After having shot up to more than a billion dollars in total market cap, and with a price of more than $10 per unit, OmiseGO (or OMG) has been enthralling thousands both in and outside the cryptocurrency sphere. But what is OMG, and why is it so highly valued? To understand that, we need to first understand what the goal of the technology is.
What is OMG?
OMG is an Ethereum based “decentralized exchange” according to its white paper. It’s also described as an asset-backed blockchain gateway. In simpler terms, it’s designed to be a decentralized and distributed platform through which assets of almost any kind can be exchanged, moved, and stored. It could be used to transfer money internationally, exchange fiat money for other fiat money, crypto assets for fiat, and fiat for crypto assets, among potentially thousands of other use cases.
OMG is run by the Omise group, which is a reputable and long-standing payment processing company based in Southeast Asia. As such, they are currently putting a strong emphasis on the Southeast Asia region, and it’s remittance (sending money) markets. As someone who used to live in Southeast Asia, Singapore specifically, I can attest to the importance and value of remittance services. In Singapore, many of my coworkers at my previous office job would be from nearby Southeast Asian countries like Indonesia, Malaysia, Vietnam, Thailand, Brunei, and other nearby nations.
These people work in Singapore due to the high salary, excellent work opportunities, and high standard of living there, and then remit or send a portion of their income to their families back home. This kind of remittance requires two things. First, the money needs to exchanged into another currency, and then it needs to be moved.
Both of these steps can come with steep fees. Banks and remittance companies like Western Union make a killing just moving money around. One of the services that OMG will offer is exactly what these people needing remittance services are looking for – with the major difference being the huge reduction in fees and the massive increase in speed thanks to its use of the much touted Lightning Network. For the millions of people in Southeast Asia that need remittance services among other financial needs, OMG is a total game changer.
Remittance services aside, the Omise group is already in high-level talks and has in fact already begun making agreements with a number of banks and companies include McDonald’s Thailand to make use of Omise services for payment processing and other offerings. OmiseGo is now also a member of the Thailand E-Payment Association, putting them at the forefront of electronic payment technologies in the region.
OMG Uses Proof of Stake
This news alone, however, is not the only source of all the excitement behind OMG. One of the biggest drivers of interest in the platform is the fact that OMG will be a proof of stake system. While Omise has yet to release specifics about its proof of stake system, it has stated in its white paper that their goal is to have a highly distributed network of stakers, which implies that they will have low minimum requirements of their token in order to stake.
Stakers will be responsible for facilitating and processing network transactions, and they will be paid in OMG for their contributions. Proof of stake has been proven, at least on paper, to be a very electricity- and computationally-efficient method of securing a network. All an investor would need to do is buy and store OMG in an online appropriate wallet and then receive the benefits of transaction fees being paid to them.
What about the token itself? One OMG is already worth around $10-12 or so as of this moment, and just a few days ago it was only $7. It’s also currently number 12 in highest market cap, just behind NEO and XMR.
At present time, the proof of stake network has not begun full operation, and so it’s easy to assume that one staking begins, demand for OMG will skyrocket, and the price could double, triple, or quadruple depending on how fast network adoption begins. Early investors have the advantage of not only buying the token while it’s relatively low-priced but also being able to stake with more tokens for a lower initial investment once staking begins.
OMG Supported By Ethereum Foundation?
Some users on Reddit are speculating that the Ethereum Foundation is using OMG as a testbed of sorts for its own aspiration to move Ethereum into a proof of stake model. While this may or may not be true, the fact that the Ethereum foundation has taken such an interest in the token is also further evidence of the true power that OMG has, and the potential for what it may be in the near future.
The actual network itself, including staking, is expected to launch in Q4 of this year.