Social currency network, called Gems, was launched at the Inside Bitcoins Conference in Tel Aviv on October 19th. The new mobile application is similar to other social messaging services.
The developer Daniel Peled compared the service with popular app Whatsapp. The difference is that the name of the user is a nickname for the bitcoin address, what enables users to send both bitcoins and gems.
For certain actions the app users receive gems, which can then be then exchanged for digital currency and sold for fiat dollars. The users are usually paid when they expand the network: “Everything we do on Facebook or Whatsapp, [the companies are] making money out of it. They’re using our information, they’re selling it to advertisers and we don’t see anything out of it. We think that the users should be rewarded much more for using the application. So anything that we can do to incentive people, we do it with Gems.”
The new app, which is built on Counterparty protocol, is designed for both Android and iPhone devices.
Peled explains the registration process: “You get a passphrase and a wallet built inside the social messenger, and because your name is also an alias to your phone number and to your bitcoin wallet, it makes it very easy to send Gems and bitcoins inside the application. It’s just like sending a text message to a friend.” He added: “You don’t need to know too much about the public address or private key, it makes everything very, very simple.”
Peled noted that the Counterparty protocol enabled the developers to create assets without worrying about mining infrastructure, as this function is ensured by the bitcoin network.
He considers that sending messages on the bitcoin block chain is likely to slow down Gems. “I haven’t seen a good social application built on top of bitcoin that works as smoothly as Whatsapp,” Peled stated. “So, the messaging side is just like any other messaging application, we use a server infrastructure, but the ownership and the reward model is built using block chain technology.”
There are also concerns that Gems’ price may decrease, what will not prompt people to keep them. Still, Peled expects the asset to rise in value due to the strong userbase.
“There are two things that will give real value to Gems, one is the users, 40% of the Gems are going to be distributed in a couple of years for inviting people in the network,” he said. “The second thing is we’re trying to build a social network that is more fair for the user.”
The users can also obtain Gems by viewing advertisements on the platform. Peled said that his platform gives the ultimate choice to the user.
Besides, entrepreneurs will be allowed to offer their in-app features that leverage the currency. “I can think of a lot of things you can do when you have a social network that is monetized,” Peled added.
Gems is going to build a community of users through an initial pre-sale of its native currency.