Gemini, a US-based cryptocurrency exchange, has been a firm supporter of Bitcoin since its launch by the Winklevoss twins in 2014.
Thanks to a range of initiatives, the exchange is playing a major part in the cryptocurrency market’s efforts to persuade everyday people to view Bitcoin as a legitimate currency.
What is Gemini?
Gemini has made a name for itself as one of the most secure and respected crypto exchanges. It became the first licensed Ether exchange back in 2016, it is a trust company regulated by the New York State Department of Financial Services, and it offers a high level of liquidity. As a result, it draws in institutional investors as well as large individual investors.
Its prominent status means people tend to take notice of Gemini’s latest developments. And this means the exchange is able to make a big impact in the crypto space.
Here are three of Gemini’s initiatives that are helping to boost Bitcoin’s reputation among investors and the wider public.
It was the first exchange to launch Bitcoin futures
Back in 2017, Gemini announced that Bitcoin (USD) futures contracts would begin trading on the CBOE Futures Exchange. XBT futures are cash-settled contracts based on Gemini’s auction price for Bitcoin, denominated in US dollars.
They enable investors to take a directional view on the price of Bitcoin (both long and short), gain exposure to Bitcoin prices, and hedge their existing Bitcoin positions. In simple terms, you can bet on Bitcoin rising or falling in price without actually owning the coin.
The move was significant because it represented a new way of wagering on (and against) the booming Bitcoin market. It was seen as a major step towards the legitimisation of Bitcoin, and one that would fuel its status as an emerging asset class.
Notably, it was the first time that Bitcoin had been traded on a major exchange. The move was closely followed by a Bitcoin futures listing on CBOE’s rival, the Chicago Mercantile Exchange.
It is the first major exchange to support SegWit
This year, Gemini introduced support for Segregated Witness (SegWit) addresses and transaction batching. This means that SegWit addresses — which begin with bc1 — can now be used for Bitcoin deposits and withdrawals.
SegWit allows digital signature information to be stored separately (or segregated) from its transaction data. Without signatures, Bitcoin transactions weigh around 30-40% less, thus taking up less “block space” on the network and reducing the transaction fee. As block space is limited, any decrease in transaction size allows for more transactions per block and greater overall throughput in the network.
As SegWit’s use, support, and adoption grows, it is hoped it will help to reduce fees, wait times, and network congestion, thus benefitting all participants on the Bitcoin network. SegWit transactions also lay the groundwork for more advanced technologies such as the Lightning Network – a “Layer 2” payment protocol that operates on top of cryptocurrencies and enables fast transactions.
It offers a high level of security for investors
Gemini places a lot of emphasis on security for its investors. Recently, it announced that it had passed a security compliance review conducted by auditing firm Deloitte. Gemini claimed to be the first crypto firm to have successfully completed the System and Organization Controls (SOC) 2 Type 1 examination.
Gemini has also secured insurance coverage for the digital assets in its custody through a global consortium of insurers. The insurance, which was arranged by Aon, further supports the necessary measures for consumer protection, asset storage, and transactions on the Gemini platform.
Other ways in which Gemini is keeping people’s assets safe include: all of its private keys, which are used to sign cryptocurrency transactions, are custodied off-site in the secure, guarded, geographically distributed facilities of its cold storage system; multisignature technology provides added security from attacks and increased fault tolerance; it maintains capital reserves; and all customer US dollar fiat funds held in omnibus accounts are held at FDIC-insured banks and are segregated and legally distinct from Gemini’s business and operating accounts.
These security measures help to protect consumers from unnecessary losses. They’re another important way in which Gemini is advancing Bitcoin’s status as a reliable, secure, and legitimate digital currency.