New Economy Movement or NEM is a smart contract and decentralized app (dApp) platform that is intended to challenge the likes of Ethereum and other popular blockchain 2.0 ecosystems.
NEM is targeting the same market and use cases. The difference is that NEM was written in the common programming language Java. The NEM core team believes that blockchain can still be effective with Java.
This article will give an introduction to the NEM project. Let’s begin!
The History of NEM Coin
NEM was started by a Bitcointalk user who called himself UtopianFuture. NXT was the inspiration at the time, but then the plan to fork NXT was abandoned. Later, he decided to launch the NEM coin from scratch. In 2014, UtopianFuture and his partners decided to start a project called the New Economy Movement (NEM).
XEM was distributed to the original contributors. This includes people on BitcoinTalk who gave BTC and people who contributed NXT via the NXT Asset Exchange. People who contributed with lines of code, marketing, and graphics also received a portion of the original distribution. The rest was sent to the Sustainability Fund.
The NEM mainnet was eventually launched on March 31, 2015. The NEM foundation itself was finally created a year later (2016).
At the peak of the crypto bull market in 2017, XEM became one of the most sought after altcoins. Fast forward to today, it’s currently ranked outside the top 20 coins by market cap.
NEM Selling Points – Proof of Importance and Java
While NEM is just another dApp platform like EOS, NEO, or ETH, there are several unique technological features that help NEM stand out from its competitors.
One of the main selling points of NEM is its consensus algorithm “Proof of Importance” or POI. The cryptocurrency world typically knows three different consensus algorithms:
- Proof-of-Work where miners secure the network
- Proof-of-Stake where staked tokens verify the transactions on the blockchain.
- Delegated Proof-of-Stake. where token holders “put” their trust in representatives. These representatives verify transactions on the network.
The idea of POI is to encourage actual network use, not just hodling XEM.
The likelihood of you “harvesting” a block on the NEM blockchain depends on your Importance Score. The amount of coins you have staked and the amount of transactions associated with your address are factors for your score. The higher your score, the more blocks you harvest. Thus, harvesters are incentivized via rewards to maintain a high level of Importance.
Besides POI, NEM also has another selling point which is its programming language. Many blockchain 2.0 platforms use their own programming languages, and that makes the barrier to entry high for non-blockchain enthusiasts. NEM uses the commonly used language known as Java. With Java, the hope is to cater to as many developers as possible, so they don’t have to learn a new programming language just to develop a dApp (decentralized application).
Challenges of NEM
Unfortunately, NEM is not a project without controversy. In early 2018, the Japanese cryptocurrency exchange CoinCheck was hacked and the criminals were able to steal $400 million worth of XEM.
Since the hacking event, NEM has lost some of its popularity in the eyes of big traders. Once part of the top 10 altcoins, NEM is now struggling to keep its relevance on the crypto rankings ladder (at the time this post was written, NEM was ranked 27th).
NEM is also having a tough time convincing developers to create a dApp on top of NEM blockchain.
Ethereum, Tron, EOS, NEO, and several others have surpassed NEM’s popularity and it might take a bit of marketing and branding efforts before dApp developers start to see NEM as a viable solution. Whether the NEM team and community can pull it off, only time will tell.
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