Before we start on what OmiseGO or OMG Network has been known since 1 June 2020, let’s look at some basic concepts, like fiat currency, cryptocurrency, decentralized finance (DeFi), and smart contracts.
Fiat currency: It is simply a government-issued currency that can be used as money and not backed by a commodity such as gold. Most currencies in the world, such as the US dollar, the Indian rupee, the British pound, the Euro, are fiat currencies. Because a commodity does not back these currencies, it does not have any intrinsic value other than what the issuing government assigns. Alternatively, its value is agreed upon by the parties engaging in its exchange.
Cryptocurrency: It is a digital asset (coin) that runs on its own blockchain. Examples include Bitcoin, which runs on the Bitcoin blockchain and Ether, which runs on the Ethereum blockchain. Cryptocurrencies can be used as currency to pay for products or services.
DeFi: It is a financial system that uses cryptocurrencies and blockchain technology to manage financial transactions. The name comes from the decentralized nature of blockchains and peer-to-peer transactions, replacing central institutions such as banks and other financial institutions.
Smart contracts: These are contracts written in code and stored on the blockchain. The code determines how and when the contract is to be carried out. Because it is on the blockchain, it is entirely transparent, trackable, and irreversible. These contracts remove a central authority like a legal system or regulator from the equation entirely.
OMG Network is a decentralized payment platform on the Ethereum blockchain that allows trading altcoin (any cryptocurrency other than Bitcoin) or fiat currencies across blockchains. In short, you are not limited to trading assets on their native blockchains alone.
The network was created as a solution to the problem of Ethereum’s scalability, i.e., how a platform can adapt to process increasingly large amounts of user traffic. As Ethereum transactions began to increase, it resulted in soaring transaction fees and congestion on the network. OMG Network uses a protocol called Plasma to scale up transactions.
The network is currency agnostic. That is, whether you are converting Ether (ETH) to USD or ETH to Bitcoin (BTC), there is just one fee (tiny) for a transaction.
It has three core components:
Decentralized exchange: This is the defining blockchain characteristic that allows all transactions to be transparent and irreversible.
Proof-of-stake consensus: All transactions passing through the OMG Network are validated by a proof-of-stake agreement, i.e., a consensus among users using OMG tokens to vote on the validity of blocks in the blockchain. All OMG Network users have the chance to stake their OMG tokens to validate blocks on the network. They are, in turn, rewarded with transaction fees from the block they validate – an amount proportional to staked tokens. If a bad actor stakes their tokens on invalid blocks, they are penalized by either losing all their staked tokens (called hard slashing) or losing any returns they might make (soft slashing).
Software Development Kit (SDK): OMG Network provides users with the SDK – a set of software tools that developers can use to create user-friendly eWallets. This SDK also allows developers to ensure all aspects of a transaction – account credit and debit, deposits, withdrawals, converting fiat currency to crypto, and so on.
The OMG Network’s OMG coin is a white-label eWallet. An eWallet is software that has the information required to access digital money.
A white-label product is a product that can then have any brand put on it. For instance, a garment manufacturer in China might produce a million white t-shirts, which is then bought by brands like Lee or Nike and such, who then slap their brand on it and sell them as branded Lee or Nike t-shirts.
It allows users to transfer coins from one blockchain to another without going through an exchange. Also, users can transfer assets between blockchains and traditional payment providers, such as VISA or SWIFT.
One OMG to INR is valued at Rs.600.
Buying OMG Coin in India
You can buy OMG Coin on Indian crypto exchanges such as CoinSwitch Kuber.
BuyUCoin advertises itself as “India’s most secure, dedicated, user-friendly, and trusted digital exchange… it follows payment industry best practices with strict KYC-AML policies…” Bitbns talks about its intuitive user interface and straightforward transaction handling.
Whatever platform you choose, please remember that these assets are highly volatile, and an expert who claims to predict its price over the long term is lying to you. Do your due diligence.