Every cryptonian in existence and their dog has heard of the dApp leader, Ethereum, right? Well, what about NEM? Many of you will, no doubt, have noticed that, in this recent sea of red which is engulfing the cryptocurrency market for its annual ritualistic bath in claret, there is one of few cryptocurrencies which is consistently doing all it can to stay in the green, NEM.
For many of the newer investors of cryptocurrencies NEM will just be a few letters that could be in representation of a famous blue and yellow fish who has had a couple Pixar films made about him, for which they’d be forgiven, however they’d do well to learn what NEM actually is and why it has been making such impressive gains while the rest of the industry is tanking it in the red.
So, what is NEM?
To put it simply NEM is a uniquely coded distributed ledger, that means blockchain to you or I, which is the first of its kind to use Smart Assets. As many of today’s current blockchains are actually forks of already existing blockchain solutions, such as Ethereum or Bitcoin, they fail to possess any unique features which are not accessible on other chains. With NEM, however, the blockchain was coded from the ground up by a team of highly skilled individuals with a great deal of experience in distributed ledger technology.
As a result of the unique coding from the NEM team of developers they have managed to bring a product to market which allows developers greater freedoms when deciding which asset of theirs they wish to manage via the NEM blockchain, and allows developers to get their own product to market at record speeds.
Did you say speed?
Due to the way in which the NEM platform is configured, the developer interface which is implemented allows for developers to quickly utilise the tools available to them on the NEM blockchain so that they can work on getting their project to market as soon as possible.
This achievement is made possible by the utilisation of the NEM Smart Asset System which allows developers to simply use the NEM public API, which allows users to select from a list of tested features which are available on the NEM blockchain.
By allowing developers to simply select which features of the NEM chain they wish to use they are essentially allowing developers to create tailor made blockchains which are perfect for their project.
What about scalability?
One of the biggest issues which is currently facing the blockchain industry is scalability. The current infrastructure in place for the majority of the major blockchains does not provide the grounds for mass adoption. Take a look at the Crypto Pets game which all but temporarily killed the Ethereum network back in December 2017. Due to a sudden influx of new users the network became extremely congested and gas prices became astronomical.
As a means of combatting the scalability issues which face other blockchains the NEM blockchain utilises its innovating PoI or Proof of Importance algorithm. Blockchains traditionally use PoW (Proof of Work) or PoS (Proof of Stake) to verify transactions which are made on the blockchain but these two methods are both becoming increasingly unsustainable.
The PoW algorithm excessive amounts of energy are required to work through the distributed ledger and verify the transactions, and rewards are limited to those who can afford to buy expensive mining rigs. PoS, on the other hand, reward’s users for hoarding a large stack of coins and incentivises people to not spend them, producing a situation in which those who can afford to buy a large percentage of coins will get richer while those who cannot afford to buy a huge number of coins get nothing.
Due to the nature of the two algorithms above the performance of blockchains become highly dependent on those who can afford to buy their way into becoming nodes and they, in turn, gain a significant percentage of the network’s power.
The Proof of Importance algorithm by NEM uses a variety of variables to determine how important a node is to the entire NEM network. The way in which is decides the importance of a node is by assessing the account’s interactions with the blockchain over the past 30 days.
When assessing an account’s interactions with the NEM blockchain the PoI algorithm takes into consideration three factors: vested coins, transaction partners and transactions in the last 30 days. Click here to read more about the PoI algorithm in the NEM whitepaper
As a means of mining coins and processing the NEM blockchain, any user who holds more than 10,000 XEM tokens will be able to harvest further tokens (similarly to staking) by pooling together with an existing supernode and using their computing power to complete blocks on your behalf. The harvesting function is determined by a user’s PoI score and is coded in a way which prevents a wallet’s private key from ever being shared with anyone.
Due to the implication of the PoI algorithm it is not possible for one sole entity to acquire enough XEM to essentially mine all available coins as a result of their wealth. As the harvesting module works by allowing users to lend their importance to a supernode it is not possible for one supernode to become the sole possessor of completed blocks.
The disruption of Ethereum
After reading all of the above you are probably starting to feel like NEM is credible project but do you believe that it has the possibility to disrupt Ethereum? I do, and here is why: Ethereum’s dominance in the dApp market is largely down to the lack of any real world competition. Yes, there are other platforms which utilise dApps and, yes, there are other platforms which claim to provide the means of handling scalability issues but they are either struggling to actually attract developers to their platform, cannot deliver on their promises just yet, or are simply a clone of Ethereum.
The NEM blockchain is currently going through an important period in its overall story and, personally, I think it is handling this period well. If you take a look at the current projects which the NEM dev team are working on you can see they are planning on creating an entire ecosystem which will be to the benefit of the blockchain. Projects such as the NEMp3, which will assist with mass adoption, and the NEM Woo Commerce integration show that the team are forward thinking. Click here to see what project NEM are currently working on
To add to the projects which are currently being developed by the NEM development team there are currently a number of dApps which were hosted on the Ethereum blockchain which are migrating to the NEM blockchain, the most recent being Solution Token, citing the “security and scalability” of the NEM project as their main reasons.
As a final note, and reason to believe in the NEM project, I feel that it should be noted that the NEM project is a non profit one. The NEM Foundation is the company which develops the NEM blockchain and, as mentioned, they are a non profit organisation whom intend to provide a facility for all to utilise the technology of the future.
Click here to visit the NEM website
Click here to buy NEM for Eth on HitBTC
Please remember that this article is not to be taken as any form of investment advice and that you should do your own research before investing your hard earned cash into anything. We would also like to remind you that Something Decent is not in anyway responsible for the distribution of airdrops, bounties or giveaways unless it is stated that we are personally conducting them