Gems

Gems are valuable crafting materials found underground. There are currently 7 Gem types. Gems can also be placed on any side of a block after being mined. They are found in any Underground layer, except for the Underworld.

With the exception of Amber (which requires an Extractinator instead), Gems are found in the following forms, all of which drop Gem items when mined:
 * Embedded within Stone blocks.
 * In placed form on blocks underground, including sometimes in Underground Cabins, or rarely in the Dungeon.
 * As gem stashes, which are breakable background objects (similar to Coin Stashes), each resembling a rock with gems protruding.

Gems can also be found in higher concentrations in rare Gemstone Caves, which can contain multiple Gem types lining and embedded within their stone blocks. Gemstone Caves have their own unique background wall that cannot currently be collected or used by players.

Types
In descending order of rarity and value (rarest at the top):

Uses
Gems can be sold to NPCs as a good pre-Hardmode source of coins. Additionally:

All gems:
 * can craft Gemspark Blocks of a corresponding color.
 * can be combined with torches to create colored torches.
 * can be crafted into a gem staff (magic weapon).
 * can be crafted into Large Gems for the PvP game Capture the Gem.
 * can be crafted into Gem Locks, containers or altars for Large Gems.

All gems except Amber:
 * may be crafted into a colored Hook at an Anvil.
 * can craft a Phaseblade of matching color. Every color has identical attributes.
 * can be imbued into Robes.

All gems except Amber or Diamond:
 * can craft Stained Glass.

Other recipes:
 * Topaz can be used to craft the Sandgun.
 * Rubies can be used for the crafting of the Gold Crown and Platinum Crown.
 * Amber can be used to craft Crate Potions.

Tips

 * Making Stained Glass is the most profitable way to sell gems. (Except on mobile where it's less valuable.)

History
Gemmes 보석 Gem Gem Драгоценные камни