Gem Sets New Standards For Bitcoin Wallet Security

Gem offers what is possibly the most secure digital currency security platform on offer, and it is well on its way to becoming one of the most popular. Earlier this month Gem announced an additional $1.3 million US had been raised, to supplement its existing funds of $2 million.

“Our mission is to just make Bitcoin simple and accessible for everyone, everywhere.”
— – Gem.co

Gem provides security solutions with two distinct features. Firstly, the platform is designed for implementation on 3rd-party websites, not by end users. The Gem platform is provided to financial applications and services wanting to implement first rate security. “Developers all over are building products where they want to integrate Bitcoin and had no idea how to do that. Or lacked the manpower to pull it off.” states the company website.

Secondly, Gem applies bank-grade security measures and best practices rarely seen in the Bitcoin industry. The platform includes hardware and auditing solutions created for the most secure banks in the legacy banking world.

“You’ll have the most secure app around without needing to know a thing about building security features. Our multi-signature platform and Hardware Security Modules eliminates single points of failure and provides comprehensive security for your wallets.”
— – Gem.co

Despite the complicated and high-tech offering, the end user will still find Gem-powered wallets easy to use, and well-integrated into services using the platform. “There are thousands of Bitcoin apps with many more currently in development, but none of them will resonate with users unless they are secure and easy to use,” said Gem COO Ken Miller

“Bitcoin is hard. It’s not an easy technology to work with, build on, or learn. On top of it all, building Bitcoin security into products is incredibly difficult. Even just the concept of Bitcoin can be challenging to many, and rightfully so. That’s where we come in.”
— – Gem.co

Bitcoin security revolves around the protection of private keys: information required to move bitcoin during a transaction. To achieve the level of security implemented by Gem, several technologies have been applied, including industry-leading Hierarchical Deterministic wallets and multi-signature authorization, to prevent fraud and theft. From there, Gem has taken security a step further by implementing system monitoring, multi-factor authentication, and a rules engine to ensure the highest level of protection available.

“Gem not only tackled the hard problems of streamlining Bitcoin adoption for developers, but did so with a strict focus around making it the most secure offering on the market.”
— – Gem.co

Gem isn’t the only company providing security solutions for 3rd-party websites. Both CoinKite and CoPay offer 3rd-party wallet services, however they also offer direct-to-customer wallet services. With the recent announcement by Gem that a partnership with ExpressCoin has been formed, the company appears to be gaining ground on its competitors. Integration with the Santa Monica based financial service provider allows customers to use their own wallet, or sign up for a Gem powered alternative.

New Gem wallet addresses are generated instantaneously, and the customer receives 2 out of the 3 private keys for their multi-signature address. The first is for everyday use, the second is meant for offline backup. This leaves the financial service provider with the 3rd key. Having one key means that they can co-sign transactions, but can’t move funds without authorization.

“Gem’s multi-signature API wallet also stands out from typical industry custodial wallets in that Gem is never in possession of enough keys to move a customer’s funds without their approval.”
— – Gem.co

In order for financial services to incorporate Gem wallets into their services, Gem’s website offers a developer-friendly API platform. APIs allow developers to quickly and simply integrate software tools. Using Gem APIs, developers can build apps using Bitcoin and other digital currencies without requiring extensive knowledge of cryptography, security or the underlying protocols.

“Gem’s focus on developer happiness sets it apart from the rest, with an easy to use API that can be integrated into a variety of apps and services with less than ten lines of code. “
— – Gem.co

As well as 2-of-3 multi-signature functionality the Gem platform also integrates a sophisticated set of rules and monitoring to intelligently co-sign transactions and prevent fraud. The company was also the first in the Bitcoin industry to implement FIPS 140-2 Level 3 certified Hardware Security Modules (HSMs) – used in legacy banking security environments. “Besides sounding cool, what that string of numbers means is that the Gem keys are never seeing the plain text light of day. If a bad guy physically tried to break the machine open and steal the cards inside these Level 3 devices, they are actually designed to self-destruct and zero-out the data.” states the Gem website.

According to the company supplying the HSMs, Thales e-Security, the hardware is currently used to protect military encryption keys and other mission critical secrets, securing more than 80% of global payment transactions.

“The entire banking world has been using HSMs for years to secure financial transactions, including Visa, MasterCard, American Express, and even Apple Pay. But until now, the Bitcoin industry hasn’t been using them because they weren’t designed for Bitcoin. We fixed that problem,”
— – Micah Winkelspecht, Gem CEO and Founder

Also a first for a wallet service, Gem provides two separate levels of security auditing for all customer accounts; one in-house in real-time, and another conducted by a company providing penetration testing, network security audits, procedural audits and line-by-line code reviews, according to the Gem website.

“As if the multi-signature, monitoring, and rules protection wasn’t enough, we took things a giant step further.”
— – Gem.co

The Gem platform may be a huge step forward in digital currency security. With Expresscoin a working example, we should see more and more services adopt Gem – and at the very least make this level of security a standard for future wallets.

“2014 was a monumental year for legitimizing bitcoin as a currency.  2015 should be the year it becomes mainstream; however, crucial to its wide adoption and advancement is trust in its security, and we’re excited to provide that security to Expresscoin and all other apps and services.”
— – Ken Miller, Gem COO