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What is OmiseGo (OMG)? | Simply Explained

By February 27, 2018 No Comments

What is OmiseGo?

Setting the standard for crypto payments 

OmiseGo is a cryptocurrency platform that wants to build a global exchange for users to conduct a range of decentralised financial services through, for example, payments, remittances, or any type of B2B commerce. More than a simple cryptocurrency, OmiseGo wants to “unbank the banked’ – marketing speak for wanting to enable a decentralised crypto exchange, peer-to-peer payment services, and allow growing economies to transition from using fiat money to digital currencies such as Ethereum and Bitcoin. In an ambitious venture, it wants complete interoperability between closed payment systems such as PayPal, Visa and Venmo; i.e. if a Google Pay user wants to pay a Venmo user, OmiseGo wants to bridge this gap across platforms and allow this exchange without incurring fees or cross-border costs.

Built on the Ethereum platform as an ERC20 token (OMG), OmiseGo’s goal is not only to disrupt the current financial system and be a one-stop-shop for payment services, but it also intends to turn loyalty points and reward schemes into currencies, identifying that these markets and the points that are accumulated by consumers are often stuck in closed platforms (think Qantas Frequent Flyer Points) that aren’t easily exchangeable or spendable. It also intends to offer financial services such as loans and deposits and provide a bank-like experience for consumers (in particular those in SE Asia and emerging markets) who do not have a bank account.

In contrast to a company like Ripple who is targeting large financial banks and institutions, OmiseGo wants to target individuals and businesses of all sizes. They intend to break the finance ‘roadblock’ that these parties often encounter. As covered in the Ripple explainer, the process of sending money across Southeast Asian borders is terribly inefficient.

Who are Omise?

OmiseGo is the blockchain-based start-up of a company that already has a solid foothold in the SE Asia marketplace. Omise (sans Go) is a payment gateway provider that has several large client partnerships and has had tremendous growth from its beginnings in 2013, solidifying themselves as one of the largest payment gateway providers by size and volume in SE Asia.

As a fintech start-up based in Singapore, it raised over $20 million traditional venture capital investors before launching an ICO for the OmiseGo token. Pronounced ‘Oh-Mee-Say’ and meaning ‘store’ in Japanese, it has hubs in Thailand, Japan, Indonesia and Singapore and is well placed to target the SE Asian market.

While the Omise team are strong (the CEO and founder of Omise, Jun Hasegawa, has worked for multiple start-ups), its advisors for OmiseGo are where it really shines. It has some of the best in the business. Ethereum founder, Vitalik Buterin, is one such advisor on the OmiseGo team. As is the Lightning network co-author, and several Ethereum-based researchers. Roger Ver, CEO of bitcoin.com and Bitcoin Cash evangelist is also an advisor.

White-label Wallet and SDK

Part of OmiseGo’s ambitious roadmap is to release a ‘white label’ digital wallet and software development kit (SDK). White label refers to a product that is created by a company that other companies can rebadge as their own. One of the most popular content management systems, WordPress, is often white-labelled by companies and media outlets to brand their entire website as if it were their own product. Once released, this will be a huge boost to the platform and attract companies wanting to leverage the digital currency space through an existing blockchain.

A software development kit is a set of software development tools that allows the creation of applications for a certain hardware platform, operating system, framework, protocol or development platform. This will mean individuals, companies and even governments can create their own applications from the SDK that will connect to the OMG blockchain. For example, governments could create a national wallet and tokenize their currency, or large corporations could take their loyalty reward schemes and migrate them to the OMG blockchain for interoperability between other reward schemes and for currency exchange. The exciting aspect to an SDK and white-label wallet is products will appear as though they are released from these corporations without even knowing they are built on the OMG blockchain. Think of popular websites or services where a tiny tagline somewhere in the app says “Powered by…”.

Main Token Features

  • An ERC-20 token on the Ethereum blockchain.
  • A cryptocurrency platform for companies to build their own products and services on whereby the OMG token secures a public, permissionless proof-of-stake network to enable a decentralised exchange for digital fiat and crypto alike.
  • Has received backing by financial firms in SE Asia who will use it as the framework for their existing digital wallets – think Venmo, Google Pay, WeChat Pay etc.
  • Proof of stake; OMG is staked by users to validate the network. If they validate a block correctly, they get paid the transaction fee from that block (similar to mining, but without the need for hardware.)
  • The OmiseGo token (OMG ticker) currently has a circulating supply of approximately 100 million (total 140 million).

Advantages

  • An ambitious platform which if successful, will be a game changer, enabling users to pay for goods and services with any of their digital assets (e.g. Bitcoin, Qantas Frequent Flyer points, or $AUD).
  • Strong existing fintech business behind the platform.
  • The beginnings of high-profile partnerships; chosen by McDonald’s Thailand to be its exclusive payments gateway for its mobile delivery app.
  • High-profile advisors such as Vitalik Buterin, founder of Ethereum.
  • Large presence in SE Asia where the market potential for blockchain payment services is enormous for millions of people.
  • OmiseGo is the first plasma.io project. Plasma.io is an Ethereum-based project that dramatically increases the scalability.
  • A roadmap with solid milestones for the near-future, the most exciting being the migration to an OMG blockchain and an OmiseGo wallet SDK (estimated Q4 2018).

Disadvantages

  • The current roadmap has been criticised for being somewhat vague and obscure.
  • Currently no OmiseGo wallet as yet, however the wallet is part of their upcoming roadmap.
  • Future potential; OmiseGo token holders are doing just: holding, until the future potential of the company’s goals are realised. There’s not a lot that can be done with the token currently.
  • Even with a whitepaper, roadmap and the plasma network upgrade, the goals of the company are somewhat ambiguous and it’s not crystal clear exactly how the platform will work for financial payments.

Summary

OmiseGo is a young platform with ambitious goals. If it lives up to all the goals outlined in its roadmap, it will be a game-changer in the financial payments space. However, as with all cryptocurrency projects, the future is unpredictable and success is not guaranteed. Their issuance of the latest roadmap was a slight misstep – it outlined grand plans and milestones but not a lot of detail as to how these technologies would actually work together (or what they would really do). If anything, the release of the recent roadmap muddied the ultimate end game for OmiseGo but the vision remains to allow companies to tokenise whatever they wish, be it a national currency, loyalty points or reward schemes.

Unlike some cryptocurrencies, the team and token haven’t gone into overdrive to hype the platform – it could well in one or two years time blossom into a powerhouse for payment services across the globe. With the likes of Ethereum founder Vitalik Buterin advising on the project, we can rest assured it has the talent backing it to reach its lofty ambitions.

Forget sleeping giant, OmiseGo may well be one of the sleeping behemoths of the crypto world right now.

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