Published on Feb 21, 2020
NEM is a peer-to-peer cryptocurrency and blockchain platform launched on March 31, 2015. Written in Java, with a C++ version in the works,[3] NEM has a stated goal of a wide distribution model and has introduced new features to blockchain technology such as its proof-of-importance (POI) algorithm, multisignature accounts, encrypted messaging, and an Eigentrust++ reputation system. The NEM blockchain software is used in a commercial blockchain called Mijin, which is being tested by financial institutions and private companies in Japan and internationally
The NEM developers are pseudonymous.[6] NEM was started by a Bitcoin Talk forum user called UtopianFuture who was inspired by Nxt. The initial plan for NEM was to create a fork of NXT, but this was eventually dismissed in favor of a completely new codebase.[8] Starting on January 19, 2014, an open call for participation began on the Bitcointalk forum. The goal of the call was to create a community-oriented cryptocurrency from the ground up.
In April 2016, Tech Bureau, the operator one of Japan’s largest cryptocurrency exchanges, Zaif, formed a partnership with NEM for a new blockchain engine.
On 26 January 2018, Japanese cryptocurrency exchange Coincheck, was the victim of a massive hack resulting in a loss of 523 mln NEM coins, worth approximately $534 mln. The hack only involved NEM. Because the security breach was caused by the lack of strong security measures of Coincheck, the NEM development team refused to conduct a hard fork. Instead NEM is creating an automated tagging system. This automated system will follow the money and tag any account that receives tainted money
POI is the algorithm used in NEM to time stamp transactions. A NEM user's importance is determined by how many coins they have and the number of transactions made to and from their wallet. POI uses the NCDawareRank network centrality measure, the topology of the transaction graph, as well as a number of other relevant signals to achieve consensus. POI is different from other initiatives which use a fee-sharing model that does not take into consideration one's overall support of the network. In proof-of-stake systems a person needs to have large numbers of coins to form a block, but in NEM transactions volume and trust become factors. This was designed to encourage users of NEM to not simply hold XEM but instead actively carry out transactions.
To be eligible for entering the importance calculation, an account must have at least 10,000 vested XEM. All accounts owning more than 10,000 vested XEM have a non-zero importance score. With a supply of 8,999,999,999 XEM, the theoretical maximum number of accounts with non-zero importance is 899,999. In practice, the number of actual accounts with non-zero importance is not expected to approach the theoretical max due to inequalities in held XEM and also the temporal costs associated with vesting. If NEM becomes very popular, a threshold of 10,000 vested XEM could be undesirable. If necessary, this number could be updated in the future via a hard fork, which is the same procedure for adjusting transaction fees and other parameters related to harvesting
NEM implements multisig (short for multi-signature) technology on its platform. Specifically, NEM implements m of n multisignature, where m ≤ n. This means that m out of a total of n signatories must sign a transaction before it can be broadcast onto the blockchain. NEM's multisignature works by making a contract on chain so that the "m" accounts have full transaction privileges over the account that has been turned into a multisig account. Since the contract metadata is on chain, it can easily be updated by adding or subtracting additional signers given that the required number of parties agree on it.
Multisignature accounts require that another user or users sign a transaction before it can be broadcast onto the blockchain. This means that if one person loses their wallet through a hack, no money can be spent unless another wallet (or wallets if m is more than 2) signs it. Multisignature accounts also help protect community-held funds, in that a majority of designated users must agree before a transaction can be spent from a community-held wallet. This is especially important considering over a third of all XEM in circulation is held in these community wallets
