Proof of Importance (PoI) is a consensus algorithm used in blockchain networks to ensure security and it was initially introduced by NEM as a novel approach.
In the Proof of Importance algorithm, network nodes are eligible to add blocks to the blockchain through a process called “harvesting.” Nodes that participate in harvesting receive transaction fees as rewards for their contribution.
A node’s significance score affects its chances of being chosen to harvest a block and receive rewards. The likelihood of being chosen increases with importance score. One must have at least 10,000 XEM in their NEM account to take part in this process.
A novel approach to staking and game theory, Proof of Significance considers a node’s total support of the network. In contrast to Proof of Stake, which frequently rewards coin hoarders, PoI takes into account three variables: vesting, transaction partners, and the volume and quantity of transactions during the previous 30 days.
If this idea appeals to you, reading in-depth articles about NEM and other blockchain projects that use the Proof of Importance algorithm will give you more information.