NEM (cryptocurrency)

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.[3] The NEM team created an automated tagging system. This automated system followed the money and tagged any account that received tainted money.[4]

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.[5]

In July 2018, the Ukraine Central Election Commission began investigating the use of blockchain technology in elections using the NEM platform. The tests were performed in a test environment with 28 nodes, using test coins provided by the NEM Foundation. The commission estimated that a cost of a node would be approximately $1,227, which was described as a “small” price to pay for the technology. The test proved NEM’s potential utility in voting.[6][7]

In November 2018, Malaysia’s Ministry of Education formed a consortium of universities to use NEM’s blockchain technology to authenticate academic certificates. The consortium was created to combat the rise of fraudulent fake degree certificates and to optimize certificate authentication. The ministry stated that NEM was chosen because of its “unique features in managing traceability and authentication requirements”.[8][9]

Namespaces allows users to own domain names on the NEM blockchain just like a person or an organization owns an Internet domain name. Just like on the internet, a domain can have a sub-domain, namespaces can have sub-namespaces. And it is possible to create multiple sub-namespaces with the same name (example: “foo.bar” and “foo2.bar”, “bar” is the sub-namespace/sub-domain). A namespace and a domain name is the same in this document and shall be used interchangeably. Namespaces can have up to 3 levels, a namespace and its two levels of sub-namespace domains.[11]

NEM network implements a modified version of Eigentrust++ to identify and minimize the impact of malicious nodes. Eigentrust++ is a security clustering algorithm which monitors past behavior of nodes in the network and enables nodes to give reputation to their neighbors in clusters. 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.[12]

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.[13]

NEM's multi-signature contracts are universal, meaning they are built into the blockchain, not on top of the blockchain as in third-party reliant software. This unlocks various advantages and interesting possibilities for the user. The contract enables several people to administrate the activity of an account, control assets such as XEM from one account, other mosaics, or create additional contracts such as creating a new token.[14][15]