There’s an old saying about companies like Whatsapp: “If the product is free, you are the product.” While Whatsapp’s services appear to be free, you pay for it in privacy and convenience, with the information you yield for advertising purposes, and the annoying ads themselves.
Every person you invite to the Whatsapp network makes them a measurable amount of money, none of which is given to you. Gems is an attempt to fix that using cryptocurrency. Utilizing the Bitcoin blockchain, they’ve created a token designed to sustain a social media network with more personal autonomy in a trustless manner. They’ve also included some additional features that will be attractive to the cryptocurrency community.
Although their server-side software is proprietary, Gems is an open-source initiative much like any other. Its focus is on instant messaging, and they plan to open source the client-side application once it’s stable. The server deletes messages locally upon being delivered to the recipient, as Satoshi intended, and the associated cryptocurrency is based on the open-source Counterparty protocol.
The supply of Gems is automated and stable:
- 100 million will be released.
- 8 of which will be kept by Gems team.
- 12 go to marketing and third party developers.
- ~36,500 gems are distributed to stakeholders every day.
The rest of the Gems are divided evenly between the presale and subsidizing the first 3 years of “airdrops,” their equivalent to block rewards, which introduce their currency to the economy.
Airdropped Gems are given to you based on the number of people you invited who became active users, as well as how many Gems you already own. The Gems associated to users who were not invited by anyone are given proportionally to the presale participants, as well as any Gems remaining from the presale itself.
So, what do we do with all of these tokens? As referenced earlier above, they allow us to reduce unwanted advertisements, albeit indirectly. Although sending messages to friends is free, sending unsolicited messages or advertisements will cost you Gems. The network gives you a couple Gems for opting to view advertisements–enough to sustain your usage–which makes corporate marketing an option that can be cheaply eliminated.
Much like bitcoins in the 22nd century, the initial supply of Gems will eventually run out. They have employed a similar model to combat this. Some of the Gems paid by advertisers and those issuing unsolicited messages will go to airdrops; the demand for Gems will increase in tandem with the number of people using their messaging application, which will increase the amount of airdrop funds.
To build this user-base, they’re working on a variety of features in addition to this reward structure. Your alias is also derived from your Bitcoin address, which allows you to send and receive BTC or Gems in their application on the fly, on mobile for both iPhone and Android. Your password–like your messages–is not kept by their server, so they can only be obtained from you. Less privacy-conscious users may choose to additionally base their alias on their phone number, allowing them to easily find their friends like on traditional messaging apps.
The Gems team is essentially gambling their time that their share of the Gems left over after development will go up in value, effectively aligning them with any other stakeholder. As such, they plan to continue development–they hinted at the possibility of using the blockchain network for messaging in the future–and might give their traditional competitor Whatsapp a run for its money.
Andrew is one of the primary organizers of the Vancouver Bitcoin Meet Up, and the Director of Public Relations for the Bitcoin Cooperative. He spearheaded merchant adoption in Vancouver, having signed up the world’s first Indian restaurant, the Waves that houses the world’s first ATM, Vancouver’s first nightclub, and more! He is also the founder and lead coordinator of CoinFest, the first “decentralized” decentralized currency convention.