Back in 2013, when Micah Winkelspecht started seriously looking into Bitcoin, he spent most of his time reading, researching and looking for people to talk to. In Los Angeles, that meant regular visits to a park downtown where Bitcoiners were meeting up.
“It was fifteen people in a park,” Winkelspecht remembers. “I said to myself: Bitcoin is way more important than this.”
He began organizing his own meetups and soon began bootstrapping a startup. He had quit his job to “deep dive” into Bitcoin and didn’t know what exactly he would do. “I just knew it would be something important.”
Three years later he is CEO of Gem, one of the nation’s first and most vibrant blockchain solutions providers.
“Data integrity will be one of the most pressing concerns for business over the next decade,” Winkelspecht says, “because blockchains allow data to be shared securely with full integrity across every industry.” The result, he explains, is not just increased profitability but improved efficiency and irrefutable security.
“A blockchain gives you the ability to store data with full integrity. You can know for certain the data you are acting on has not been modified or tampered with. You know for certain who created it, who touched it or changed it, when they changed it, and who subsequently acted on it.”
Gem’s focus on blockchain enterprise solutions was a natural outgrowth of its initial business model as a Bitcoin API (Application Program Interface) developer. The blockchain was invented by now-infamous (and still pseudonymous) Satoshi Nakamoto in 2008 as the transaction network for the digital currency Bitcoin. As such, it provided a decentralized means of authorizing and recording Bitcoin payments with a level of security never before equaled on the Internet or anywhere else. As Gem’s website succinctly describes it, “The blockchain gets its name from its structure, which consists of time-stamped blocks of transactions, linked in chronological order. Each transaction record and block is irrevocably recorded and secured by cryptography.”
“When I read Satoshi’s white paper [proposing Bitcoin] I tried to poke holes in it from a technical perspective, but I couldn’t find any,” Winkelspecht says.
He became fascinated with Bitcoin and its blockchain after spending 12 years working in Los Angeles’ “Silicon Beach,” developing companies and startups. Satoshi’s proposal for a new digital currency and the payment system to go with it “struck into the two worlds that interested me the most after the financial collapse of 2009—technology and money.” He believed after 2009 there was a better way, and he wanted to be a part of it.
Winkelspecht’s first project on his own was to write an open-source library he called MoneyTree, that he describes as a “kind of BIP 32 hierarchical deterministic wallet.” By 2014, he had raised venture capital and Gem was
officially launched. “After working on building a Bitcoin wallet, I realized that there were no good tools out there for developers who wanted to build in the ecosystem, and that’s what Gem would do—create the tools.”
Winkelspecht recruited his new team on a set of criteria that included passion and excellence, but not necessarily previous experience with Bitcoin and blockchains. “We went after spectacular people across a variety of industries, knowing that the Bitcoin part of it can be taught. Now we’re like a family.” Bringing together a cross-industry group has also supported Gem’s ability to relate to the needs of a wide variety of clients.
The Gem team soon realized that blockchain technology had applications well beyond the scope of Bitcoin or even the financial industry. “We realized blockchain technology was not a financial technology, but a data management tool. It allows us to build extremely robust data infrastructures—high level automation that simplifies, decreases costs and maximizes efficiency.”
Gem now excels at the most demanding of blockchain applications, from bank-grade security to smart contracts and the securing of asset and transaction integrity. The company takes a holistic approach to creating solutions, working side-by-side with customers from prototype to production.
Blockchains allow you to replace that third party with powerful business logic that runs on data you can trust. It has all the benefits of a central data repository with none of the drawbacks.
Because all industries use valuable data to make informed business decisions, the benefits of blockchain technology will be sweeping. Winkelspecht says that just in the last six months, Gem has witnessed a significant spike in the blockchain inquiries made by large enterprise companies. The bigger financial enterprises jumped in first, he says, because “if you are a large institution moving a large amount of assets, you’re going to see the positive impact of using blockchains right away.”
But other applications are looming fast on the horizon in arenas that include health care, Internet of Things, media, distribution, digital rights and royalties. The largest growth area in the coming year will be health care, Winkelspecht predicts.
“Think of it this way,” he suggests. “A blockchain gives you the ability to store data with full integrity. You can know for certain the data you are acting on has not been modified or tampered with. You know for certain who created it, who touched it or changed it, when they changed it, and who subsequently acted on it.
“No previous data platforms allowed multiple parties to communicate with this level of transparency and security with their market partners; they had to rely on spaghetti-networked bilateral APIs or some central third party acting as trusted intermediary.
“Blockchains allow you to replace that third party with powerful business logic that runs on data you can trust. It has all the benefits of a central data repository with none of the drawbacks.”
His advice to business people looking for blockchain use cases in their own organizations?
“First, look to see where there is some sort of manual reconciliation of data workflow requiring human intervention and processes, or delays due to data reconciliation. Second, look for areas where there is not necessarily a great deal of trust between parties, where you want to build a system you can automatically trust.”
In the future, Winkelspecht observes, people won’t talk about blockchains any more than they now talk about the lower level architecture that makes the Internet work.
“We’ll just use them every day without thinking about it. Their presence will be ubiquitous.”