The world has seen a major change in the finance and banking sectors since cryptocurrencies became more accessible to the public. With their revolutionary features that offer cost-effective, efficient and decentralized transactions, virtual currencies have come a long way and are now being used for day to day transactions.
However, despite these advancements, there are still unresolved issues in the blockchain sector; this includes a lack of consensus protocols. One of the emerging platforms in the crypto sphere that aims to solve this is the New Economy Movement or NEM.
What is NEM?
NEM is a peer-to-peer platform that runs on a multilayer blockchain technology, allowing a smooth exchange of digital assets in both private and public blockchains. Running within the NEM blockchain is its native currency XEM that is utilised as an incentive to nodes that maintain the function of the chain.
Everything you need to know about NEM’s background
NEM was released in 2015 as a fork of Nxt, another blockchain-based digital asset and payment platform. The initial phase of the coin was announced in 2014, however, the stable version came out in mid-2015.
The main governing body of the blockchain is the NEM.io Foundation, a Singapore-based NGO. After the NEM fork took place, the foundation further developed the blockchain algorithm to increase its scalability and speed.
Currently, NEM can process transactions in under a minute. Additionally, the blockchain is also capable of carrying out financial transactions, contracts, documents and other digitized holdings.
What makes NEM different from the rest?
What makes NEM stand out among other blockchain platforms is that it neither uses Proof of Stake (PoS) or Proof of Work (PoW) protocol. Instead, it utilises a consensus mechanism called Proof of Importance or PoI. The PoS and PoI consensus have similarities, although there are key differences that set their functions apart.
To become a validator in PoS, a person has to stake a certain amount of coins that will determine the likelihood of the validator to be chosen by the network.
On the other hand, the PoI protocol has to verify if a node is eligible to validate transactions through vesting, transaction partners and several transactions verified in the last 30 days.
Pillar functions of NEM
NEM’s pillar functions are Proof of Importance and harvesting. Through these concepts, the blockchain can execute faster transactions and live up to its vision of creating a ‘better’ ecosystem for its users.
Proof of Importance
Unlike other digital currencies that use PoW and PoS, NEM uses PoI to prevent the manipulation of tokens by miners who have more stakes than others.
To address this, NEM issues transactions through the PoI mechanism where the system prioritizes validators who have ‘invested’ in the blockchain. In the PoI consensus, validators need to have 10,000 XEM tokens ‘vested’ in the network to be able to verify new blocks of transactions.
Validators can increase their regular status in the chain by holding their tokens in NEM’s built-in wallet. Using the native wallet of the platform increases the vested rate by 10% every day.
Aside from the 10% increase, PoI also rewards users who make transactions with other networks. Doing this can increase a user’s points which elevates their status in the blockchain. When the accumulated points meet the requirements, a user can claim a reward.
Harvesting is another crucial concept in the NEM blockchain. This type of protocol links user accounts to supernodes in the network. Supernodes stand as the support of the NEM network, allowing users to use their PoI score, increase their chances of block generation and use as minimal computational energy as possible.
Accounts with 3,000,000 or more XEM tokens are the only ones allowed to utilise the supernode in the chain through a local or cloud-hosted server. A supernode runs 24 hours every day to verify transactions.
How to buy XEM
There’s no better time than now to invest in NEM. You can buy your XEM tokens on exchanges such as Binance, Coinbase and Kraken, but the easiest way to acquire your XEM tokens is to create a NEM wallet on the cryptocurrency’s site. Experience the efficiency of this blockchain network when you follow these easy steps:
- Download the NEM wallet app on your phone and read the terms and conditions. Once done, tick the box and tap OK to proceed to the next step.
- After agreeing to the terms and conditions, create a strong password.
- Once you’re done, tap ‘Add account’ and then the ‘Create new wallet’ button. Give your wallet a name so you can easily browse through your funds.
- If you’re not sure where to store your private keys, you have the option to back up your keys in the wallet itself.
How to export your NEM wallet from your phone to your desktop
If you want to access your NEM wallet on your desktop, here are a few easy steps you can take to transfer it from your mobile:
- Open the NEM web application and click ‘Sign up’ located at the upper right corner of the page. Once the page loads, choose the ‘Private key wallet’ and then click the ‘Ready’ button to proceed with the transfer.
- After you’re done, select the ‘Mainnet’ located on the dropdown menu. Click the ‘Next’ button to proceed.
- Once you’re done, repeat the ‘Create’ wallet step and then label it. Log the private key you backed up from your mobile wallet, tap the QR icon on the mobile app and click the ‘Next’ button to proceed.
- Click the downloaded wallet after you’ve read the agreement. Once you have finalized backing up your wallet, click the ‘I have my wallet file’ then click ‘Agree’. You can now access your wallet from your desktop!