This is a continuation of the live AMA Stephen, our COO, did with Huobi on 20th August, 2020. Catch Part One on Huobi’s blog.
Q: Can you explain your partnership with Bitfinex and what you hope to achieve with it?
A: Our partnership with Bitfinex addresses blockchain’s scalability issues and drives further growth and adoption of open financial services. The integration of USDt onto the OMG Network will reduce confirmation times, make payments faster, lowers transaction costs, and Ethereum congestion — all at the same level of security as the rootchain.
Q: How will the activation of Tether on the OMG Network combat Ethereum Congestion?
A: Tether accounts for roughly 20% of daily Ethereum transactions that are competing for miners’ computational power and capacity. The migration of Tether (USDt) from Ethereum to OMG Network means the OMG Network will process ERC20 USDt transactions, lowering computational power demand, Ethereum congestion, and gas cost on the rootchain.
Q: What is the consensus algorithm used by OMG Network and why did you choose it?
We use the existing Ethereum root chain as the consensus layer and security guarantee. This is important because users don’t have to trust us as a new cryptographic platform. Users funds are not at risk, and not exposed to any new algorithms.
Q: How does the OMG Network achieve 1/3rd the average transaction cost of the Ethereum Network?
The OMG Network’s plasma Childchain batches multiple transactions into a single block and sends it to the rootchain for confirmation. As long as there are three transactions in a plasma block, it’s cheaper to transfer on the OMG Network. As the OMG Network scales to support thousands of transactions in a single plasma block, we achieve lower cost, both technically and economically.
Q: How is OMG green? Why do you say that they reduce electricity consumption by potentially 99% compared to ETH? How do you get to be so green?
The Proof of Authority (POA) mechanism allows the OMG Network to process more transactions per second, with fewer nodes, while maintaining the security of the Network. These transactions are then batched and submitted to the Ethereum root-chain for validation using Ethereum’s POW consensus. Think of it like a compression algorithm where we combine many thousands of Layer-2 transactions inside a single transaction on the root-chain with the associated energy cost savings.
This allows the transactions on OMG Network to be cheaper and greener, while still benefiting from the resilience of the POW consensus security-level of the Ethereum network.
We’ve been doing our research and will publish a blog with the details. Here’s an excerpt from the write-up that can give you an idea of how green the OMG Network can be:*
- From research, 1.9 million ERC-20 transactions consume 60,032,647 KWh of electrical energy and expend 28,508,095 kgCO2 of carbon emissions on the Ethereum Network.
- Next, consider that the OMG Network has a throughput capacity that is roughly 225x better than the Ethereum Network. Meaning, with other values held constant, transactions on the OMG Network would be 225x more environmentally friendly than transactions on the Ethereum Network. Therefore, we estimate that a single transaction on the OMG Network would cost:
In terms of Electric Energy Consumption:
- Energy footprint / Txn on Ethereum * 1/225 = 31KWh * 1/225 = 0.14KWh
In terms of Carbon Footprint:
- Carbon footprint / Txn on Ethereum * 1/225 = 14.72kgCO2 * 1/225 = 0.07kgCO2
*Disclaimer: The calculation model includes various assumptions such as cost per KW/h and more.
Q: How does the OMG Network support developers?
Q: I’m a developer, and am interested in contributing to OMG. Does OMG have a Bug Bounty to check for vulnerabilities on your platform ?
Great question! As a financial network, security is a core tenet in all our engineering efforts, however, we realize no technology is perfect.
That’s why we’ve have a bug bounty program that allows you to identify and submit vulnerabilities that could negatively impact OMG Network users. Successful submissions have a chance of being eligible for bounty rewards of up to $25,000.
Q: Marketing strategy is very important. A product cannot be called established without marketing and promotion. What’s your plan for this? How will you build a strong relationship with your community?
We’ve always followed the mantra that our work will speak for itself in the marketplace and we’ve gone very light on the marketing — focusing instead on top-notch engineering and solid business development. Now that we’re live on the mainnet, we’re communicating more, pushing out educational material geared towards exchanges and their users. With the increasing costs of gas fees over the past month, the market is searching for relief from Ethereum congestion and we believe we have the answer — as evident by the Bitfinex integration.
As for the community, ours is nearly 300,000 people strong and is a vital part of how we function. We invite you to follow our Telegram, Twitter and Reddit and become an OMG Salamander!
Sign up for our newsletter and we'll let you know about everything important at OMG Network.