NEM (cryptocurrency)

NEM
Denominations
Subunit
 0.000001 µXEM (microXEM) - smallest unit
 0.001 mXEM (milliXEM) - thousandth unit
Plural XEM
Symbol XEM
Demographics
Date of introduction 31 March 2015
User(s) Global
Issuance
Issuer Fixed Decentralized
peer-to-peer consensus
 Website NEM
Valuation
Genesis Block Production Fixed 8,999,999,999 XEM total
Block time                     1 minute
Technology                  Blockchain

NEM is a peer-to-peer cryptocurrency and blockchain platform launched on March 31, 2015.[1] Written in Java,[2] with a C++ version in the works, NEM has a stated goal of a wide distribution model and has introduced new features to blockchain technology such as its proof-of-importance (POI) algorithm, multisignature accounts, encrypted messaging, and an Eigentrust++ reputation system. The NEM blockchain software is used in a commercial blockchain called Mijin,[3] which is being tested by financial institutions and private companies in Japan and internationally.[4]

NEM technology allows multiple ledgers to coexist on one blockchain. NEM Smart Assets[5] allows users to create mosaics which can represent any asset (e.g. currency). All transactions in NEM have transaction fee associated with them and denomination used to pay for transactions is mosaic named XEM.

In 2017 the NEM Foundation opened a center in Kuala Lumpur, Malaysia, to serve as an incubator, accelerator, and co-working space.[6]

History

NEM was started by a Bitcoin Talk forum user called UtopianFuture who was inspired by Nxt.[7] The initial plan for NEM was to create a fork of NXT, but this was eventually dismissed in favor of a completely new codebase.[8] Starting on January 19, 2014, an open call for participation began on the Bitcointalk forum. The goal of the call was to create a community-oriented cryptocurrency from the ground up.[9]

In April 2016, Tech Bureau, the operator one of Japan’s largest cryptocurrency exchanges, Zaif, formed a partnership with NEM for a new blockchain engine.[10]

On 26 January 2018, Japanese cryptocurrency exchange Coincheck was the victim of a massive hack resulting in a loss of 523 million XEM coins, the native token of NEM, worth approximately $400 million.[11] The hack only involved NEM, because the security breach was caused by the lack of strong security measures of Coincheck with regards to their implementation of NEM, lacking the use of multisignature support or a cold wallet. The NEM development team refused to conduct a hard fork. Instead NEM created an automated tagging system. This automated system followed the money and tagged any account that received tainted money.[12] The result of these actions was that NEM stopped tracking the stolen coins approximately mid-March 2018, after concluding that enough data was provided to the law enforcement authorities.

Architecture

Overview of the NEM Architecture

NEM's design architecture consists of two components. One is the node or NEM Infrastructure Server (NIS). The second is the client used for interacting with the nodes.[13] Its cryptocurrency wallet is the NanoWallet built with HTML and Javascript.[14]

Another client was the NEM Community Client (NCC). The NIS is connected to the P2P network and acts as a gateway for the NCC. The NCC is client software that includes a wallet. The NCC has since been deprecated in favor of the NanoWallet. Both NCC and the NanoWallet can be run isolated from the internet, providing security through an airgap.[15]

Features

Namespaces

Namespaces on the NEM system are a domain naming system similar to the internet's centralized ICANN domain name system. Within namespaces, there are higher level domains and subdomains. This allows one person with one domain to create many different subdomains for their different projects or outside business accounts. It also helps to build and maintain a reputation system for Mosaics.[16]

Reputation and harvesting

NEM uses a system called "Apostille" to notarize documents and make timestamps; Apostille creates a key based on the data in the transaction.[17]

NEM employs an Eigentrust++ as a reputation system. NEM ensures the health of the blockchain by monitoring past behavior of nodes within the network. In proof-of-work, the amount of work a node does is used as a measure for its ability to protect the network. But, with Eigentrust++, it is the quality of work that is important. This adds to the NEM network's ability to be run and maintained efficiently.[18]

NEM uses a "proof of importance" (POI) to score how people can harvest XEM; a person has to have 10,000 XEM in their balance to be scored, and the number of transactions they have with others. to time stamp transactions.This was designed to encourage users of NEM to not simply hold XEM but instead actively carry out transactions.[19][20]

Multisignature transactions

NEM implements multisig (short for multi-signature) technology on its platform. Specifically, NEM implements m of n multisignature, where m ≤ n. This means that m out of a total of n signatories must sign a transaction before it can be broadcast onto the blockchain. NEM's multisignature works by making a contract on chain so that the "m" accounts have full transaction privileges over the account that has been turned into a multisig account. Since the contract metadata is on chain, it can easily be updated by adding or subtracting additional signers given that the required number of parties agree on it.[21]

Mijin

Mijin is a private blockchain that uses the NEM software, launched by Tech Bureau. The developers claim that it will reduce banking institutional costs by 90% while making banking more secure.[22] Sakura Internet is partnered with Tech Bureau to offer 6 month free trials of Mijin for people to try.[23] It was tested in December 2015 by Japan's largest trust bank, SBI Sumishin Net Bank, owned by Sumitomo Mitsui Trust Holdings, to add to their online banking services.[24]

References

  1. ↑ Beikverdi, Alireza. "NEM Launches, Targets Old Economy with Proof-of-Importance". CoinTelegraph. CoinTelegraph. Retrieved 1 April 2015.
  2. ↑ "GitHub - New Economy Movement". GitHub. Retrieved 4 January 2015.
  3. ↑ "How Japanese Blockchain Technology Revolutionizes Municipal Government in Belgium". CoinTelegraph. Retrieved 2017-03-23.
  4. ↑ Maras, Elliot. "Japanese Financial Institutions Partner With Technology Startups To Utilize The Blockchain". CryptoCoinsNews. Retrieved 21 December 2015.
  5. ↑ "NEM – Distributed Ledger Technology (Blockchain) » Technology". nem.io. Retrieved 2018-05-05.
  6. ↑ "VCs target Australian blockchain and cryptocurrency firms with new funds worth $44m". Financial Review. 2017-11-28. Retrieved 2017-11-30.
  7. ↑ "Top Ten Cryptocurrency NEM Catches on in Japan - CryptoCoinsNews". CryptoCoinsNews. 2016-11-24. Retrieved 2017-03-23.
  8. ↑ Warner, Matthew. "ChronoBank partners with NEM to create ChronoNEM wallet – allcoinsnews.com". Retrieved 2017-03-23.
  9. ↑ Mikha, Sean. "How I Got $1500 for Commenting On an Article". Lets Talk Bitcoin. Retrieved 4 January 2015.
  10. ↑ Dob, Daniel. "Tech Bureau partners up with NEM for new blockchain engine". The Merkle. Retrieved 10 June 2016.
  11. ↑ "Coincheck Says It Lost Crypto Coins Valued at About $400 Million". Bloomberg.com. 2018-01-26. Retrieved 2018-05-02.
  12. ↑ "$530 Mln in XEM Stolen From Coincheck Can Be Traced, NEM Team Confirms". Cointelegraph. 26 January 2017.
  13. ↑ "NEM Technical Reference Introduces Reputation-Enhanced 'Proof of Importance'". CoinTelegraph. Retrieved 2017-03-23.
  14. ↑ Warner, Matthew. "New NEM Features in September – allcoinsnews.com". Retrieved 2017-03-23.
  15. ↑ Lombardo, Hans. "NEM Q&A – Original, Tested Blockchain Platform, Proof-of-Importance, "Change the World, Forever" Tech". allcoinsnews. Retrieved 9 April 2015.
  16. ↑ "NEM Project Releases Hard Fork with Domain-linked Digital Assets – allcoinsnews.com". Retrieved 2017-03-23.
  17. ↑ "What Is NEM? Introduction To XEM | Crypto Briefing". Crypto Briefing. 2018-04-02. Retrieved 2018-05-05.
  18. ↑ Pangburn, DJ. "This Cryptocurrency Doesn't Want to Beat Bitcoin, It Wants to Beat the Economy". Motherboard. Retrieved 4 January 2015.
  19. ↑ Risberg, James (4 December 2017). "What is NEM Cryptocurrency?". CoinCentral.
  20. ↑ Beikverdi, Alireza (13 March 2015). "Proof-of-Importance: How NEM is Going to Add Reputations to the Blockchain". Coin Telegraph.
  21. ↑ OConnell, Justin. "Blockchain Project Thinks Microsoft Azure License Agreement Goes Too Far". CCN. Retrieved 18 April 2016.
  22. ↑ Holmes, B. "Japanese Company, Tech Bureau, Launches Private Blockchain Project". Bravenewcoin. Retrieved 21 December 2015.
  23. ↑ Redman, Jamie. "Mijin: 'Offering Blockchains To The World for Free'". The Bitcoinist. Retrieved 21 December 2015.
  24. ↑ Rizzo, Pete. "Japan's SBI Sumishin Building Blockchain Banking Proof-of-Concept". Coindesk. Retrieved 21 December 2015.
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