Envisioned as a ‘New Economy Model’, the NEM cryptocurrency project solves many of the legacy problems with other digital currency. Going beyond the basics of other projects, NEM (XEM) thought through some of the heavier problems that plague legacy blockchains. Namespaces allow users to not only create a wallet – they can subdivide it into separate accounts like a traditional bank. Further, their Mosaic System allows for the digitization of assets, of which their XEM coin is only one.
A digital asset or Mosaic is traded on the blockchain, with smart contract functionality. As the namespace functionality allows for sub-coins on the chain, users can create a Mosaic to represent their asset. Goods, services and even contracts can all run through the Mosaic system as a further financial capacity of the NEM blockchain.
The Proof of Importance Algorithm
As projects start moving away from the proof of work algorithm, proof of stake (PoS) is taking over. Yet PoS is not without problems. It encourages hoarding of coins, which can have a detrimental effect on the market ecosystem. NEM’s Proof of Importance model challenges the PoS dominance. Rather than simply considering the amount of currency stored, NEM requires that user to engage in the market. Users that involve themselves gain a higher importance score, as determined by the network.
This score is determined by the quality of transactions, where high value transfers to different addresses are worth more than swapping value back and forth. These staked accounts are known as harvesters and require a minimum of 10,000 XEM to begin the process. Harvesters help validate transactions on the chain and receive a portion of fees in return. This part of the process is like the Proof of Stake algorithm.
The Mijin Private Blockchain
Compared against the public NEM blockchain, Mijin is a completely different system. Envisioned as private solution, it bypasses the potential security concerns that come along with public access. Offering the same functions as NEM, Mijin runs on the private network of the entity using it. Like enterprise software, the NEM team sees Mijin reducing fees and managing supply chain systems and logistics. Mijin is tangentially similar to Ripple’s product suite, without the inter-bank RippleNet protocol. It would help private banks upgrade their legacy software, while introducing standardized systems for easier integration.
As the name would suggest, Mijin’s largest presence is in Japan. Several banks have started pilot programs using the blockchain software. In turn, the success of Mijin and the NEM blockchain propelled them to a top position by market cap. They’ve secured their place in the top 20, and with a variety of functioning products, they’re showing promise compared against their immediate competitors.
Article By: Adam Stone
