Why do we need OMG?

Last updated 4 months ago

Please note: the OMG Network is still in development, and some details cannot yet be included. This knowledge base will be revised regularly to include updates and additional details.

Why do we need OMG?

Ultimately, blockchain solves one problem—the problem: coordination.

The central paradox of human society is that we need to conduct transactions on a mass scale to accomplish our ends, but are simultaneously unwilling to trust anyone outside our immediate circle.

Throughout history, societies have tried to circumvent this problem by constructing various ever-more-elaborate mechanisms, all of which still rely on trust at some level: governments, banks, clearinghouses, arbitrators and the legal system are all institutions that we have little choice but to trust with our money, our identities, our histories and our futures. There is no guarantee that they will be competent enough to secure those things adequately; no guarantee that they will act honestly or responsibly; no guarantee that the rules of the game will not change without warning; and taken to the extreme, no guarantee that these institutions will continue to exist at all.

Applying this to the current financial system, assets such as currencies are locked up in a messy web of indirect ownership and delayed settlement. Transferring assets from one party to another often requires point-to-point interaction between multiple intermediaries, and reconciliation of duplicated ledgers held by multiple parties. Even between these parties there is a lack of trust, leading to a proliferation of convoluted systems designed to protect financial institutions from each other and themselves—and paid for by the consumer.

Blockchains allow us to create a single shared ledger, or an interoperable network of provably coordinated ledgers, on which ownership and status of an asset can be immutably recorded. We aim to create such a ledger on a global scale, by constructing a lightweight and highly scalable and secure blockchain which directly integrates with the Ethereum blockchain and Ethereum smart contracts.