NEM(XEM) was recently hacked of around $534 million USD. Yes! That has made it one of the largest thefts across the globe! Judging the cryptocurrency already? We don’t blame you!
Coincheck where the hacking took place, reimbursed $440 million (46.6 billion yen) to its client base of 2,60,000. For now, the Coincheck is being pinpointed for having stored the cryptocurrency on a low security hot wallet instead of a cold wallet. Hackers used malware to steal the private key and fleece the funds.
What is NEM?
Referred to as world’s first “Smart Asset” blockchain, NEM has been around for a few years now. Launched on March 31st, 2015 it is one of the most popular cryptocurrency across the globe. The currency symbol of NEM cryptocurrency is XEM.
As such, NEM is a peer-to-peer cryptocurrency and is popular for its proof-of-importance (POI) algorithm, multi-signature accounts, and encrypted messaging. A fork of NXT, it is an open source cryptocurrency.
What Does Smart Asset System Blockchain Mean?
Smart Asset System allows users to custom the Blockchain to manage their assets. That is, users can customize their Blockchain to handle their smart contracts. Smart Asset System is made up of 4 parts, that are:
Addresses: Addresses are where you have your assets, that is, coins, contracts or any type of business records. These are the unique items of the Blockchain that can be updated.
Mosaics: These are the tokens and digital items such as coins, shares, other currencies etc that can be traded on this Blockchain.
Namespaces: The web address that prove user identity and also a shelter for all the assets on the Blockchain. This is the unique place that is dedicated to the owner on the NEM Blockchain which makes it easy to identify, use and trust it.
Transactions: This is where all the action takes place. Transactions allow the user to make transfers between Mosaics and Addresses and also transferring of ownership of addresses as well.
Proof-of-Importance: The algorithm used in NEM is referred to as Proof-of-Importance. This algorithm is used to timestamp all the transactions. In this cryptocurrency, importance of a user is determined by the number of coins that they own and the number of transactions that they have made. This type of algorithm was adopted to encourage the users on this blockchain to transact and not just hoard NEM coins
Harvesting: This is different from mining. This process has been specifically designed to generate NEM cryptocurrency so that the integrity of the Blockchain is maintained. Whenever a transaction is carried out, the first system to verify it will notify the other nearby users, therefore creating a pool of information. Thus, in such a way, a block is created. A block contains all the records and transactions, just like in ledgers.
Traceable: While there has been a lot of stress over private transactions on Blockchains like Monero, it is the other way around for NEM, wherein all the transactions are traceable. Of course, on the face of it this may look like a disadvantage, however this is an added advantage to the protection of the buyer and the sellers. Also, it is an advantage for businesses who can track consumer spending habits thus increasing the value proposition for the clients of the business.
NEM In Industries
According to their website, NEM can be used in various fields, from Financial, Business Management, to Secure Records and by Decentralized Organizations. NEM cryptocurrency can be used make financial and mobile payments, create cryptocurrency, in equity markets, as liquid asset and make own own payment apps as well. It can be used in Business Management for accounting, KYC, loyalty reward points, logistics and shipping.
NEM also lets the users secure records as well, like, sending encrypted messages, authentication and notarization, anti-counterfeiting, corporate compliance and even land registry. Decentralized Organizations can use it for the purpose of voting, stock ownership, and ICO’s.
Also Read: Job Opportunities with Blockchain Technology
What Lies Ahead?
On Wednesday things looked up for NEM cryptocurrency with 44% increase in its value. In fact, it made it to one of the top 10 cryptocurrencies as well. However, the effect got nullified because of the debacle at Coincheck which impacted in a 35% loss of value of NEM, making it the poorest farmer in the top 50 cryptocurrencies.
This year has been a rollercoaster ride for cryptocurrencies, and for now NEM is definitely the worst hit. Owing to the fact that security has become a prime concern for many countries, like USA, India and Japan which is why a lot of emphasis is being laid on regulations for these cryptocurrencies.
The move to reimburse the funds has probably gone in favor for NEM, as it has reinforced the confidence of the clients who had to go through the nightmare of the hacking incidence. The NEM cryptocurrency does have its share of believers who are confident that this is just a passing phase and that it will definitely make a comeback! It’s just wait and watch now!