TheMerkle; What is Proof of Importance?
May 21, 2017
The NEM ecosystem has attracted a lot of attention in the past months. This alternative cryptocurrency solution aims to make the entire concept a lot simpler for the average person. One of the aspects about NEM that caught our attention is known as “proof of importance.” This particular aspect deserves a closer look.
Proof of Importance Is the Cornerstone of NEM
It is always important to keep an eye on what these alternative cryptocurrency ecosystems bring to the table. NEM has become an integral part of most people’s radar as of late. However, a lot of people seemingly remain unaware of what this project has to offer exactly. Proof of importance is a critical aspect of NEM and how the system ensures all computers in the network form a consensus.
To be more specific, every account on the NEM blockchain is assigned an importance score. This score will influence how individual users can “harvest” the blockchain. One could say harvesting on the NEM blockchain is almost the same as what miners do on the Bitcoin blockchain. The objective is to add people’s transactions to the blockchain, in exchange for a small financial reward. As people’s importance score grows higher, they will have a better chance at getting these rewards.
In order to be eligible for the “importance calculation,” users need to have at least 10,000 XEM in their balance. Considering there are just under 9 billion XEM in circulation, achieving that goal is not overly expensive by any means. It is possible this threshold of 10,000 XEM is changed in the future, but for now, it is still the same. If NEM were to become more popular, the developers may announce such a change, though.
This method also ensures people who are passionate about NEM will keep funds locked up in what could be seen as a “masternode” in a way. Similar to other cryptocurrency blockchains, all NEM transactions are public domain. It also provides onlookers with a way to determine a rating for the importance of individual accounts on the network. It is an interesting take on things, and an excellent way to ensure the network remains decentralized at all times.
A lot of people may be wondering how the NEM network determines the importance score. Once someone owns 10,000 XEM or more, there is a mathematical calculation taking place. The white paper details all of these steps nicely, which results in the importance score for individual accounts. More XEM transactions on the network linked to this account will improve the importance score over time. Make sure to check out the white paper to ensure you understand how this system works exactly.
It is also important to note NEM’s proof-of-importance is resistant to arbitrary manipulation. Sybil attacks and loop attacks are mitigated thanks to some of the underlying technology. It is equally important to remember proof of importance is not proof of stake, although it is easy to draw parallels between the two. All of this is also explained in detail in the white paper. All things considered, proof of importance is an intriguing system that seems to be working quite well for the NEM ecosystem.
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