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
Unlike many other blockchain 2.0 platforms, NEM did not come from ICO or initial coin offering.
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).
NEM did not receive any public funding from the crypto community. The NEM mainnet was eventually launched on March 31, 2015. Three-quarters of the NEM coin supply were given evenly to the early believers.
NEM foundation itself was finally created a year later (2016). At the peak of the crypto bull market in 2017, NEM coin became one of the most sought after altcoins. Fast forward to today, NEM fell on the crypto rankings ladder. 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.
The biggest selling point 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 token 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.
With Proof of Importance (POI), to calculate the level of importance, you need to stake more coins, but at the same time, you need to create more transactions. The more important you are in the POI ecosystem, the more ‘blocks’ you can mine. And of course, that also means you will be rewarded more.
The idea of having Proof of Importance was introduced due to the crypto community mindset of not wanting to spend what they have in their crypto wallets. Usually, the crypto community buy their favorite cryptocurrencies and just HODL it forever in their own wallet. But with Proof of Importance, it encourages NEM enthusiasts to do transactions to fulfill the original crypto mission as an alternative to fiat.
Not only about POI, but NEM also has another selling point which is its programming language called Java. Many top blockchain 2.0 platforms use their own programming languages, and that makes the barrier entry high for non-blockchain enthusiasts. With Java, the hope is to cater as many developers as possible, so they don’t have to keep learning new programming language just to develop a dApp (decentralized application).
Challenges of NEM
Unfortunately, NEM is not a project without controversy. In early 2018, a Japanese cryptocurrency exchange CoinCheck was hacked and the criminals were able to steal $400 million worth of NEM coins. Since the hacking event, NEM slowly but surely lost its popularity in the eyes of big traders. Once part of the top 10 altcoins, now NEM is struggling to keep its relevance in the crypto rankings ladder (at the time this post was written, NEM was ranked 27th).
Not only due to the unfortunate hacking incident, but NEM is also having a tough time to convince 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 lot of marketing and branding efforts before the dApp developers start to see NEM as a viable solution. Whether NEM team and community can pull it off or not, only time will tell.
Switchain is an instant non custodial cryptocurrency exchange. Our user user-friendly platform makes trading crypto easy and fast. We work with different cryptocurrency trading partners to guarantee the best cryptocurrency rates to our clients.