New Economy Movement (NEM): What It Is And How Does It Work?
New Economy Movement or simply NEM, is an enterprise-grade solution that powers the growing blockchain technology. At first, it was intended to be a fork of NXT and then the company decided to go with a completely new codebase with the alpha version being released on June 25 in 2014.
The platform was also rewritten in C++ and it was released as the ‘’Catapult’’ update in early 2018. Let’s find out more about this amazing project.
Smart Assets System
The NEM blockchain powers up the Smart Asset System. This system is intended to work as an open, customizable blockchain solution for a huge variety of use cases that are built on top of a simple but powerful API calls. The blockchain is secured and transactions are processed by the global network of nodes that run the NEM core software and the network is used as the API gateway server. This means that the developers are looking to build the blockchain-powered apps which don’t need to run any special software because all of the NEM functionality is available by accessing API calls.
This allows for bigger flexibility when it comes to the design of the system and how the various apps are making the use of the NEM network. The apps can access the NEM API instantly and directly by accessing a separate server in addition to making NEM requests or existing servers that can be adapted to make the use of the altcoin in the background. The developers defined NEM addresses as containers for assets that can be updated and changed over time. A single address could represent the wallet that is holding the coins or something even more complicated such as documents that require signatures or elections that is collecting and counting votes.
The developer will then create the Mosaics which are identical and transferable assets that represent the previously mentioned votes or coins that stay in the Addresses. This system of flexible addresses and configurable mosaics can be used in multiple cases and since all of the NEM functionality is accessed through the NEM API, anyone can build any sort of system that they dream up and hook it into the NEM blockchain relatively easy.
Harvesting And Proof-of-Importance
The New Economy Movement blockchain employs a Proof-of-Importance algorithm which makes it easy to achieve consensus through a process that can incentivize active participation in the network and this makes up the decentralization of the network and for some well-behaved nodes. Each node has an importance score that determines how often it can harvest the XEM, NEM’s native tokens. A part of the system works by vesting coins so this means that once you put your coins in the wallet, they start as unvested coins. Over time, the coins will begin to vest towards the importance of the account and to be eligible for an importance score, the account has to have at least 10000 vested XEM.
This part of the system operates just like staking coins in the PoS setups but it is only one part of the calculating the importance. In addition to the tracking vesting, the transactions graph of the NEM network is constantly analyzed to give you the information on which nodes are contributing and which are not. This means that more transactions that get sent to other users, the more use of the network increases your chances of being important. The vesting process and transaction metrics result in an importance score for every node and the scores are used to scale the ability of the node that can harvest the XEM tokens.
Since the system is not hardware intensive, it allows for the nodes to be run on any machine no matter the power thus preventing the centralization of harvesting for those who have big machines. Since it requires some time, the vesting process prevents the ‘’rich get richer’’ effect that many of the staking systems have. In some of the systems like Bitcoin, the mining blocks are the nodes the run the network are separate. In the New economy movement (NEM) system, a running node that secures the network and a harvesting coin are done by the same software which incentivizes the running full node and leading to a bigger degree of decentralization over time as the harvesting becomes more profitable. Overall, the PoI system is very unique and it seems promising since it is an excellent alternative to traditional consensus methods that could also be a weakness and strength.
New Economy Movement uses a custom version of the Eigentrust ++ algorithm that can implement a reputation system for the nods on the network. Each node can keep the track of the information that it receives from other nodes and then verify this information. If the information turns out to be valid, the reputation of the providing node will increase and if it is bad information the reputation will decrease. The reputations of all of the nodes are then passed around the network and updated within each node. This can simplify the load balancing and removing bad nodes from the network by simply keeping the network running as fast as possible.
Private VS. Public
Anyone that can use the public New Economy Movement blockchain can do so by using the API calls as described above but for the applications that require more privacy, there is a private version of the NEM blockchain that can be provisioned to run on internal servers and only make some use of the predefined nodes of the users’ choosing. On the private node networks, some of the features of the public network that are in place to protect from bad nodes, also allow for faster transactions in a closed box setup. These private blockchain developments can be used to power anything from the loyalty points programs to logistics and much more without ever exposing the transaction data and providing speed and security. This also makes a lot of sense for companies that are willing to use the blockchain to power up their internal tools without the added functionality of the public chain.
NEM offers a very impressive system and promises to become a major player in the blockchain industry and crypto economy. The ease of development, unique POI systems and flexibility make NEM a very attractive platform for any developer or company that is looking to build out a blockchain solution.
New Economy Movement
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