With the blockchain technology conquering newer niches, banking and financial services ought to get upgraded. With this aim, Omise, a successful online payment solution company has introduced a blockchain technology-based project name OmiseGO. Here’s what it is and what loopholes in the banking and finance sector, it is aimed at filling.
Problem with the traditional system
For every small thing you shop for and for the smallest transaction that you make, there’s a network that facilitates them all. There’s a list of tasks that this network carries out including value collection, and reassignment of the value in some other form and so on.
At the global scale, networks such as CHIPS, ACH, and FedWire function as “financial hubs” and essential carry out brokering of transactions. It’s quite understandable that when it comes to international transactions, safety and efficiency of the mode becomes critical. Undoubtedly, these networks are the best of their kinds but then they aren’t completely resistant to frauds. Moreover, tight regulations make them slow and increase their cost.
This is the path of traditional nationwide check processing system. OmiseGO proposes to establish a sustainable coordination amongst “the payment processors, gateways, and financial institutions” so as to eliminate the disruptions that add on to the cost and processing time.
OmiseGO is a project that aims at enabling transactions without involving the third party such as a bank. We do transactions every day but then there’s some “centralized body” that executes them and keep a record. At times, this involves cost and demands time. With OmiseGO, you don’t really need a bank account to make transactions. Mere connection to the blockchain would do the needful. Consequently, this will save huge cost and time on every deal you’ll make. As per the official website,
“QMiseGO will be made available to everyone via the OmiseGO network and digital wallet framework, starting in Q4 2017”
The working hands behind OmiseGO
This ambitious project is the fruit of continuous efforts put together by some of the best players of the domain. It’s worth noticing that within a short span of time, the team has made quite an appreciable progress.
OmiseGO has its roots with Omise, a Thailand based company that provide payment system related solutions to enterprises. Omise has been functional since 2013 and presently, they operate in Southeast Asia. In these four years, the company has assembled an efficient team, built “name” in their sector through smart business relationships, produced viable products and secured funds worth 20 million. And now, it’s the project OmiseGO that is being worked upon to rock the show!
Omise in itself is an example of a perfect team that has designers, engineers and business developers. As far as the project OmiseGO is concerned, not much has been disclosed. However, Vitalik Buterin (Ethereum) and Joseph Poon (Lightning Network Co-Author) are known to be the project advisers. In fact, the latter has been credited as the author of the OmiseGO White paper
Here’s what Jun, the founder, and CEO, Omise has to say [youtube https://www.youtube.com/watch?v=neCaG0LoKQ0]
The developers propose this technology to offer following:
- Access – No bank accounts will be needed to make transactions
- Scalability – The cost would cut down since no third party or middleman would be involved and the settlements would be “instant”, unlike the present ones that often consume time.
- Security – When it comes to trade, security is the priority and OmiseGO knows how to take care of this element. It proposes decentralized currencies and flat token custody to ensure that the system is secure and private yet transparent enough to eliminate the need for a bank.
With Ethereum connected network, users will be able to make any and every type of financial transaction from B2B commerce to trading inexpensively.
How does Omisego work?
Digital wallets are the core of the OmiseGO project. These wallets may represent any asset from reward points that you earn while online shopping, to the digital currency you trade in, to fiat. Proof-of-Stake blockchain, the backbone technology behind this revolutionizing idea will maintain a record corresponding to these wallets.
This blockchain will also be connected to an Ethereum network that will allow the exchange of currencies across these wallets. The network will match the entries and enable smooth trade. So, the whole idea is about setting up a market where matching of orders is done, validated through Ethereum technology-based network and recorded to a blockchain.
As far as “instant transactions” is concerned, the plan is to move the transactions to the side chains once the new transactions are in line. For instance, if the user is proposing to add customer rewards to his wallets and make another transaction too, the minor one can be conducted on the side chains and the main chain can be reserved for the major one so that things don’t pile up. This would cut down on processing time by a noteworthy fraction.
The OmiseGO token
The exclusive OmiseGO blockchain hasn’t been launched yet. Once it is into action, the OMiseGO tokens will become Proof-of-Stake tokens on the network and the owners of these tokens will have the right to validate the respective blocks and earn fees.
Fees associated with OmiseGO tokens
Just like with any other blockchain based system, economic implications apply to the OmiseGO as too. The white paper states:
“Transaction fees are native to the OmiseGO chain. The validators earn fees from validating the activity of this blockchain. Payments and interchange fees are used to pay for activity on this network and to incentivize honest activity. Bonding has a cost, those who bond on behalf of others on this network will likely charge fees, e.g. clearinghouses.”
Altogether, OmiseGO seems to e a revolutionizing idea that has the capacity to add value to the banking and financial services. The roadmap and strategies sound interesting, but the actual success is yet to be unveiled and the growth curve can only be analyzed after the launch.