What is NEM?
An Indepth Guide to NEM
THE QUICK OVERVIEW
- 8,999,999,999 total XEM in supply
- Blockchain Technology
- Not a fork of another coin. 100% new code. Created in 2014.
- Centered in Japan and Malaysia
- White Paper (Called technical reference)
- Will soon be available on Trezor
- Nano Wallet Download
- NEM meetups and conferences. You can see some of the companies and organizations attending these here.
- NEM is aiming at companies that want a blockchain solution that’s ready to use, handles most data needs, is secure, fast and compatible with current systems. You don’t need a team of specialized programmers for NEM.
NEM YouTube Channels that keep up with NEM News:
NEM TEAM AND ORIGINS
It is incorporated and based in Singapore, not for profit. “The sole purpose of the Foundation is to introduce, educate, and promote the use of the NEM blockchain technology platform on an international scale to all industries and institutions.” – from foundation page. Lon Wong (President) and Jeff McDonald (VP) are two of the notable leaders and names of foundation. Foundation is spending $40 million in the next year (mostly 2018) to expand globally. $5million went to the blockchain global center in Kuala Lumpur
- Initial distribution
- 9 billion XEM was originally distrusted to 1500 original stake holders evenly plus several multi sig accounts for marketing, distribution to late redeemers, operational costs, node rewards, and future development. The link above is a description of the history of the process.
THE NEM TECHNOLOGY
Rather than PoW or PoS, NEM uses Proof of Importance. Higher importance score gives a higher chance to harvest a block. You need 10k XEM vested (explained below) to get a POI score, otherwise PoI score is 0. The amount required to be vested can be changed in future if necessary. Algorithms make it so scores cannot be manipulated or gamed. It’s more useful than just harvesting – a form of reputation. Can be used for voting and preventing spam.
Harvesting in NEM is the process of generating blocks and earning the transaction fees in that block as a reward for the contributed work. The PoI (Proof-of-Importance) algorithm determines who is allowed to generate a block (or more precisely: which generated block is considered as valid). Account connects to super node to harvest. When a new block is created, harvesting account gets the fees. In order to be eligible for harvesting, the 10,000 XEM in your account must be vested. “Vested” means that the XEM have remained in your account for a certain number of days. (Usually a couple of weeks, depending on the amount.) 10% of unvested balance gets moved to vested balance per day adding to your vested balance. A one-time fee of .15 XEM is required to start harvesting. Harvesting block difficulty is kept within certain limits and fluctuates with a cap of 5%. See page 17 of Technical Reference (white paper) for more detail. A separate account is created for delegated harvesting that connects to main account. Private key of main account is not exposed as the key of the proxy/created account is used to harvest. That proxy account harvests with 0 XEM (so no funds can be stolen), but uses the PoI of main account. Fees collected get sent straight to main account. You can turn of PC with delegated harvesting. No hardware is required to harvest.
“Sybil Attacks” were taken into consideration, PoI is Sybil resistant with below*
Uses NCDawareRank (Similar to PageRank). If you were to send portions of your balance to other accounts and send all of that XEM back to main account, the PoI score adjusts for this. Whales and spammers would gain very little PoI for this and it actually decreases after a certain point in simulations.
Other steps taken include; vested Balances with 10k XEM, taking days/weeks to be fully vested so one can’t immediately attack system, you can only be so many accounts that can then attack the system.
Sending XEM between two accounts adds PoI score at a decaying rate. PoI decays over time. Sending XEM only gives temporary boost. Largest component of PoI is amount vested. Advantage of gaming or spamming to get more PoI is minimal. PoI gaming will not result in a significant qualitative advantage over actors with the same balance who do nothing. (Tech Ref pg 37). PoI gives accounts with smaller PoI and vested balances more salience in the network than small time users in a PoS network. It also gives less salience overall to richer accounts than PoS. There is a theoretical maximum PoI score so whales cannot dominate.
P2P Reputation Management, modified version of EigenTrust ++
Uses modified because original EigenTrust++ was written with file sharing networks in mind where incomplete data is shared. NEM network downloads entities in its entirety and needed to be refined. NEM uses elliptic curve cryptography to ensure confidentiality, authenticity and non-reputability of all transactions. It uses the Twisted Edwards curve, which is considered one of the safest and fastest digital signature algorithms.
Protecting against spamming (Technical Reference pg 14)
Consider the unconfirmed transaction cache as having 1000 slots for a node. As long as less than 120 slots are filled, no transaction is rejected. Otherwise if there are already 120+ slots filled and transaction signer A arrives, that transaction is put into an equation to decide if they have a fair number of slots already taken up. If A occupies less slots than its fair share, the new unconfirmed transaction is accepted. Note: You can increase the chance that your new transaction is accepted by voluntarily increasing the transaction fee.
Nodes synchronize time to keep time stamps for transactions and blocks consistent. It’s comprised of NIS super nodes and nodes. Each one associated with a primary account, used for authenticating responses by that node. This prevents attackers impersonating a node without a private key. Having an account with a private key is how you can run a node
Super nodes first tier of network. Super nodes do heavy lifting of creating blocks and confirming transactions. An account needs 3,000,030 XEM to start a super node. As of October 21, 2017, there were about 670 super nodes online with 25% being in Japan, 18% in Germany, and 18% in the US
Nodes are light clients, like nano wallet and are the second tier of network. It allows more users to use PoI (With 10k vested). Harvesters collect transaction fees from blocks they harvest. Harvesters keep 100% of harvested amount.These can also be run on something like a Raspberry PI to harvest although this is no longer needed since delegated harvesting was implemented.
FEATURES AND ASPECTS OF NEM
Mijin is the private blockchain solution developed by Tech Bureau. Mijin can be used by companies that want their own blockchain solution to improve their existing businesses. Transactions across private chains (Mijin) require the use of the public blockchain and XEM. Any customers paying for products or services from companies that are using Mijin pay with XEM from the public chain and the transaction would be recorded on both public and private (Mijin) blockchains. Mijin uses the NEM blockchain technology and therefore, XEM.
Universal easy to use RESTful JSON API
The easy to use NEM API can be used with any programming language, making it easy to find developers to start using NEM.
Each node provides the API gateway that applications may use to access the blockchain and its features. This means that your application does not need to run any complex node software; all usage functionality is available through the API interface on each node in the network itself. This means that the blockchain can be used to create a variety of solution architectures with light-weight code in any language. For a few examples, it can provide direct mobile app access, be a gateway for client apps or web services, and link existing business contract logic, systems, or databases to the blockchain.
Smart Contracts are not on blockchain
This is by design as on chain smart contracts have posed serious risk for other blockchains, have presented scalability issues, and can lead to too much resources being wasted on the deployment of it. For NEM, smart contracts can be executed off chain, such as on company servers, and the transactions can be recorded on the blockchain through the NEM API. Instead on chain smart contracts, the below customizable smart assets can be used on chain.
Mosaics are the smart asset of NEM. Any kind of asset, real or digital, can be connected to a mosaic. They have customizable names, descriptions, divisibility, quantities as either fixed for mutable, and transferability restrictions if necessary and can have levies applied to them or be levies themselves on other mosaics. Example: The DIMCOIN ICO distributed their coins via mosaics. You invested XEM and they would send you a mosaic containing the tokens. The mosaic looks similar to an email with an attachment, the attachment being the asset. Once received, you can easily see your list of mosaics in the Nano Wallet. In the DIMCOIN example, you can then send those coins from the mosaic to other wallets or exchanges.
Namespaces and subdomains
This is a domain naming system. Continuing with the above example, when buying in the DIMCOIN ICO, the tokens came in mosaics and the tokens were named “dim:coin”. “dim” is the name space (what domain the asset is coming from) for the DIMCOIN tokens and “coin” is the subdomain (a description of the asset). Hence “dim:coin”. What’s special about this is that there can only be one namespace in the blockchain. So, you can be certain that when you receive the mosaic with “dim:coin” that it actually came from the DIMCOIN foundation because only they have access to the namespace, root domain “dim”.
NEM messages can be open, encrypted, and hex. They can be of any length up to 320 characters (272 encrypted), and messages can be strung together if needed. These can be used with mosaics to be official records, dates, or descriptions of the asset. Messages can also be used in sending XEM from one account to another.
Unlike other blockchain solutions, the multisig account is not created by combining public keys from other accounts. Instead, a pre-existing and funded address is converted into a multi-signature account and the cosignatories are assigned to it. The cosignatories can be assigned in any m-of-n combination where both the m and n can be any number of 1-32 (up to 32 cosignatories on an account); this includes 1-of-1 multi-signature contracts.
A 1-of-1 multi-signature account is possible in NEM as the account being turned into a multisig account has its private key nullified; meaning, it no longer has any power to initiate transactions. Only a cosignatory’s private key can initiate transactions on the multisig account’s behalf. It is therefore that accounts in NEM’s multisig implementation can be analogously thought of as parent/child accounts, where the parent accounts are the cosignatories and can make the child account, multisig account, make any transaction.
This is useful because now a dedicated account representing a blockchain notarization can receive messages to update the blockchain notarization, and can receive assets/mosaics sent to the dedicated account locking in value or adding status to the blockchain notarization. But the other subtle yet critical utility about NEM’s multi-signature solution is that, the dedicated blockchain notarization account be transferred from person to person. This means that the account is no longer “just an account” but instead is a certification account representing the state of the underlying content that is linked. These certification accounts are called “Apostille accounts”.
A notarization system that can be moved, changed, and updated on both the private and public blockchains with multisig accounts. Uses for Apostille would include car titles, government registration, digital media licenses, luxury consumer goods and anti-counterfeiting, two party legal contracts, and any other need for notarization.
An application framework convention with the above properties is powerful because 1) multi-signature contracts allow these Apostille accounts to be transferred or conjointly owned, 2) using namespaces denotes authority, authenticity, and authorship, 3) mosaic assets can be sent either to or from the Apostille account representing value or status, and lastly, 4) messages can be sent to or from the Apostille account representing additional information and updates.
NANO WALLET AND CATAPULT
Can be used desktop or smartphone. Don’t need to sync or download blockchain.
In the wallet you have access to Apostle, Mosaics, Name spaces and subdomains, a voting center, messaging, your delegated harvesting, sending and receiving XEM, XEM market information, and details of transactions and assets.
An Address could be as simple as a user’s account full of coins, like most blockchains. But it could also represent things like: a package to be shipped, a deed to a house, or a document to be notarized.
You can also buy XEM right in the wallet through Changelly.
Catapult is the big upgrade the NEM developers have been working on for some time now. It’s an upgrade of the core NEM technology from Java to C++ for scalability and speed. It will be deployed on Mijin first (Lon Wong said in interview “before end of 2017”), then the public chain afterwards. In tests, it has achieved over 4000 tx/s and averaging in the 3000 tx/s range.
It’s designed to be a highly customizable blockchain solution that can be utilized by any company, but specifically financial institutions. It’s ease of use and flexibility are meant to help facilitate the gradual shift from banks existing platforms to a blockchain driven system as its core operating platform.
It’sAPI gateway allows the blockchain to be easily connected into other centralized (new or existing solutions) or decentralized (new consensus driven solutions implemented by other initiatives) systems including smart contract systems, internal process driven solutions, settlement, payment, and clearing systems.
Catapult will have the below features and highlights
High scalability, design based on the industry standard tiered web architecture commonly found in enterprise computing Interoperability – allow external decentralized or centralized applications or smart contract solutions to transact using the blockchain. High transaction rates (in excess of 3000 transactions per second) Introduction of a high performance and highly scalable API gateway server layer with an open integration architecture High throughput message queues for real-time analysis and big data analytics of transactions Embedded escrow service for exchange of assets on the blockchain – a special transaction contract Permissible access to accounts, i.e., each person can only access what she can see. Business Rules – rules where object states can result in an indisputable transition to a new state as a result of a definite and conclusive action, specifically on the calculation of transaction charges based on a predefined set of irrevocable and immutable input criteria. Metadata – Accounts and assets shall have configurable metadata fields. Use of NoSQL database at the API layer, which is more suited for high speed messaging
In addition to the above, the existing functions and features already present in the current release of NEM will be enhanced and ported across to the Catapult project. These include:
A built-in messaging solution A process activated or manual sign-off function for transactions, with multiple approvals, where needed. A multiple ledger with multiple corresponding assets in one blockchain. Every account can hold multiple assets from multiple ledgers in the same blockchain so that these accounts can be used for all products and services the bank is offering, e.g., one account can be holding USD, EUR,GBP, Gold, Interest Rate Swap, ETF units, etc., each with its own history of transaction records and balance. Every account can be controlled by the financial institution – allowing for compliance and AML control mechanisms to be implemented in order to manage these transactions Freezing accounts Transaction reversal with full audit trail and accountability
THE NEM ECOSYSTEM – Platforms built on NEM
Luxtag provides digitized certificates of authenticity for products (or machines, vehicles, luxury goods, consumer electronics, etc.) on a blockchain that will be updatable, can have messages attached, and their conjoint ownership can be flexibly transferred. These digital token accounts (certificates) will be used to stop counterfeiting of items, track the status of the item throughout its life, and record transfer of ownership. Introduction video White Paper – All the technology is Apostille, so it’s the basically the Apostille white paper. Medium Blog
They are building an exchange platform for cryptocurrency, real world assets, and fiat.Introduction video White Paper Reddit Medium posts FYI – Home site is currently unavailable in the US due to SEC rules. You can get around this with a VPN.
COMSA is an ICO platform for existing businesses. Any ICO on the COMSA platform is voted on and a legitimate business. They provide companies with legal consultation, blockchain expertise and solutions to support their own ICO and implement blockchain technology into their business. COMSA CORE is important to note. It’s part of the COMSA platform. It is aiming to bridge other cryptocurrency platforms such as Bitcoin and Ethereum to the NEM network and blockchain, to the private blockchain Mijin, and the existing exchange Zaif allowing businesses and customers seamlessly exchange any cryptocurrency. Introduction video White Paper(Direct download link) Reddit Medium posts
Bankera is a bank built on NEM technology and blockchain. They are working on providing all services you’d expect out of a blockchain-based bank. The founding team already operates a cryptocurrency exchange, e-wallet, debit card provider, and payment processor. It’s called SpectroCoin. Introduction video White Paper Reddit Medium Blog
Qchain is a blockchain-powered marketing and advertising platform. Their flagship application is a direct buy marketplace that will make it easy and simple for advertisers and publishers to connect. ICO begins October 24 Introduction Video (no official one) Application demo videoWhite Paper Reddit Medium Blog
Bankera – On going. To Nov 14 QChain – Oct 24 To Nov 20 Versus VR – Q1 2018 – startup – Will be don on COMSA. Talked about in this video starting at about the 3 min mark.
Dragonfly Fintech They are developing a homogenous cross-chain interoperability solution to link multiple instances of blockchains together.
Landstead Landstead uses NEM blockchain technology to create a decentralized registry of land and other properties, allowing government and citizens to co-create an open blockchain system that can be trusted and consulted by interested parties. Introduction Video
NEMPay NEMPay is an app to transfer assets in an easy way, directly from mobile devices, using NEM Blockchain. Introduction paper
NEM Authenticator NEM Authenticator is a mobile application, for Android & iOS, where the user can confirm their transactions securely. Introduction article
Woocommerce Gateway XEM Plugin lets you automatically take payment and settle orders in XEM. Description link
Partnering with Tech Bureau to use Mijin for PointInfinity.
Will allow merchants to deploy point-based and electronic money managements systems, wherein they can design their own membership programs and Point of Sale (“PoS”) software for loyalty programs and special offers. Hitachi’s existing solutions for managing sales are already popular with restaurants, cafes and shopping outlets offering customized services, coupon and loyalty program points.
The Japan Gibier Promotion Association, a division of the Japanese Ministry of Agriculture, Forestry and Fisheries
Using Mijin to streamline the meat supply chain process that will enable end consumers to trace the history of the meat, from the hunting grounds
Metaps Plus will adopt NEM’s blockchain technology into their existing payment infrastructure.Coinroom will be a new exchange in Korea on Nov 11 and will be first to list XEM in Korea. They are integrating NEM API into their service. This means XEM and any NEM based Tokens (DIM, CMS, future ICO on NEM platform) will be able to be traded on it. So, any company deciding to use the NEM platform and issue a token will immediately have an available exchange ready. Also, they will issue a Coinroom token through COMSA.
Tech Bureau is well known in Japan and picked up the NEM blockchain technology very early on. This is likely the reason XEM is the second most popular cryptocurrency in Japan. Tech Bureau is the cryptocurrency and blockchain development company that developed Mijin. It uses NEM technology for Mijin. Mijin will be upgraded to the Catapult solution by the end of 2017.
Quote from Tech Bureau: “Through an operational test of large-scale electronic money core banking systems, stability was maintained even at times where the test servers took damage, and it succeeded with an average speed of over 3,000 transactions per second and the highest reaching 4,142 transactions being processed and settled. Mijin is being used in such a wide scope, that 311 companies from 15 countries, from financial institutions to electronic money, points, online gaming and logistics, have applied for a demonstration.”
Tech Bureau also runs the Bitcoin and cryptocurrency exchange, Zaif. Blockchain consulting services are also being provided. Hitachi partnership in using Mijin. Hitachi is one of Japan’s biggest multinational conglomerate’s which is described above in further detail. Link again for ease
Blockchain Global is one of Australia’s leading blockchain companies, Melbourne, AU. Also, a large BTC mining group. In addition to the mining activities, the company has established a consultancy business, Bit Technology, which advises on the utilization of blockchain in the growing list of commercial applications. The company has also developed an incubation hub & fund, Bit Fund, which is predominately focused on aiding companies that have a focus on commercializing blockchain technology.Partnership is aimed at “expanding NEM’s reach while facilitating mainstream adoption of blockchain technology internationally”.
They opened with NEM foundation a 10k sq. ft., blockchain center in Kuala Lumpur, Malaysia, Q3 2017. Inside NEM Ep 10 gives a tour. This is the first of 5 planned around the world. Others include China, Australia, Europe, and US. $5 Million of NEM Foundation is going to be allocated towards supporting blockchain companies in the blockchain center. It serves as an incubator, accelerator, and co-working space for NEM and also houses NEM Blockchain Innovation Lab. For R&D as well as to gain regional support for organizations interested in using NEM platform within their IT infrastructures.
Australian Crypto exchange powered by NEM and for NEM foundation will be coming soon, It is being built exclusively for XEM. Other cryptos will be able to be traded. (Blockchain Global’s Australian Cryptocurrency Exchange (ACX) 2017 into 2018. Based in Melbourne. The revenue helping fund NEM Foundation since 100% of harvested blocks go to harvesters.
Atraura is Barcelona based. It leads development of Landstead, NEMPay, NEM Authenticator. It specializes in the development, integration and maintenance of Blockchain technology across many kinds of industry from finance to government or logistics. They started with Ethereum and now use NEM
Dragonfly Fintech is Lon Wong’s company. It’s a block chain solution, providing a platform service for local or international payments and settlements. Based on its patent pending business method, it aims to disrupt the traditional SWIFT method and other forms of correspondent banking. They are developing a homogenous cross-chain interoperability solution to link multiple instances of blockchains together.
Kchain is a leading blockchain SI company specializing in the development, integration and maintenance of NEM technology for local Korean enterprises.
Jeff McDonald is part of LuxTag. The LuxTag project applies the NEM Blockchain Technology commercially into the brand protection industry. Certificates of authenticity are created as accounts on the NEM Blockchain, in order to prove product is genuine. Ownership is tagged through NEM’s unique on-chain multi-signature contracts; and as a result, manufacturers and brands can suddenly visualize the lifetime journey of their merchandise.
Sumeru is based in D.C. Locations all over US and India. Sumeru Inc. is a global consulting company providing services in cyber security, data analytics and cloud based solutions. Sumeru is currently in process of developing blockchain based solution for one of the world’s largest volunteer based organizations with a presence in more than 165 countries. The solution based on the NEM technology will have identity of patrons in blockchain, perform transactions in various currencies involving various banks, it will also manage the database of the workshops, and volunteer based programs conducted by the organization. Is recognized by government of India as one of the top 4 IT auditors in the country.
The Dtk is an open source framework for managing all your IT tasks and workflows. It unifies the management & configuration of infrastructure, applications & 3rd party services across public and private clouds. Reactor8, the company behind the Dtk project provides consulting and system integration services in the areas of big data & enterprise blockchain deployments. The NEM ecosystem open source deployment and management modules are available for private NEM deployments as well as application integration services for connecting enterprise apps with the public NEM blockchain.
Asta is an IT company in New Zealand They focus on web and development, mobile application development, business consulting, managed services and cloud services. First reference of them is on Inside NEM Ep 16 starting at 5:30. Announcements, projects, ICO’s coming 6-12 months.
Public relations/marketing groups NEM is partnered with:
Why is volume so low?
Most of the XEM volume is on Zaif in Japan. Zaif does not publish their volume data as they have no transaction fees and want to prevent any bots from manipulating the volume numbers.
Is XEM on any other wallets like Jaxx or Exodus?
Unfortunately, not yet. No plans for any other wallets as of now. Nano wallet is your best option.
Where to buy XEM
You can buy XEM for Bitcoins (BTC), CNY, or JPY on exchanges such as Poloniex, Bittrex, BTC38, BTER, Changelly and Zaif. XEM is integrated with Shapeshift.
Difference between XEM and NEM?
NEM is the blockchain technology and ecosystem. XEM is the crypto coin.
What drives the value of XEM?
This answer is somewhere between the author’s opinion and how it actually all works and will work. (Just an FYI). The overall cryptocurrency and blockchain adoption is also a big part, like any other coin.
Companies can easily adopt the NEM blockchain to their existing networks because it’s ready “out of the box”, making the transition smoother and easier for the companies to integrate the NEM blockchain. Mijin is also positioned to be a big player in the banks and financial institutions of Japan because Mijin was originally tested by large Japanese banks, so most are aware of it already, and it was designed with them in mind. So, NEM being easy to use and integrate with existing systems while also being highly scalable and secure are key features of the adoption of NEM into existing companies.
The value of XEM will increase as the NEM ecosystem described above grows and we start seeing these applications and solutions slowly find their way into everyday life, such as buying a cup of coffee with XEM (which the Hitachi partnership will likely accomplish soon). On top of that, XEM is required to communicate between public and private chains. XEM is held on the pubic chain. These transactions between chains require a small fee and will need to be harvested and confirmed. When these companies start interacting with their clients, customers (their products and services will be integrated into the private chain, Mijin) customers and clients will need to hold XEM to interact with these companies private blockchains. So, as more companies start to accept and adopt the NEM blockchain solutions, the best currency available to interact with these companies will be XEM.