Koinify, the crypto crowd funding platform has announced GEMS as the subject of their first crypto currency fundraiser. GEMS is a recently announced app where “Messenger Meets Cryptocurrency”, with a fully encrypted mobile messaging system AND a built-in digital wallet where you collect, store and spend GEMS tokens accumulated through your participation as a user.
Gems is a messaging app designed to turn the idea of a social network upside down. Lead developer Daniel Peled has stated clearly his belief that the success of social networks should belong with the people who use it, and not a few individuals in positions of power who want to leverage personal data for financial gain.
“Building Gems with the Counterparty system as the foundation was a logical choice,” says Peled, “where an encrypted messaging app can layer on top of a reward system that will benefit every user.”
Big investors are finding their way to Bitcoin startups, and lately more are focused on the exponential growth of applications that are being built on top of the Bitcoin protocol.
These “Bitcoin 2.0” companies are the new cryptocurrency frontier. The recent announcement by Overstock.com (http://www.overstock.com/) that they will utilize the Counterparty platform (http://counterparty.io/) for asset trading brings the cryptocurrency tsunami right to the doorstep of Wall Street and legacy finance. It also highlights the wisdom of Gems’ early decision to build on Counterparty.
Social Network 2.0
While the morning stock talk shows focus on Bitcoin’s exchange rate, the cryptocurrency-savvy Overstock CEO and fund manager Patrick Byrne looks through the hype and the price trend analysis, and focuses on the next big thing to hit the cryptocurrency space. This is where Overstock and Counterparty will have a leg up on their competition.
Yet, the Counterparty protocol doesn’t just revolutionize the way companies trade stocks and other assets. These application layers can do much more. Gems, being both an application and a network, removes centralized control, ensures user privacy, and rewards users for participation.
“The beauty of Patrick’s announcement and recent developments based on the innovative Bitcoin technology is that they allow the public to claim control over previously centralized endeavors,” says Peled.
Wall Street relies on a centralized trading platform, carrying a risk of a single point of failure that could result in a complete collapse of the system. Facebook, WhatsApp, and other social networking platforms take your user information, while promising to keep that information and your privacy secure. This is a promise that we’ve seen violated time and again.
Gems’ Peled: “Current IM applications, such as Skype or WhatsApp, use the information you provide to them for their own benefit. They maintain huge databases characterizing you and your behaviour in an attempt to profit from it—from the networks that you create with your friends and family. In this unique point in time, we are able to take this power from them, and keep the value we create in our networks to ourselves.”
Gems aims to reverse this profit-driven social network business model and turn it into one where users will be in control, sharing the success of a social network they help create. By distributing tokens, or “gems,” the network rewards users for active participation. The tokens can be then traded for different functions on the network and within the app itself, or traded for bitcoins on an exchange.
Companies that want to use the Gems network as a platform for contextual ads must acquire gems and spend them within the network. However, users will have control over which ads they receive on the soon-to-be released iOS and Android apps, or if they choose, the ads can be turned off entirely. So while corporations will still be involved, users will retain control, and revenues from advertising will be rewarded directly to them. Since the users of the network own the actual tokens that represent the value and utility of the system, the developers of the Gems platform are naturally incentivized to operate according to the will of the community.
It Is Still Early
Bitcoin and other blockchain-related technologies, such as the Counterparty platform, are still taking their first steps to maturity. A seasoned company like Overstock, willing to take a nascent technology and build on it in an attempt to ruffle some Wall Street feathers, will have to overcome multiple hurdles, including inevitable changes in banking regulations. On the other hand, like so many companies and projects before them, Overstock and Counterparty may be in a position to transform how asset exchanges, and perhaps the whole financial sector, could work for decades to come.
When it comes to changing how we interact with each other, Gems holds a similar position. While it will take some time to give industry giants like WhatsApp, Skype, and even Facebook a run for their money, new technology will continue to disrupt the current standard, and eventually invent a new one. Taking on the old and forging new pathways is a pattern set in our collective consciousness. Gems is now positioned on the brink an entirely new paradigm.
Gems crowdfunding will be begin mid November. For more information visit Koinify.com or Getgems.org.