New Economy Movement 101 | What is NEM?

There’s a great sense of unfairness in how wealth is distributed across the world, with the 1 versus 99% ratio often mentioned when wealth inequality is discussed. The New Economy Movement seeks to stop this happening digitally.

Started by a Bitcoin Talk forum user known as UtopianFuture in 2014, the original NEM was intended to be a fork of open-source cryptocurrency network NXT. This was eventually dismissed in favour of developing a platform and associated currency that could inspire global financial change. NEM currently has roughly 3000 stakeholders working on the project.

NEM itself is a peer-to-peer cryptocurrency and blockchain platform that officially launched in March 2015. Its currency is known as XEM and it is now traded across many major cryptocurrency exchanges.

NEM prides itself on its blockchain syncronization solution that’s based on Proof-of-Importance (POI). POI helps create a fairer financial ecosystem as users have to prove their overall importance to the economy in order to harvest blocks. It works in a similar way to Proof-of-Stake, however, also includes information on how much a user has spent, their vested amount of XEM and cluster nodes in calculating a user’s importance score. This stops people from hoarding as many coins as possible, instead encouraging them to spend it.

NEM uses a domain naming system known as namespaces, which is similar to the ICANN domain naming system. There are higher level and subdomains, meaning a user with one domain can create many different subdomains for their different projects or business accounts. It also helps to build and maintain a reputation for Mosaics – custom assets on the NEM blockchain.

To ensure the health of the blockchain, NEM uses an Eigentrust++ as a reputation system. This measures the quality of work of nodes within the network, as opposed to just the amount of work the node does. If a node misbehaves, the network will detect this and exclude it from the system, ensuring the security of the network.

Together with Mijin, NEM is the first private/public blockchain combination that is said to have the potential to significantly reduce banking institutional costs whilst making banking far more secure. Mijin was trialled by Japan’s largest trust bank, SBI Sumishin Net Bank in December 2015. Over 2.5 million accounts with over 2 million daily transactions over a three-month period were tested and passed. This was followed by more testing by Japanese banks in 2016, achieving 1,500 transactions per second with 2.5 million virtual bank accounts. Mijin’s development goal is to reduce the cost of banking by 90% by the end of 2018.

In 2016, NEM announced that they were launching a hybrid for/non-profit entity to help promote blockchain and NEM itself more widely. Another key selling point of NEM is that it is said to be more accessible to the Average Joe on the street.

Its popularity in Japan and the current trend of investors looking at altcoins has led NEM is enjoy a sudden meteoric rise. Just two months ago XEM saw its price doubled in 24 hours, becoming the 4th largest cryptocurrency by market cap. By recent performance, it looks as though NEM is fast realising its goal of making the global economy fairer to everyone.

 

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