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What is OmiseGO (OMG)? A step-by-step guide
Built on the Ethereum platform, OmiseGO’s vision is to become the number one, peer-to-peer cryptocurrency exchange platform. OmiseGO is much more than an altcoin. It’s designed to be a financial platform, with the intent of disrupting current financial institutions and methodologies. It’s all built on top of Ethereum, one of the most popular decentralized application platforms on the market today.
What is OmiseGO?
|Icon||Symbol||Initial release date||Algorithm type||Max. supply|
|OMG||2013||N/A||~140 million OMG|
OmiseGO describes itself as: “The answer to a fundamental coordination problem amongst payment processors, gateways and financial institutions”. The goal of the platform is not so much to be a cryptocurrency such as bitcoin or Dogecoin, but rather to offer users an alternative to online exchanges.
The problem with current exchanges is that, in order to buy a cryptocurrency like bitcoin, it’s always necessary to start from a fiat currency, for example USD. There are very few options and little variety available in exchanges, especially when it comes to converting one cryptocurrency to another.
How is OmiseGO different from standard exchanges?
OmiseGO aims to disrupt the current method of buying and selling cryptocurrencies from exchanges. It does this by connecting currently existing cryptocurrency wallets to a central OmiseGO blockchain, over which users can exchange cryptocurrencies quickly and easily. OmiseGo differentiates itself by being decentralized and currency agnostic in the following ways:
Exchanges today are centralized operations. This means that the databases containing all transactions carried out on the exchange are stored on a server (or group of servers) owned by the exchange, alongside all of the data available for a particular user, and often including identification like a passport or driving licence.
OmiseGO offers the same exchange functionality, but keeps all of its transactions decentralized and stored on the blockchain. This keeps the data secure because a hacker cannot access one location to tamper with, say, the available funds of one person. A hacker would need to convince every user of the blockchain, making hacking attempts virtually impossible.
- Currency agnostic
Most exchanges allow users to exchange money from fiat to cryptocurrency and back. This restriction causes a lot of fees to be taken out of a user’s account. For example, if I wanted to convert my BTC (bitcoin) to ETH (Ether), I would first need to find an exchange that trades in both BTC and ETH. Next, I would have to send BTC from my wallet to the exchange. Then, I’d convert my BTC to a common fiat currency (e.g. USD). Finally, I would have to convert the USD back to ETH.
Throughout this whole process, exchanges would take fees, often when selling the BTC and again when buying the ETH.
OmiseGO circumvents the process by claiming that it’s currency agnostic. It doesn’t matter whether you’re converting ETH to USD, or ETH to BTC. The process and fees remain the same: one direct conversion with one tiny fee.
Where can I use OMG?
At the time of writing, in September 2017, OMG are not coins you can use outside of holding them in your wallet as assets in OmiseGO.
How do I purchase OmiseGO coins (OMG)?
To acquire some of its valuable OMG coins, you should create an account with a reputable online exchange and convert some USD into OMG. Once the OMG coins are in your wallet, their value will rise or fall depending on whether OmiseGO’s value rises or falls. You can sell back to the exchange at any time, for example if you make a profit.
As of September 2017, OmiseGO’s exact operational method remains unclear. However, the vision as described by the developers is to bring together service providers and help them bridge the gaps between them by using the OmiseGO currency agnostic blockchain.
For this reason, OmiseGO is not a platform that can be used on its own. It requires other service providers to plug into it for users to reap its benefits. If it sees widespread adoption, most users might not even know that they’re using OmiseGO’s platform as they go about using their own cryptocurrency’s platform.
What to watch out for
OmiseGO is a very young platform, still in its early stages both in terms of development and adoption as of September 2017, so not a lot is known about it other than a general, bird’s eye view of its team’s vision.
What’s next for OmiseGO?
The future of OmiseGO is unpredictable and a lot remains to be seen. This is both a good thing, as the community has a lot of power over where the platform will go next, and a bad thing, since potential purchasers might be wary of putting money into the coin.
Market and cryptocurrency experts seem confident that OmiseGO has good things in its future, but nothing is guaranteed.
Frequently asked questions
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