OmiseGO (OMG) is one of the most promising and anticipated blockchain projects out there and it's not without reason. Unfortunately many people have difficulty understand why exactly this is such a stellar project, and I've received requests to cover OMG from a follower to which I'd like to oblige with this post.
OMISE, THE PARENT COMPANY
OmiseGO is a project by the already existing company called Omise. Omise is an established payment service provider in South-East Asia, similar to Stripe in the USA, and they operate in Thailand, Singapore, Japan and Indonesia. In these countries, with a population combined of about 459 million inhabitants, Omise has a network of thousands of existing merchants using the Omise payment service to accept payments from customers. Currently this network processes $30 billion USD worth of value per year. It is common knowledge that in Asia mobile payments have taken over, and this is also one of the focuses of Omise. Their service is also sometimes called OmisePay.Omise has existed since 2013, and has been working on the OmiseGO project since 2015.
OMISEGO
They do this by making an open source and decentralized blockchain platform which has several features:
- It can scale to millions of transactions per second, enough to service the entire world
- It can (atomic?)swap cryptocurrencies and assets easily, frictionlessly and in a user friendly way. You can pay any currency in the world, with whichever currency you want and the receiver will receive whatever he/she wants. This is why they call OmiseGO blockchain agnostic
- A system of cash/in cash out points will create hundreds if not thousands of FIAT gateways - individual merchants will exchange crypto for FIAT and vice versa
Now, there is a lot of information in there that is very important to note. First off, OmiseGO is a platform, which means that OmiseGO is not a wallet or DEX itself. Instead, the OmiseGO blockchain is a platform on top which you can build a DEX or wallet with DEX function. Secondly, it's important to note that it's all open source which means that any party who wishes so can develop and use the ÖmiseGO platform.
Technically, OmiseGO sounds promising. Millions of tps and atomic swaps...! But how, you ask? It's because of Plasma. You may have heard of this scaling solution for Ethereum before, and it is indeed a highly anticipated technology. Plasma is being developed by and for OmiseGO. Joseph Poon, the co-author of Plasma (and the Lightning Network) is in fact also the principal author for the OmiseGO whitepaper.
Without going in too much details (and also because it's super complicated and I don't really understand it completely myself) let me just say that Plasma is a scaling solution which applies a sort of tree-structure to transactions. Instead of a single root chain (Ethereum), a Plasma 'sub-chain' is created involving branches of other chains which hold multiple other chains. Visualized it looks something like the picture above, and otherwise this meme below should help:
Not only will Plasma technology scale Ethereum to accommodate millions of tps, it will also enable atomic-swap technology which allows instant conversion between cryptocurrencies. This means I can go on vacation to another country and pay with my Dogecoin or OMG tokens, and the store owner there will receive whatever (local) currency he has opted for - this could be fiat or crypto.
CASH IN/CASH OUT
Because participating merchants act as a gateway between crypto and fiat since this system will allow them to receive payments in crypto which are paid out in fiat, the opposite will also be made possible through OmiseGO cash in/cash out systems. This is a system where participating merchants will provide a service to users where the user can deposit fiat money and receive crypto in return and vice versa. Essentially this means you could give the grocery store $100 and receive $100 worth of tokens, and vice versa you could bring your tokens to the grocery store and he would give you $100 of fiat money in return. Merchants collect a small fee for this service. Banks themselves can of course offer this service too, and likely will fill the gap for larger money/crypto orders.This eliminates banks as a necessary middleman and evens the playing field, and enables a widespread network of thousands of FIAT gateways that exist in the real world - not only on the internet and not only accessible through the banking system.
TEAM AND ADVISORS
The team and advisors are one of the most exciting aspects of OmiseGO and reason of it's skyrocketing price last summer. As I mentioned before Joseph Poon, co-author of the Lightning Network and Plasma is involved, but Vitalik Buterin himself is an advisor to the project as well.The list doesn't stop there; on the contrary. Looking further you'll find several other very prominent figures in the cryptocurrency space also appearing as advisors: Dr. Gavin Wood, Vlad Zamfir and Roger Ver.
There is simply no blockchain project in the space which has as much star power in their advisory team as OmiseGO does, hands down.
HUGE PARTNERSHIPS
Omise is an existing company as I said before, and it currently has partnerships with quite a lot of very valuable companies. These are mainly South-Asian companies which are not very known to western investors, but which have a high company worth in the billions. Other names that will sound familiar to most are McDonalds Thailand, AXA Life insurance and Burger King Thailand.For OmiseGO, the blockchain project, much is still under wraps but announcements have been made regarding a 'huge multibillion dollar company' which is developing the first implementation of a wallet on top of the OmiseGO network.
In the OmiseGO whitepaper it states: "OmiseGO is working with global conglomerates in the financial (SBI Holdings, Mizuho Bank Ltd., Bank of Ayudhya and others),", and these are indeed existing multibillion dollars banks. If you google these names along with the term 'cryptocurrency' you'll find a ton of information regarding blockchain projects these banks are working on. A lot of them don't specifically reference OmiseGO, but if you read closely you will find many, many similarities between their projects and OmiseGO. Many people therefore expect that these companies are indeed working on OmiseGO implementations for their own banking services.
THE OMG TOKEN
Not only are the project, the team and the partnerships great but the token is actually great too! OMG is an ERC-20 token, obviously as it is built on Ethereum, and it is indended as a staking token. I say intended because the staking mechanism is currently not enabled, as the OMG (plasma-)mainnet is not live yet. In the future, however, OMG token holders will be able to stake their coins in order to receive a reward for validating transactions. Basically this means that all of the transaction fees that are made to make payments on the OmiseGO blockchain are distributed among all of the token holders.It essentially means holding OMG tokens will generate a kind of dividend, or passive income.
There are 140 million tokens total, and OmiseGO themselves hold 20% for further development which will be invested back into the OMG ecosystem and 10% which the team receives themselves. These tokens are in fact the entire business-model for OmiseGO; their success as a company depends on their ability to make being a token holder profitable. They are, in essence, in the same boat as investors when it comes to profits. This is encouraging.
POTENTIAL IS YUGE
Since 100% of all the fees made on the OMG network are redistributed among the token holders, the value proposition of the OMG token is exceptionally clear: it's value is derived from the amount of fees generated by network use. This is in stark contrast to cryptocurrencies which depend wholly upon 'belief' in their value.
This means that if a lot of people use the network, there will be a lot of (small) fees, which add up to a big pile and which is then paid to all the tokenholders fairly depending on how many tokens they hold. Think of it like receiving part of the transaction costs of every Visa or PayPal payment, except not just from one of them, but all of the ones built on top of OMG.
Omise currently generates $30 billion worth of revenue per year with it's existing customerbase. When these get ported to the OMG blockchain this instantly creates liquidity and network usage. This alone is enough to speculate a little! Let's suppose that for each transaction, an average fee of 0.1% will be paid (it is unknown what the actual fees will be though). Yearly, this would mean that $30 million USD will be distributed among token holders, which comes down to a 'dividend' of $0.21 or so per year per token, straight up from the get go. In the stock market this kind of return alone warrants a price of about $4-5 each, but only if you take speculation completely out of the picture. Currently one OMG token is $13.
But let's not assume that OmiseGO will only service the existing customers. Let's look at the total market potential too. Because OmiseGO makes atomic swapping easy, it's often misrepresented as a Decentralized Exchange (DEX). It's not, but it is the architecture to build a DEX on. That means that the trading volume of any DEX built on OMG will be add to the transaction fees, and remember it's a platform so there will be more than one DEX interface built on top of it.
Globally the current trading volume of all cryptocurrency exchanges combined is $15 billion USD per day, or a dizzying $5.475.000.000.000 (not even sure how to pronounce) per year. Of course OmiseGO will not corner the entire market, but that's a lot of revenue and trade fees to go around.
Additionally there are also peer-to-peer payments which represent $3.5 billion USD per year.
Should a multinational bank, or even a nation-state, incorporate OMG one can only imagine the kind of volume and fees that will bring to the table.
People go crazy over exchange-crypto's like KucoinShares because they generate a part of the profits off the exchange, but OMG tokens are next level when it comes to this: they generate profits off of every DEX trade, every peer-to-peer payment, every grocery shopping, every international transfer, every loyalty program, every mobile payment, and everything else that is built on top of OMG. Palm Beach Confidential, which are referenced as being experts and having predicted the ETH rise correctly last year, has predicted the price of OMG to be potentially $700 each in a few years from now.
I myself like to stay more on the conservative side. With it's current market cap of $1.3 billion USD and a token price of about $13 each, I have absolutely zero problems seeing this do a 10x which would only bring it to $13 billion in market cap (and a token price of $130). Even when I type this, I feel this is extremely conservative as a $15 billion dollar crypto is by no means 'huge' in today's markets. Should OmiseGO succeed, and crypto continue to grow, I can see the market cap of OmiseGO reaching into the tens of billions over time, if not hundreds of billions of dollars if it really succeeds.
There's competition out there which aims to do something similar to OmiseGO (like MetalPay) but none of them even come close to what OmiseGO has to offer. OmiseGO simply has the best team, the best set-up (partnerships & existing userbase), the best token, and most of the competition is actually waiting on OmiseGO to develop Plasma so they themselves can use it too.
If you ask me OmiseGO is the real deal. It's often called the premiere project on the Ethereum blockchain and I do believe this is true. Both Ethereum and OmiseGO are co-dependent on eachother's success, as the Plasma technology developed for OmiseGO is going to be one of the pillars of Ethereum scaling. As such it feels almost logical to bundle the two together. I don't even see my own investments in OMG and ETH as seperate, because if ETH fails then OMG fails and probably vice versa too. Since I believe in Ethereum, and with as many pro's as OmiseGO has I feel confident in holding OMG in my portfolio. In fact, it is one of my core holdings and one of which I have never doubted if I should keep holding it. This one is for the long run, and years from now each token may yield hundreds of dollars each every year. If it's passive/residual income you are looking for, OmiseGO is definitely one to consider.
>> To visit the OmiseGO website click here <<
