GetGems: The Startup Where Social Networking Meets Bitcoin

You can send text messages and money through this app, which will be giving out 'gems,' its own virtual currency, over the next three years.

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Daniel Peled, GetGems CEO
Daniel Peled, GetGems CEOCredit: Mor Elnekaveh

Social networking is all the rage. Virtual currencies such as bitcoin are rather less so. For one thing, getting your hands on bitcoins is technically very difficult. You have to be a software and mathematical whiz.

But what if it were dead easy to get your hands on some virtual currency – with the same ease that you send text messages? The Israeli startup GetGems has created a social networking-cum-electronic wallet application that makes the world of virtual currency accessible to the casual social networker, says company CEO and founder Daniel Peled.

Why would the casual social networker want to use virtual currency, anyway? Because it enables payments (over Internet alone) without the middleman, who always cuts himself a coupon. Also, more and more real-world businesses are starting to accept bitcoin.

Risky business

Virtual currency is a young industry and a very risky one – for everyone: for investors, for obvious reasons, and for users as well. A virtual currency can lose its value overnight, for instance. Nor is there a real-world market for it: you can't pay at the supermarket using Internet coins.

Bitcoin: To get any, you have to be a whiz in math and programming.Credit: Bloomberg

On the other hand, if you master the medium, you can cut out the middleman and save money.

GetGems is a very, very young company that has nonetheless managed to attract some venture support ($400,000). It is also the creator of a new virtual currency, or crypto-currency, called gems.

The company actually started out, in September 2014, with the idea of simply building a user-friendly electronic wallet for bitcoins. But to get people to use its wallet, it needs people to download it to their phones. The company came up with the idea of creating its own user-friendly currency, gems, which would be given out for free over a period of time, in a manner that incentivizes the user to download the app and recommend it to friends, too.

To be clear, its wallet can be used to make online payments in either bitcoins or gems (if you have any and the recipient accepts them) at virtually no cost. The company hopes that the wallet functionality can expand in the future to additional virtual currencies.

Heard of bitcoin, don’t know what it is

Using the GetGems app, users can send a regular message like any platform, or it can be used to "wire" bitcoins or gems to another user, with roughly the same ease as sending a regular message.

The app is available in Google Play for free and the registration process is simple, promises company CEO Daniel Peled.

Actively incentivizing users

"When you create the user, we create a cryptocurrencies wallet for you. Starting in March, every day for three years, you get some free gems just by downloading the app. If you invite your friends – you get gems as reward," Daniel says, adding that of the roughly 700 cryptocurrency companies out there, GetGems is the only one actively incentivizing users through rewards (free gems).

Contribution is measured by the number of active daily users which were introduced by the user to the network so far, the company explains.

The company's hope is that their free gems will make their wallet app go viral.

The company's hope is to achieve a critical mass of Gems users, who will thereby give the currency actual value. And thusly, the GetGems app will become a sort of electronic wallet for online payments – using not only the gems but bitcoin itself as well.

All this is very nice. How will GetGems make money? "The business plan is to charge a fee for things that add real measurable value to the users, for example an initial connection between interested parties," explains Peled.

Spam is a huge problem in the online world. With GetGems, users can message each other for free. But if they want to message people they don't know (knowing only the hashtag), they will have to pay the recipient a given number of gems. Users can decide how many unsolicited messages they are prepared to accept in a day, and get paid directly.

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