Banking the Unbanked: Why OmiseGo is making history

Banking the Unbanked: Why OmiseGo is making history

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*Disclaimer: This article is created to educate readers and not tell them where to invest their money. The editorial team and contributors are not liable for any gains or losses of income due to your investment choice.

Cryptocurrencies have yet again reached new heights, and they are on their way to changing the payment system we see today. Crypto-leader, Bitcoin, has reached new highs passing $7000 and creating a new resistance level that we can expect to reach in the not to distant future. If we look at list of existing crypto currencies, there are only a few out the hundreds that have real world value and applications that can impact various industries. One in particular has managed to challenge the way payment processing and transactions can be done via fiat and crypto.

What is OmiseGo?

OmiseGo (OMG) is a sub-branch of the venture payments company Omise, which operates in Thailand, Japan, Singapore, and Indonesia. This company has been around since the earlier stages of blockchain technology’s debut to the world. OmiseGo is essentially a payment system that allows exchanges through fiat currency and decentralized currencies such as Bitcoin, Ethereum, and etc. Through the Ethereum mainnet, the user will be able to complete transactions such as payments, remittances, payroll deposit, B2B commerce, supply-chain finance, loyalty programs, asset management and trading with low costs and fees. Essentially, this platform is on its way to cutting out the ‘middle man that is used for payments and remittances such as Paypal, Visa, MasterCard etc.

OmiseGo

Their saying “banking the unbanked” is focusing on the far eastern regions of Asia. There is a large untapped sector of Asians (around 73%) who are strongly against using banks, do not have the qualifications of opening an account, or their businesses are only transacted through cash. If these people could access their own cash through the OmiseGo platform, which would allow them to send money to any person with minimal fees, and could still exchange their cash into a different currency then the possibilities are almost endless.

OmiseGo is also planning to tear down one of the problems in the crypto world, and that is the multiple eWallets that are used for each crypto token. OmiseGo team is developing a decentralized eWallet interchange platform. What this means is when using the decentralized platform, you can have your various currencies, which are linked to various eWallets, and exchange them into any other currency with both eWallets from two different tokens communicating with each other. However in order to do this they would need to decentralize the cryptocurrencies.

Does this sound familiar? Of course, this is exactly what exchanges such as Bittrex, Poloniex, etc. are used for, but now we have OmiseGo planning to decentralize that entire industry. This is a major game changer, and it provides a lot of incentive for people who use these exchanges. Exchanges have had many cases of hacks, where people have had their cryptocurrencies stolen. By decentralizing the exchange, the only true way for a hacker to obtain another person’s currency would be obtaining their own eWallet, which can only be accessed by their devices, or by hacking the blockchain. The second option obviously easier said than done.

OmiseGo

This decentralized exchange will require order books which will be propagated by the proof-of-stake incentive system. The orders will be executed when the participants have the block confirmations, then theJy are placed in the book. This promotes a constant flow payments, transactions and liquidity throughout the network. The participants will have a ‘clearinghouse’ that will operate on the Lightning Network, which will be a user of the platform whose chain will verify that transactions are done on the Bitcoin blockchain. The seller of currencies will sell to through the clearinghouse, and they will patch the currency as a smart contract. Alice sells her Bitcoin through Carol, and Bob receives it through Carol. This does require a degree of trust as the clearing house will be required to release the exact amount that the buyer has requested. If not there is a penalty that can result in funds being locked in the clearinghouse exchange contract. What incentivizes users to be a clearinghouse is that they can also charge a fee for the use of their clearing house. However, their is more information that will be later released by OmiseGo about this particular decentralized exchange project in the near future.

Team of Advisors

One of the major factors that drew the most attention was the team that is behind this entire project and its advisors. To start with some of the big names you have Julian Zawistowski, the founder of Golem, which is a decentralized sharing economy of computing power that allows a user to ‘rent’ their computing power. Joseph Poon, Lightning Network co-Author. Co-founder of Ethereum, Dr. Gavin Wood, and founder of Ethereum Vitalik Buterin. You also have CEO of bitcoin.com, Roger Ver who has been a very prominent figure in the crypto space in his push for the Bitcoin Cash fork.

Current Outlook

OmiseGo is partnering with McDonald’s Thailand in around 240 locations to test out the payment system. As we know fast-food is a fast-paced industry and it is a perfect starting point to test the technology and see where they can make improvements. They are also working with the Alipay as a backend, which allows them to process the payments with Alipay and using the blockchain for the security and operaitons. The current price is at $6.52 and is up %7.22 as of Nov 2, 2017. What makes this company unique is that it does drop news and then have a parabolic spike in price, and the team is being very careful with this especially because they need solid information to provide the ecosystem backing OmiseGo. However, if we are talking about investing, OmiseGo is definitely one to look into but for the long-term. There are stages it needs to pass, including more signings, use cases, and collaborations other than McDonalds and Alipay.

Author – Afolabi Thomas

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