NEM: features, advantages, vulnerabilities

Today we are giving a short overview of the NEM cryptocurrency, including the history of its creation, software features, undoubted advantages and significant vulnerabilities.

Brief technical characteristics.

NEM is a peer-to-peer cryptocurrency platform. It is written in Java and JavaScript and uses 100% original code. NEM is referred to as XEM. A C++ update was recently released.

The private blockchain of this digital currency is called Mijin. It is created using platform software. All features available with the platform are also available in Mijin. However, Mijin has the added benefit of supporting smart contracts.

NEM  adds new functionality to blockchain technology using a Proof-of-Importance algorithm. NEM also offers an integrated peer-to-peer encrypted messaging system, multi-signature accounts and the Eigentrust++ reputation system, which is responsible for checking the reputation of nodes, routing transactions through high-reputation nodes, avoiding nodes with a low degree of reputation, which is directly dependent on the number of successful transactions.

The Proof-of-Importance algorithm implies that those nodes that have the most tokens in the first place, and, secondly, they confirm transactions faster and better than others. That is, the reputation of a node directly depends on its activity. To run a node, the user needs to have 10,000 NEM coins in their wallet. In this case, he receives the right to confirm transactions on the network and receive his commissions from the transaction amount. If a user has 3,000,000 NEM coins on his balance, then he receives the status of a supernode and the right to vote in decisions on the further development of the project. The algorithm also takes into account how actively the user conducts transactions with other users.

The developers claim that one of the goals of creating NEM is to solve the problem of wealth inequality that all participants in classical cryptocurrency blockchains face. 

NEM was previously deciphered as the New Economy Movement - a new economic movement, but now the cryptocurrency is simply called NEM.

Creation history.

The open alpha test of NEM began on June 25, 2014, it was replaced by a long beta test on October 20, 2014, and the final version of NEM was released on May 31 2015.

In total there are 9 billion NEM coins.. They were all issued in the first block and further emission is not provided for by the protocol. That is, it is impossible to mine NEM in principle.

What can be considered mining is called harvest in the NEM network, and all miners are called harvesters. Since all coins were mined at the time the cryptocurrency was released to the masses, harvesting is the process of recording all transactions in the blockchain. And harvesters receive tokens not for the found block, but as payment for assistance in the functioning of the network.

The NEM development team has six permanent, full-time coders and several dozen programmers who participate in development on a volunteer basis.

In 2016, NEM made a breakthrough in exchange rate and took tenth place among the largest cryptocurrencies by market capitalization. At the time of writing, the NEM rate is $0.425, the market capitalization is $3,891,868,918, the daily trading turnover is approximately $17 million

Today, NEM is traded on all major cryptocurrency exchanges.  The headquarters is located in Singapore. The main developers and investors are citizens of the EEC. It is mainly promoted on crypto platforms in Japan, where it is the second most popular digital currency after Bitcoin.

Advantages of NEM

1. Very fast transaction confirmation (on average 20 seconds). While Bitcoin is trying to solve the scaling problem, several Japanese banks have already entered into an agreement with NEM to build a payment infrastructure on Mijin.

2. Very low commission, which ranges from 0.001% of the amount of transferred funds (that is, for a transfer of the equivalent of $1000, the commission will be only 10 cents)

3. NEM technology, tested by independent experts, supports about three thousand transactions per second (for comparison, Bitcoin supports about 3 transactions per second, Ethereum - 14, and the global payment operator Visa can conduct about 4,000 transactions per second)

4. Government regulators are neutral towards NEM, since transactions on this network are de-anonymized and transparent. 

5. “Communication” with the NEM blockchain occurs via IP, so it is independent of programming languages, unlike NEO or Ethereum. Integration with any program or project becomes accessible and uncomplicated.

NEM Disadvantages

1..Judging by the fact that NEM is developing blockchain-based payment systems for banks, the New Economy Movement implies a symbiosis of the old financial system and cryptocurrencies. Against the backdrop of the hysteria of global financial regulators, this looks like a concession or an attempt to play “at funerals and weddings” at the same time.

2. NEM is not as widely available as other cryptocurrencies, and it can be stored either on exchanges (which is unsafe) or in the only available NEW Nano wallet. The risks of such storage were clearly demonstrated by hack of the Japanese exchange Coincheck, when NEM in the equivalent of $523 million leaked from user accounts.