What is NEM?

NEM is a very established coin and a cryptocurrency built from the ground up and not simply a fork of another coin (copying the codebase and making some slight tweaks).

So what is it and how does it work? A lot of people have compared NEM to Ethereum as with both blockchains you can conduct ICO’s using their technologies. However, NEM is very different from Ethereum and has some key advantages as described below.

A brief history of NEM

NEM was launched on March 31, 2015. At first, it was meant to be a fork of another cryptocurrency called NXT until it was decided it would be best to build it from the ground up. It was initially written in Java and Javascript but has recently been rewritten in the C++.

NEM was purposely designed to be a community focused coin, upon launch it airdropped 75 per cent of XEM to ~3000 stakeholders who requested to be part of the airdrop. By having this fair distribution of XEM, it started off on the right foot and guaranteed that at least initially, no one has a huge advantage over the others since each person controlled 0.025% of the network.

Currently, XEM sits in the 21st position of CoinMarketCap and reached a high of ~17B market cap in early 2018.

How Does It Work?

NEM is a customizable blockchain. It utilizes what’s known as the Smart Asset System which can be integrated into other software applications using modern API interfaces. Due to the well-documented API, its development is easier for traditional software engineers making it attractive to businesses as it reduces the risks when building a new software application.

Another key difference between NEM cryptocurrency and most other coins is that NEM uses Proof of Importance (POI) rather than Proof of Work (POW) or Proof of Stake (POS).

Proof of Importance (PoI) is similar to PoW but improved in that it doesn’t just reward the largest stakeholders, it is an algorithmic score based on activity within the network. The two primary variables being the number of active transactions the stakeholder is making and the number of other active nodes that they are directly connected to.