplicity and user-friendliness. Compared with other blockchain technologies, NEM aims to balance scalability, superior performance, security, ease of use, utility, and ecosystem development. This makes NEM a more competitive blockchain solution suitable for various use cases and industries.

NEM incorporates an innovative concept called “Smart Asset System,” which allows users to create and manage various types of digital assets easily. These digital assets, known as “mosaics,” can represent diverse assets such as currencies, stocks, points, etc. Through this approach, NEM makes itself highly flexible and scalable, enabling enterprises and individuals to customize asset management solutions according to their specific needs.

In addition, NEM offers a range of powerful features, such as multi-signature, a node reputation system, and programmable smart contracts. These features enable NEM to cope with complex business scenarios and provide secure and efficient solutions. For example, multi-signature ensures the security of assets and transactions by preventing unauthorized access and operations. The node reputation system identifies and penalizes malicious nodes to ensure the stable operation of the entire network. Programmable smart contracts provide developers with convenience, enabling them to build and deploy blockchain applications easily.

To achieve high performance and security, NEM adopts a consensus mechanism called Proof-of-Importance (POI). Different from traditional proof-of-work (POW) and proof-of-stake (POS) mechanisms, POI takes into account the activity and contribution of users in the network, thus ensuring better network performance and security. In addition, the POI consensus mechanism is energy-efficient as it does not require significant computing resources and energy consumption. This makes NEM a more environmentally friendly blockchain solution. Compared with other blockchains, NEM’s POI consensus mechanism reduces the demand for computing resources and lowers energy consumption, making it a favorable solution to achieve sustainable development.

The NEM ecosystem comprises multiple components, including the NEM Foundation, the developer community, and enterprise partnerships. They collaborate to promote the development and application of the NEM technology. The NEM Foundation is committed to promoting and supporting the global development of NEM technology while the developer community provides NEM with strong technical support and innovation. In addition, NEM has established partnerships with enterprises and institutions in various industries to explore the application of blockchain technology.

NEM has demonstrated diverse applications in fields such as finance, supply chain management, the Internet of Things (IoT), and copyright protection. For instance, in finance, NEM enables more efficient and secure payments and cross-border remittances. In supply chain management, NEM supports real-time and reliable data tracking to ensure the transparency and security of the supply chain. In the IoT space, NEM can facilitate device authentication and secure data exchange to improve the security and reliability of IoT systems. In the field of copyright protection, NEM can help creators ensure the originality and intellectual property rights of their works.

Furthermore, NEM has its native token, XEM, which is used to pay network transaction fees and incentivize ecosystem participants. The XEM token has multiple usages, including transaction fee payment, voting weight allocation, node incentives, etc. The circulation and utilization of the XEM token further promote the prosperity and development of the NEM ecosystem.

In short, NEM is an innovative platform built using blockchain technology, aiming to provide enterprises and individuals with efficient, secure, and user-friendly asset management and trading solutions. With its scalable Smart Asset System, high-performance POI consensus mechanism, comprehensive features, diverse application scenarios, and thriving ecosystem, NEM showcases its competitiveness and potential in the field of blockchain technology.

The History of NEM

The history of NEM can be traced back to January 2014, when a user named “UtopianFuture” proposed on the Bitcoin forum to create a new project based on the NXT blockchain technology. Subsequently, a group of like-minded developers joined the project and began working on NEM.

2014 - 2015: The NEM development team engaged in extensive development work in 2014 and 2015. They focused on creating a fully self-contained, Java-based blockchain platform that can provide businesses and individuals with various services, such as asset management, payment processing, and encrypted messaging.

2015: NEM was officially released on March 31, 2015, and introduced its native digital currency, XEM. NEM employs a consensus mechanism called Proof of Importance (POI), which aims to reward users who made significant contributions to the network.

2017: NEM started to gain global traction, especially in Japan and other Asian countries. During the cryptocurrency boom in 2017, the market capitalization of NEM skyrocketed, making it one of the top ten cryptocurrencies in the world by market capitalization.

2018: The NEM Foundation was established, which is dedicated to supporting the development and promotion of the NEM blockchain. During this time, the NEM Foundation funded various projects, including cryptocurrency exchanges, wallets, business solutions, and more.

2020: NEM released the Symbol blockchain, which is a significant upgrade of the NEM ecosystem. Symbol focuses on enterprise-grade applications and provides advanced blockchain tools to help enterprises develop and deploy blockchain solutions more easily.

2021: NEM continued to grow. It established partnerships with more partners, gradually expanding its ecosystem. At the same time, the NEM community is also working hard to improve the technical infrastructure to improve the performance and scalability of the platform.

NEM’s Key Features

NEM Smart Asset System: An Innovative Platform for Digital Asset Management and Trading

All codes of NEM are rewritten in the JAVA programming language. One of its core innovations is the Smart Asset System, which is a highly customizable, secure, and user-friendly blockchain infrastructure that allows users to create, manage and trade various digital assets on the NEM blockchain.

The core components of the Smart Asset System include:

Customizable assets (mosaics): On the NEM platform, users can easily create and manage custom assets called “mosaics.” Mosaics can represent various types of assets such as tokens, stocks, bonds, commodities, and more. Users can define their properties, such as total supply, divisibility, and transferability, according to their own preferences. Additionally, mosaics can be traded using NEM’s native token, XEM.

Namespaces: To ensure asset uniqueness and prevent conflicts, NEM uses a namespace system. Namespace is the NEM analog of internet domain names, providing unique identifiers for assets. Users can register a unique namespace on the NEM platform and use it to identify the mosaics they create.

Programmable transactions: NEM supports programmable transactions, allowing users to create custom asset transaction logic. This can be used to implement more complex transaction rules such as transaction restrictions, time locks, etc. In addition, users can also create self-executing smart contracts for assets to enable advanced functionality.

API integration: NEM provides a set of RESTful API interfaces, allowing developers to easily integrate the NEM Smart Asset System into existing applications and services. This helps lower the barrier for developers and attracts more developers to join the NEM ecosystem.

NEM Blockchain Platform: Integration of Multi-signature, Node Reputation System and Smart Contracts

NEM also provides a range of innovative features, including multi-signature technology, a reputation system for nodes, and programmable smart contracts. These features provide users with enhanced security, decentralization, and flexibility.

multi-sig Contracts

multi-sig is a security mechanism that requires multiple participants to approve a transaction before it can be executed. On the NEM platform, users can create multi-sig contracts to manage assets and execute transactions.

multi-sig contracts enjoy the following advantages:

Security: multi-sig contracts require the joint approval of multiple participants, which helps prevent unauthorized access and manipulation. Even if one participant’s private key is compromised, the attacker cannot execute the transaction, thus enhancing asset security.

Permission management: multi-sig contracts can be used to implement complex permission management, such as shared assets among enterprises, organizations, or family members. Users are free to assign permissions and responsibilities as needed.

Auditing: multi-sig contracts make transactions more transparent, facilitating auditing and regulatory compliance. All participants can view and review transactions to ensure their compliance and reliability.

Reputation system for nodes (Eigentrust++)

To ensure the security and decentralization of the NEM blockchain, NEM employs a node reputation system called Eigentrust++. The main goal of the system is to evaluate and rank the trustworthiness of nodes in the network so that appropriate nodes can be selected during the consensus process.

Eigentrust++ enjoys the following characteristics:

Decentralization: The Eigentrust++ system helps prevent network centralization by performing decentralized trust evaluation on nodes. This helps ensure the stability and security of the network.

Adaptability: The Eigentrust++ system can automatically adjust the trust scores of nodes according to their behaviors. If a node performs poorly (e.g. going offline, refusing to execute transactions, etc.), its trust score will decrease. This helps incentivize nodes to maintain good behavior.

Attack resilience: Eigentrust++ system can withstand various network attacks, including Sybil attacks and Eclipse attacks. By fostering trust among nodes, Eigentrust++ helps ensure the security and robustness of the network.

Programmable Smart Contract

NEM supports programmable smart contracts, allowing users to create and deploy custom contracts on the blockchain. Smart contracts are self-executing programs that can be used to implement various complex transaction logic and business processes.

NEM’s smart contracts enjoy the following characteristics:

Flexibility: Users can create various types of smart contracts according to their needs, such as crowdfunding, voting, auctions, etc. Smart contracts can realize diverse business scenarios and cater to different user requirements.

Efficiency: Smart contracts are executed automatically without manual operation. This reduces operational costs and improves transaction efficiency.

Security: Smart contracts run on the blockchain and are protected by cryptography and distributed consensus. This ensures the security and reliability of the contracts.

Transparency: The execution process of smart contracts is open and transparent, allowing all participants to review the contracts. This ensures the fairness and credibility of the contracts.

The NEM blockchain platform provides users a secure, decentralized, and flexible solution through features including multi-sig contracts, the node reputation system, and programmable smart contracts. multi-sig technology helps improve asset security and realize complex permission management. The node reputation system ensures network security and decentralization. The programmable smart contracts provide users with various application scenarios and efficient transaction methods. These innovative features make NEM a competitive blockchain platform that has attracted the attention of many developers and enterprises.

NEM Blockchain Innovation: POI Consensus Mechanism Combining POS and User Activity

Another core innovation of NEM is the adoption of a consensus mechanism called Proof-of-Importance (POI). POI is an improved version of the Proof-of-Stake (POS) algorithm, which aims to provide a more fair, decentralized, and secure network consensus.

POI consensus mechanism mainly enjoys the following features:

Comprehensive consideration of accounts’ importance: Unlike the traditional POS algorithm that only considers the account’s balances, the POI algorithm also considers user transaction activities and transactions with other accounts in the network. This means that accounts with higher importance scores not only need to hold more tokens, but also need to participate in trading in the network actively.

Incentive participation: The POI consensus mechanism incentivizes users to participate in the network by rewarding those who contribute to the network. This helps improve the security and activity of the network while avoiding the problem of wealth concentration among a few nodes.

Transparency and security: The POI consensus mechanism uses encrypted signature and timestamping technology to ensure the traceability and immutability of transactions. In addition, the POI algorithm can also defend against various security threats including double-spend attacks, long-range attacks, etc.

Decentralization: The POI consensus mechanism achieves decentralization by evaluating the importance of nodes in a decentralized manner. This ensures the stability and security of the network, avoiding potential centralization risks.

Energy Efficiency: Compared with the Proof-of-Work (POW) algorithm, the POI algorithm does not require a large number of computing resources and energy consumption. This makes the NEM network more environmentally friendly and sustainable, lowering the barriers to participation.

On the NEM platform, the implementation process of the POI consensus mechanism is as follows:

Account importance calculation: The NEM system calculates the importance score of each account based on factors such as the account balance, transaction frequency and amount, number of transaction partners, etc.

Node selection: Based on the account’s importance score, the NEM system selects a subset of accounts with higher importance as the validating nodes, who are responsible for generating new blocks and validating transactions.

Block generation: Selected validating nodes compete to generate new blocks. In the NEM system, the process of generating blocks is called “harvesting.” Validating nodes are ranked based on their POI importance scores, where nodes with higher importance scores have a greater probability of being selected to generate new blocks.

Transaction verification: The validating nodes verify the transactions in the newly generated blocks. Validated transactions are recorded on the blockchain, while invalid transactions are rejected.

Reward distribution: The validating nodes that generate new blocks are rewarded with transaction fees and newly minted tokens. This incentivizes validating nodes to participate in network maintenance and transaction validation actively.

Through these steps, NEM’s POI consensus mechanism realizes transaction verification and block generation in the blockchain network. Compared with traditional POW and POS algorithms, the POI algorithm is more fair, decentralized, and environmentally friendly, contributing to the establishment of a secure, stable, and sustainable blockchain ecosystem.

In summary, NEM’s PoI consensus mechanism is an innovative algorithm that combines proof-of-stake (POS) and the evaluation of user activity, aiming to achieve a more fair, decentralized, and secure blockchain network. By incentivizing users to actively participate in transactions and interactions, the POI consensus mechanism helps to improve network activity and security while reducing energy consumption and barriers to entry.

The Future of NEM

As for the roadmap of NEM, there have been no updates about its development after the release of the Symbol blockchain in Q2 or Q3 2020 on its official website. Since 2022, NEM has made few updates about its project, and the several tweets released by its official Twitter account have nothing to do with the development of the project itself.

Source: https://nemproject.github.io/nem-docs/pages/History/Roadmap/default.en.html

The Symbol blockchain was officially launched on March 15, 2021. This date, known as the mainnet launch day for Symbol blockchain, marked the official release and deployment of the NEM team’s years of research and development efforts.

Symbol is a new blockchain project initiated by NEM, aiming to create an enterprise-grade blockchain platform. Built upon the NEM blockchain technology, Symbol significantly improves performance, security, scalability, and functionality. The goal of Symbol is to provide enterprises and developers with a more efficient, powerful, and flexible blockchain solution.

Symbol enjoys the following features and innovations:

High performance and scalability: Symbol adopts a highly optimized consensus algorithm and network architecture to improve the throughput and processing capabilities of the network. This enables Symbol to support large-scale enterprise-grade applications and handle high transaction loads.

Enhanced security: Symbol has been optimized in many aspects to ensure security, including the adoption of multi-layer multi-signature technology, the node reputation system, and an improved consensus mechanism. These improvements help safeguard assets and data while protecting against potential cyberattacks and malicious behaviors.

Cross-chain functionality: Symbol supports native cross-chain transactions and asset transfers, enabling different blockchain networks to collaborate and share resources. This interoperability facilitates the development of complex decentralized applications (dApps) and enables value transfer between blockchains.

Highly customizable smart contracts: Symbol provides a programmable smart contract framework that allows developers to create and deploy sophisticated business logic and workflows as needed. Additionally, Symbol also supports a visual smart contract editor that eliminates the need for writing codes, which reduces the development difficulty and entry barriers.

Asset management and tokenization: Symbol provides a complete set of tools for asset management and token issuance, allowing users to create, issue, trade, and manage various types of digital assets. These features provide the infrastructure for developing various tokenomics and asset tokenization applications.

Pluggable modular architecture: Symbol adopts a modular design that supports third-party developers to create and deploy custom functional modules. This architecture facilitates continuous innovation and expansion while ensuring the stability and maintainability of the platform.

Conclusion

NEM’s innovative features, including the Smart Asset System, the combination of multi-signature contracts, the node reputation system and programmable smart contracts, and the introduction of the Proof of Importance (POI) consensus mechanism that combines POS and user trading activity, demonstrate that NEM is a blockchain with technological innovation and excellence.

However, the lack of updates on its roadmap in the past two years raises questions about whether the NEM team will continue to deliver high-quality development and innovation for NEM in the future. To restore market confidence in NEM’s growth potential, it would be beneficial for the project team to maintain frequent interactions with community members through social media, their official website, and community channels. Updating the roadmap for future project development as soon as possible would also contribute to rebuilding trust and demonstrating a clear vision for NEM’s future.