What is NEM?
NEM (New Economy Movement) is a blockchain-based virtual machine that's similar to Ethereum, only it's more customizable and easier to program. The network's token is called Xem. Xem can be used to purchase namespaces and mosaics, which have a wide variety of potential use cases.
How does NEM work?
Proof of Importance
One of the most unique things about NEM has to do with the way that it processes transactions. The algorithm that it uses-- called PoI (Proof-of-Importance)-- is fairer compared to Bitcoin's PoW (Proof-of-Work) and Dash's PoS (Proof-of-Stake). In PoW-based cryptocurrencies, people who can afford to pay for massive computers claim most of the mining rewards. PoS-based cryptocurrencies favor those who can afford to stockpile large amounts of funds. But with PoI, priority is given to nodes that use the network the most. This profit distribution system
Namespaces and mosaics
The way that the NEM network is organized makes it easy to use. Most cryptocurrency addresses consist of long meaningless strings that are impossible to memorize. But when you create an NEM address, you also create a unique namespace that identifies it. Namespaces contain mosaics, which are similar to files. You can enter all kinds of information into a mosaic, ranging from land titles to music licensing rights, contracts and anything else you can sell or trade. Because NEM has built-in notarization and escrow features, you don't have to use a middleman or escrow company to oversee the transaction.
Benefits of NEM
- Encrypted messaging. NEM debuted with built-in support for encrypted messages.
- Flexibility. Mosaics can be configured in a wide variety of ways. Mutable/unmutable, capped/non-capped, divisible/non-divisible are just a few of the attributes that you can set when you create a mosaic.
- Multi-signature transactions. You can quickly and easily set up a multi-signature wallet for use with NEM. Multi-sig wallets are useful for business applications in which multiple people need access to one account. The multi-sig feature prevents anyone from withdrawing funds unless all the parties involved agree.
- Low barrier of entry for transaction processors. NEM's innovative PoI algorithm makes it possible for newcomers to compete for transaction processing rewards.
NEM's promise lies in its ease of use and the innovative algorithm that it uses to process transactions. If blockchain developers explore the possibilities offered by NEM's mosaic feature, it could have great potential.
Related: Understanding the NEM blockchain