Introduction to NEM
- Nem was created by forking NXT and then being adopted by the non-profit team of the NEM foundation.
- NEM which stands for the New Economy Movement was launched in March 2015.
- It has been adopted by the Mijin commercial blockchain.
Proof of Importance
- NEM uses Proof-of-Importance as its consensus algorithm.
- Proof of work needs to use a large number of resources to get mine new blocks. Asics, which is used by companies, overpower the individual using CPUS. Therefore the rich get richer.
Proof of work do not need to use larger resources but larger staking and older stakes get preference in mining blocks. This also leads to the rich getting richer.
- NEM’s Proof of importance takes into account balance as well as transactions.
- How many transactions and to whom the transactions take place with. Each user has a trust score, the higher the score the more you will be rewarded.
- Vesting- You need 10000 XEM vested to start mining. 10% of your unvested balance becomes vested every 24 hours.
- Harvesting- There are two types of harvesting local and delegated harvesting.
- Local harvesting is easier but has disadvantages to delegated harvesting.
- NEM aims to make an advantage of different features to make a j=holistic blockchain notarization system called Apostille.
- These notarizations are not one-time notarizations, they are dynamic moving and changing which is constantly updated on the blockchain.
- The four main features to implement this system are Namespaces, Mosaics, Messages, and Multisig Contracts.
- Namespaces are analogous the domain names on the internet. Just like domains, they are unique but the “sub-domains” are not.
- For example, there is only one switchmycrypto.com but “blog.”switchmycrypto.com is not unique. The blog subdomains are used widely even if the root level domain is unique.
- Giving unique namespaces allow companies to build and maintain a reputation system. If we take the same example, you will be sending NEM digital features to switchmycrypto domain which would be registered by the company showing authority and legitimacy ensuring trust.
- This same feature can be used in the government when officials are required to approve any document. The namespace will act as a stamp of authority. It is an officially endorsed on the public blockchain.
- Mosaics are user created named assets on the blockchain.
- Mosaics have customizable names, descriptions, divisibility quantities as either fixed or mutable, and transferability restrictions if necessary, and can have levies applied to them. They can be also created to pay for levies on other mosaics.
- Private companies can use this to make shares in a company. Governments may use it to give any type of identity to the citizen or the citizenship itself.
- Messages in NEM can be Open, Encrypted and Hex.
- The max length of Messages are 320 characters, 272 if encrypted. If a longer message is needed they can be strung together.
- Messages are needed in the notarized system because after the notary is made there may be a need to make updates and changes. This change can be made to the file and the thing it represents.
- Messages can also be used as plain-text to add additional information, links, etc.
- Hex can be used to update the backend of any application.
- NEM is not like other multisig accounts. They are actually on-chain contracts.
- They are created by converting a normal pre-existing and funded address.
- There can be multisig accounts where there are m members and n members are needed to access the account. Here m and n can be 1-32.
- This allows a feature in Apostille. Let’s say all transactions sent to a multisig account need to be verified. This account is no longer a normal account. It is now a certification account call Apostille account.
- An individual wants to notarize/approve a file.
- The individual send s the file to a Apostille account.
- The apostille account is made by converting a funded account into a multisig account with a reputable domain.
- One or more of the authorized officials will notarize the file and send it out or may reject the request.