First there were social networks, then came Bitcoin. Then Bitcoin 2.0. Now, directly over the horizon, comes a new platform—a “social network 2.0” called Gems. This social network and messaging app is similar to Facebook and WhatsApp, but its developers have designed it with crucial differences. Gems will be decentralized, and it will reward its users for its success.
Five years after the invention of Bitcoin, the latest innovators are building applications that work on top of the Bitcoin protocol and that make use of Bitcoin blockchain technology. One of the largest contenders in the Bitcoin 2.0 sphere is Counterparty, “a platform for free and open financial tools on the Bitcoin network.”
Overstock’s Patrick Byrne recently announced that he is teaming with Counterparty to create a decentralized asset exchange, like Wall Street, but without the risks that go along with the centralization that creates single points of failure. Gems also aims to use the Counterparty protocol to protect its users from the risks that go along with centralized social networks, including loss of control over personal information and loss of privacy.
Lead developer of Gems, Daniel Peled says:
“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. . . . Building Gems with the Counterparty system as the foundation was a logical choice, where an encrypted messaging app can layer on top of a reward system that will benefit every user.”
When a centralized organization makes mistakes or fails, the organization can pass the costs of its errors and bad decisions down to its customers or users, protecting itself. In this way, companies don’t have to earn the trust of their customers because centralized organizations hold all the power.
Credit card companies promise to keep our funds secure, and Facebook promises to protect our privacy. Yet, when breaches happen, we lose more privacy, and they call our losses “protection.” We have had — until now — no choice but to “trust” these centralized services and give them more and more of our private information.
Gems aims to turn many of these problems on their heads. Instead of users bearing the costs of corporate errors and broken promises, users will reap the rewards of Gems’ success. Gems accomplishes three things that centralized corporations do not: it removes the centralization
of control, it ensures user privacy — no personal information is required to participate — and it will reward its users for its success. This new paradigm has the potential to change the current structure of business. Gems — like Byrne’s proposed asset exchange — will operate for the benefit of users, rather than the other way around.
The Gems network will distribute tokens, called “gems,” that will both represent the value and utility of the system, and reward users for their participation. The app will incorporate advertising, but companies will have to acquire tokens and pay them to the users in order for the ads to receive views on the network. Users will always retain the choice whether to view ads — and whether they want to add to their balance of gems by doing so (which specific ads will also be their choice). Users may also opt out entirely to experience an ad-free social networking environment.
Users will be able to trade their gems for different functions on the network or within the app itself, or trade them for bitcoins on an exchange.
Developers of the platform have consciously designed Gems so that they will naturally be incentivized to operate according to the will of the Gems community, rather than to the will of advertisers or any centralized company or organization. They have firmly placed the value of the system that they’ve created in the very hands of the community for whom they’ve created it. What could be more valuable than that?
[UPDATE: Koinify has announced they will be leading the crowdfunding on their new platform.]
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