Gem Increases Security

”We empower Bitcoin companies to build incredibly secure products and services with our multi-signature platform. By abstracting away the hard parts of blockchain development, we offer our developers the simplest way to get up and running, giving them expert security by default.”
— – COO of Gem, and ex-PayPal exec, Ken Miller

The Bitcoin industry is familiar with security breaches. The most remarkable and still talked about is the 850,000 Bitcoins that have yet to be recovered from the Mt Gox meltdown. Only a few days after the Mt Gox anniversary, Bitstamp suffered the loss of 19,000BTC.

Gem the Venice-based wallet provider and developer platform, advise via their website that, “roughly 7% of all bitcoins that have ever existed have been stolen or lost. That’s over a half billion dollars in lost value due to poor key security.” On the 27th January, Gem announced they will be the first multi-sig developer platform to lead the way in the custom development of Hardware Security Model’s (HSMs).

Gem CEO, Micah Winkelspecht, explained the challenge they faced in executing their vision, "the payments industry has been using this hardware technology for years. But we looked at every HSM on the market to find one that could support Bitcoin wallets, and none of them could do it.” HSMs are in use securing over 80% of global payment transactions.

Gem eventually partnered with Thales e-Security. ”Our engineers worked closely with the hardware team at Thales for months to develop a custom solution specifically for the Bitcoin industry,” explains Winkelspecht.

Thales e-Security claims over 40 years of experience securing sensitive information, and the Thales Group protects the data of 19 out of 20 of the largest banks in the world, and over 3000 financial institutions. As a result, Thales is considered to be the largest provider of key security within the payments industry.

HSMs from Thales e-Security provide a hardened, tamper-resistant environment for performing secure cryptographic processing, key protection, and key management. With these devices you can deploy high assurance security solutions that satisfy widely established and emerging standards of due care for cryptographic systems and practices.

Richard Moulds, VP of Product Strategy at Thales e-Security, explains, “Cryptographic signing operations are central to every Bitcoin transaction and HSMs are perfect for securing not just the private wallet keys but also creating the signatures to transfer funds. However, Gem wanted to go further and lead the industry with higher order security techniques such as hierarchical deterministic key derivation and multi-signature transaction authorization. This required securing application code as well as keys and crypto to create a tamper-resistant application.”

The HSMs being customized to the Gem specifications include FIPS-140-2 Level 3 hardware-certified security. FIPS 140-2 is one of many cryptographic standards maintained by the Computer Security division of NIST, the US National Institute for Standards and Technology. NIST, in conjunction with the Canadian Communications Security Establishment (CSE) operates the Crypto Module Validation Program (CMVP), through which security products are validated.

“The additional steps we’ve taken to generate and secure all Gem keys within FIPS certified HSMs is a first of its kind, and signals to the industry how serious we are about securing blockchain technologies,”
— – Gem COO and former PayPal executive, Ken Miller.

The Gem platform is aimed at optimizing the developer experience by providing an easy to use Bitcoin security platform that doesn’t sacrifice security for convenience, “Just as Thales has become the most recognized and widely used security provider for global payment transactions, Gem seeks to be the Bitcoin security provider of choice for the next wave of developers building Bitcoin apps and products.”  – Gem

Developers have been quick to offer support to the platform. Michael Smallwood the Founder of Bitmo, a US based mobile payments company, explains the importance of the additional security features, “The decision to use Gem’s multisig solution was a no-brainer for us. Not only was their API easy to integrate, but we felt great knowing that our funds would be secured by the strongest solution on the market. The news that Gem will now be securing keys inside of HSMs custom built for our industry was yet another reminder of why we made the right decision partnering with Gem.”

Aaron Siwoku CEO of CryptoSigma, South East Asia’s first multi-currency bitcoin wallet provider, stated, “Gem’s platform offers our customers the security and flexibility they desire and allows us to focus on providing a superior product and user experience. Their addition of HSMs to store and protect all Gem keys just further reinforced to us how seriously they take protecting cryptocurrency,”

VP of Product Strategy at Thales e-Security, Richard Moulds concluded, “By taking advantage of unique capabilities of these machines, Gem is securing Bitcoin transactions in a way that matches and exceeds security best practices that are a pre-requisite in the payments industry,”