Also read: Bitcoin Wallet Security Best Practice
CCN.com: Explain multi-signature technology in a way that a 12-year-old could understand.
MW: The idea of multi-signature technology can be illustrated using a missile silo launch analogy. In that analogy, two people must each turn their own unique key in a lock at the same time in order to launch the missile, and neither of them could ever launch the missile on their own, as neither of them are ever in possession of both keys. Multi-signature technology works very similarly in that two entities (e.g. the customer and the Bitcoin wallet provider) each have a key, and both keys are required in order to move funds. The use of a key in the Bitcoin world is called a ‘signature,’ and so multi-signature refers to more than one key being required to initiate a transaction.
The disadvantage of the single signature transaction system used by traditional Bitcoin wallets is that it creates a pretty vulnerable security model – supported by the fact that just under 10% of all Bitcoins currently in existence have been lost or stolen – and multi-signature technology presents a potential solution to this problem. The beauty of Bitcoin is that it’s programmable money, so we’re able to program additional rules, like multi-signature transactions, that must be met in order to move a customer’s funds. For example, whenever a Gem wallet is created, three keys are issued, and we require at least two out of three keys to generate a transaction. Of these three keys, the customer holds two keys (one online and one stored securely offline), and Gem provides the third key as a cosigner. This way, the customer is always in possession of enough keys to move money without us, and we are never in possession of enough keys to move customer funds without the customer. If the customer’s online key was stolen, the attacker couldn’t access their funds because they wouldn’t have access to our cosigning key or the customer’s offline key. Likewise, if we were compromised, an attacker couldn’t gain access to the other two keys owned by the customer, and would still be unable to access their funds.
CCN.com: Tell us a bit about the programming involved in this new security you’re developing.
MW: In addition to the multi-signature capabilities mentioned above, our team has created a comprehensive suite of security features. Gem’s platform also provides multi-factor authentication and bank level risk monitoring to ensure that Bitcoin wallets and funds are always secure and accessible.
Unlike other wallet solutions and APIs that require developers to build on top of their closed systems, the beauty of our API is that we have abstracted all of the complexity of Bitcoin security so a developer can easily configure a totally custom app. For example, an app developer who isn’t familiar with the technicalities of building multifactor authentication could use our platform to activate two-factor authentication through our Authy integration (one of our partners). In addition to all this, we make our API available to developers in multiple programming languages, and it can be implemented in under ten lines of code. Developer happiness is one of our top priorities, and our mission is to empower developers to build killer user-friendly Bitcoin apps without having to worry about having expertise in cryptography, security, or the underlying Bitcoin protocol.
CCN.com: Why should companies choose Gem over other firms with the same objectives?
MW: Companies and developers should choose Gem because our platform is the most secure, easy-to-use API on the market that will give them the security infrastructure necessary to create the next wave of amazing Bitcoin apps and products. Our team has deep domain expertise in payments and security, and we’re confident that we’ve built the best Bitcoin security solution that exists. Our COO, Ken Miller, who was VP of Risk Management in the early days of Paypal and served as an advisor to Square, was at the forefront of making credit card transactions safe online and digital payments when they were regarded as radical and dangerous. We also have a team member who was deeply involved in bringing Palantir’s product to customers in national security and law enforcement, although due to the nature of his assignment and background, we’re not at liberty to disclose specifics. Ultimately, we believe that people should have control over their own assets. Our product is unique in that we never take possession of our customer’s funds and instead provide the security around their transactions – a position that is in line with Bitcoin’s core philosophy and our overarching goal of returning sovereignty to the individual.
CCN.com: Who are some of Gem’s clients?
MW: We have a number of clients (such as Bitcoin exchanges, payment processors, and marketplaces) using our platform in beta. Very soon we will be opening the platform to the public, at which time we will be announcing Gem clients.
CCN.com: Do you plan to expand into the altcoin space, or are you sticking with Bitcoin?
MW: Yes, altcoins are absolutely in our near-term roadmap and will begin showing up in the product early next year.
CCN.com: What is an example of an existing application which would be better done if written with the help of Gem technology?
MW: The answer here is honestly almost any application or product. For instance, you could be a payment processor who provides software to merchants and then enables them to accept Bitcoin as a form of payment from their customers. Integrating the Gem API into their application is an advantage for the processor because with just a few lines of code (and without needing to be an expert in security or the underlying Bitcoin protocol), that processor can immediately offer a secure Bitcoin wallet to all their merchants that’s arguably safer than any account sitting at a bank. Another example: imagine the transformative impact of a ridesharing company being able to pay all of their drivers the moment a ride is completed. Immediately, the company-driver relationship is improved as drivers are happy to be getting paid instantly, rather than days later.
Images courtesy of Gem and Shutterstock.
Last modified: June 13, 2020 9:32 PM UTC