NEM - New Economy Movement

NEM: The Smart Asset Blockchain 

NEM was launched in March 2015, from a desire to create a vibrant peer to peer (p2p) cryptocurrency ecosystem which improved on existing blockchains, whilst also integrating academic research on network theory. The latest whitepaper from NEM, dated February 2018, sets out their most promising contribution to the cryptocurrency space, a newly designed consensus mechanism known as ‘Proof of Importance’ (PoI). NEM boasts a strong team, of well established board members, transparently available via their website and LinkedIn.

Like many blockchain projects, NEM offers not solely a cryptocurrency, but rather a large range of enterprise use-cases which they claim their blockchain platform can fulfil with ease. With an emphasis on security and trustless computing, NEM will allow customers to realise these use-cases through implementation of “smart assets”, which they refer to as ‘Mosaics’; decentralised applications launched on a ‘built-from scratch’, scalable and secure platform.

Investors looking to purchase NEM should note that their native currency is in fact the ‘XEM’ token, used as a form of gas in transactions incurred during the use of Mosaics built on the NEM platform, and spent as a fee.

What are the use-cases of NEM? 

The NEM team predict a wide range of uses for their platform, including use by decentralised organisations, financial contracts, secure record keeping, and business management. Within these areas are a whole host of other services NEM can provide, such as secure crowdfunding, voting, encrypted messaging, multi-signature access control, KYC & AML, escrow services, and the ability to create your own cryptocurrency native to the NEM platform.

NEM claim that their implementation of blockchain technology is completely unique and ‘production ready’ – this gives a clear advantage over projects which are still developing the core infrastructure of their technology.

To prove their readiness, NEM have already showcased a successful use of their technology stack; the private blockchain project Mijin, built on the NEM platform. Mijin offers a secure and scalable solution to online banking, which they claim could reduce institutional costs by up to 90% compared to that of legacy banking systems. A serious claim which has already been taken up and tested in 2015 by SBI Sumishin Net Bank, the largest private trust bank in Japan, to facilitate the growth of their online banking repertoire. Likewise, Sakura Internet have offered their customers a 6 month free trial of the Mijin blockchain technology; a stride forward for the adoption of the NEM platform.

The NEM Nanowallet 

The native wallet for the storage of the XEM token, the Nanowallet is more than just a crypto-wallet. Nanowallet allows users to create their own ‘Namespace’, a feature which eliminates long addresses when sending and receiving NEM, currently an obstacle to wide user adoption.  Furthermore, the Nanowallet is the interface for developers looking to create their own Mosaic-based cryptocurrency and begin developing smart-assets on the NEM blockchain. Users of Nanowallet can also vote in open source projects and matters of corporate governance.

Proof of Importance (PoI)

The most interesting aspect of the NEM platform, PoI is a consensus mechanism designed solely for NEM, which uses a technique similar to Google’s PageRank technology, preventing attacks on NEM blockchain transactions, whilst facilitating limitless scalability. The PoI consensus mechanism uses the Eigentrust ++ algorithm, which lets nodes judge the trustworthiness of other nodes on the blockchain and reject ‘bad actors’ from taking part in transactions, and balance network loads.

Effectively, a users ‘importance’ on the NEM network is based on their past transaction frequency and history. Users who make frequent transactions on the network shall increase their trust, and likewise increase their ‘importance’, thus allowing users with the highest importance to ‘harvest’ new blocks – and subsequently collect network fees as their block reward; the amount of which corresponds to their importance.

NEM claim that their PoI consensus algorithm improves both on the traditional proof of work (PoW) algorithm employed in cryptocurrencies like Bitcoin, through reduced energy demands; and also improves on proof of stake (PoS) systems because rather than simply reward users who hold the highest amount of coins/tokens, they reward the users who transact the most often and most honestly – therefore creating a more equitable network and reward system.

Partnerships and Exchanges 

In addition to the Japanese banking partners using the Mijin blockchain outlined above, NEM also have a number of partnerships with development companies such as Tech Bureau Corp., Dragonfly Fintech, and Atraura Blockchain, showing their commitment to continuous development.

NEM (XEM) is trading on a large number of exchanges, including popular high volume exchanges such as Binance, Bittrex, OKEx, Poloniex and HitBTC, but also a large volume of NEM is traded on the Japanese exchange, Zaif, which indicates its strong popularity amongst Asian investors and particularly the Japanese market.


For those investors looking for a long position in NEM, it should be noted that the implementation of their PoI ‘scores’ users not solely on the amount of XEM they hold, but likewise on the number and quality of transactions they have carried out. This encourages users to actively carry out transactions rather than simply hold XEM off-line.

NEM is clearly a growing, functional and interesting project. It has strong links in Asian and particularly Japanese markets, and a track record of success in these locations.  However, it will remain to be seen if NEM can compete effectively with third generation smart contract platforms which are currently emerging such as Cardano, and already well established smart contract platforms such as Ethereum.

For now, NEM is definitely one of the most interesting projects in the blockchain smart contract niche and is worth following closely.

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