OmiseGo (OMG)

Author: Kaloyan Roussev
Date: 2 September 2017

Do not make investment decisions based on this article – read the disclaimer before you proceed and leave the website if you disagree with it.

It is 2 September 2017 today. This review takes into consideration investing in OMG at its current price at $10

Everyone has been raving about OMG for quite some time now. Price is at $10. Is it too late to join the party?

How do I rate an investment in this project at the current price? (TL:DR)

There is no product yet. The market opportunity is great. The company is solid. The competition is fierce. Legality issues waiting around the corner, but being worked on. Price has already risen a lot. Would I invest in OMG? Maybe a small amount, because I am not a fan of investing in anything that is worth more than $2-5, along with TenX so that both can hedge against each other. The price will keep going up, but I don’t think there’s leeway for an exponential growth mid-term, although many disagree – people hyping about prices over $100.

This is yet another coin competing on the payments market. It is a huge market with a lot of competition from both other crypto projects, and classic payment companies, and banks on the other hand. The only way an investor might ensure to come out ahead with a good profit, in the long run, in my opinion, is to divide their investments into several of these coins. I, for one, would buy TenX/OMG in 60:40 ratio. OmiseGo are trying to tap into a particular market and this will give them the competitive edge there, so this increases the odds for success.

What we buy now is a promise. They promise to deliver this product, and they will also try to make this legal. They are in talks with the government, but we don’t know yet what the outcome will be. When we do, it will be too late to buy though, so placing a buy order is a bet of confidence in three things: the mania around OMG hasn’t made the price more expensive than the underlying value; OMG will deliver on their promises; gov will allow for their ideas to become reality.

The main question is this – will the banks (who presumably control the world) allow this to take away from their business? This is not an immediate problem, so in the mid-term there are gains to be made, though.

Project/token summary

Omise is an already operational company that provides white-label solutions for in-app and web payments, with offices in 4 countries in Southeast Asia and backed by 30 million in funding. They are taking things to the next step by introducing OmiseGo.

Focused on Southeast Asia, OmiseGo will provide a decentralized trustless blockchain-backed way for payments. Their core focus will be on remittances (a person working abroad, sending money to their family in their home country), and other kinds of financial transactions between merchants, clients, in fiat and in crypto. This is a 400+ billion market, and they are going to make it very easy for people to send money however they like, with no need to do research on a merchant, and to worry about security, speed or transaction fees. They already have 4 years as a company, 6000 clients and 100+ employees. They could drop OmiseGo on their clients to give it a head start, and I don’t see a reason why their clients wouldn’t use it.

The product is in development yet, so we still have a chance before it gets delivered, and before it becomes widely adopted (if this happens, of course).

This is the best big-picture introductory video on OMG that I found

(btw since he have only so many hours in a day, and lots of ground to cover in crypto, I suggest you guys click the gear icon in the right-hand bottom corner of youtube videos, and set the speed to 1.25 or 1.5x so that you consume the information more quickly)

This guy uses a system similar to mine for evaluating cryptos, and he is being moderate to bearish on OMG in the long term, so I find it imperative to consider his opinion as well:

 

Website: https://omg.omise.co/
Coinmarketcap: https://coinmarketcap.com/assets/omisego/
Exchange: https://bittrex.com/Market/Index?MarketName=BTC-OMG

  • Website: does it look good/presentable – informative, conservative, minimalist
  • Roadmap – in the crowdsale document – https://cdn.omise.co/omg/crowdsaledoc.pdf although it sounds as if it will describe the ICO process, it is actually a very useful presentation of what they do and who they are. Just as important to a potential investor as the whitepaper. Looking at the sheer scale of what they are trying to develop and accomplish, I can see how a roadmap like this cannot be tied down to particular dates with any certainty. However, many investors complain about the lack of dates or time periods in the roadmap – and this might mean that many have withheld from investing? This roadmap is so loaded that it might provide a string of bullish events in the following 2 years for a good long-term hold. That is, of course, if a legal issue or a crypto bubble burst, doesn’t stop all the fun prematurely.
  • Whitepaper – yes, https://cdn.omise.co/omg/whitepaper.pdf it is a very technical read. It has an interesting part on clearing houses and it explains how it will provide liquidity and trust between bitcoin, bitcoin-based, ethereum, ethereum-alike and erc20 blockchains. Written by Joseph Poon, best known as the creator of Lightning Network
  • What is their progress according to the roadmap – Stage 1 incomplete
  • Website: Is the domain name and TLD good – omg.omise.co is the website for the OmiseGo project, and omise.co is the company website. A bit confusing.
  • Website: Is it a quick wordpress template, a 2-hour html job or a custom design with lots of work, money and thought thrown at it – looks custom but not very expensive by any means.
  • What new does this cryptocurrency bring to the world, what problem does it solve, what does it stand for– payment solutions for merchants and end users that will enable fast trustless interaction with almost no fees, liquidity and interoperability between fiat and most cryptos.
  • How does the cryptocurrency name sound (does it sound legit and like a good brand name) – Omise sounds Asian and it suits its purpose. OMG looks too unprofessional and speculative to me, it was a turn-off at first. It is possible that to a certain (probably negligible) degree a percentage of potential investors have withheld from investing because of it? A user on bitcointalks claims otherwise, he thinks the OMG ticker attracts lots of people because it’s fun. I think he might be right.
  • How does the logo look – it is interesting. It is like two intertwining symbols of infinity.
  • Is it a PoW, PoS or PoW/PoS coin, what is the mining difficulty or APR, does it suffer from inflation – It is complicated. The important thing is that there will be no mining (I hate mining). Token holders will hold their tokens in the system which will enable them to process transactions and they will receive fees as an incentive.
  • Who is behind the cryptocurrency – are they shady figures, or have they placed their names and pictures on the website; what is their track record and reputation; do a quick google/github research on them – a very solid and impressive team – the people behind Omise who share decades of experience in the financial, economics and tech industry; the creator of Lightning Network; Vitalik Buterin (needs no introduction); Gavin Wood, and many more. Read a paragraph for each in their crowdsale document.
  • What is the limit on supply of coins in circulation – 140 million
  • Is there a link to the source code – https://github.com/omise
  • When was the last commit made, and how frequent are commits– a day or two ago, for several of their 37 repos. This means they are working hard on delivering their product.
  • How many developers participate in the coding – More than 20
  • What the project survival relies on – the Ethereum platform. Legality. Banks not interfering. Being able to pull its own weight. Being adopted over the competition.
  • Will this project survive a cryptocurrency bubble burst and does/will it have enough of a following that needs it every day – I think it will (with a massive drop in price of course). Omise already have 6000 merchant customers with more than 20 million end users. If OmiseGo gets to them, these people will continue to transact with whatever cryptocurrencies are left after a bubble burst.
  • Competition – TenX looks quite similar, here are a couple of discussions where people compare them – https://www.reddit.com/r/omise_go/comments/6nxbsd/omise_vs_tenx/ and https://www.reddit.com/r/TenX/comments/6sj735/tenx_vs_omisego/ and of course my coworker’s take on TenX. It seems that TenX is focused on buyers (making payments simple) and OmiseGo is focused on merchants, enabling them to accept payments. Here is the most elaborate discussion about the two https://www.reddit.com/r/TenX/comments/6u0jsq/functionality_tenx_pay_vs_omisego_omg/

Exchanges and trading

  • Which exchanges (and how reputable they are) is the coin traded on – they are on almost all exchanges. This has no doubt created a wave of buying and speculative euphoria, which is already factored in the price. Can’t calculate how much of the price is based on inherent value and how much is based on speculation, but I guess it might be inflated at least a little. We would’ve been better off buying a month ago, wouldn’t we.
  • Daily trading volume – $1 million!
  • Market cap – $1 billion! So the ratio of $10/coin to the max supply of 140 mio coins is (ignoring the millions to get a human readable number) 0.07. Compared to TenX, where at $3.50/coin to 205 mio coins, the ratio is 0.017, (all other things being equal) it turns out that TenX has an “unrealized potential” of 4+ compared to OMG (0.07/0.017. I don’t know if such calculations are viable in economics, it is just a thought experiment, so if you have some feedback on this, please share it with me, it is very important that we all learn together.
  • Are there buy (support) or sell (resistance) walls – looks as though presently there is a lot of resistance and price might go down a bit
  • How does the chart look – bullish market having a minor setback, maybe a trend reversal?

Social

  • Is there a Bitcointalk forum Announcement thread – only an unofficial one https://bitcointalk.org/index.php?topic=2023054
  • How many pages is it – 23 pages
  • History of the coin according to the forum and general public impression of the coin throughoutread the first 10, last 5 and several random pages – people are very optimistic about this. They are frustrated about why there wasn’t much more publicity for the ICO. Several users undermining Vitalik’s role as an advisor, saying its a common thing. Predictions that price will go up to $10-15 which a month later happened. This question is asked, that I concur with: “- How are they going to transfer fiat currency on blockchain? How do they put fiat on blockchain and what for? Is it possible at all?” They also discuss news about OmiseGo collaborating with McDonalds in Thailand. More recently, some doubt in the project starts evolving.  There is something incredibly hypey here: https://bitcointalk.org/index.php?topic=2023054.msg21030717#msg21030717 but it also looks very good. McDonalds news confirmed: https://twitter.com/jun_omise/status/902844287557148673 Airdrop on 4 September. Even at $10 people are still excited about it.
  • Do they have a blog, anything interesting on it? – no
  • Is there a slack channel https://omgslack.omise.co/
  • How many members on slack – 8k!
  • Is there a Twitter profile for the cryptocurrency and does it post regular updates, how many followers https://twitter.com/omise_go 36k! followers, very active
  • Is there a Facebook page for the cryptocurrency and does it post regular updates, how many likeshttps://www.facebook.com/OmiseGO/ 3k likes. Posts several times per week

Popularity and perception

 

I am sure I might’ve made some mistakes in this post or in my research. Please, forgive me, if I have, and contact me to tell me where I went wrong. It takes about 4-5 hours of my time to do a full research on a cryptocurrency, and I try to do at least 4 per week.

 


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