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). To be able to harvest, the account needs a vested balance of at least 10,000 XEM.
The NIS that you harvest with does not have access to your local wallet that you delegate harvesting to, which means that your funds are secure. Even if someone takes over the NIS server and gains root access, or the NIS's owner is a bad guy, your funds are safe. Your private key is never transmitted.
Setting Up Delegated Harvesting
To activate "delegated harvesting", first open your wallet up. You will notice that you have two options. One is to “Start local harvesting” and the other is to “Activate delegated harvesting”. To activate "delegated harvesting", please stop local harvesting first. Then select “Activate delegated harvesting”.
You will then see a popup that explains it will take 6 hours to start harvesting. Enter your wallet password and click okay.
If you were successful, you should now notice that there is a new transaction in your Dashboard that shows that you have made an “importance transfer” essentially delegating your importance score to another account that you may now use freely without any risk to your real account.
After 6 hours has elapsed the button that was once labeled “Start local harvesting” should now read “Start delegated harvesting”. You can click on this button and may now harvest on any NIS safely whether that be a local machine or a remote node.
If everything is working correctly, you will now see an option to “Stop delegated harvesting”.
You now have all of the benefits of remotely harvesting safely with none of the risk. Congratulations!