Glossary

OMG / OmiseGO / Omise

OMG

OMG is both the name of the network, and the ticker of the ERC 20 token that will be used to secure the network.

OmiseGO

OmiseGO is an incorporated entity, subsidiary of Omise Holdings, and has been created by raising funds through a public token sale in June 2017. It is pronounced oh-mee-say-go.

Omise

Omise is a leading online payment gateway service provider operating in Southeast Asia.

WARNING

Please note: the OMG Network is not owned by any single one party. Instead, it is an open distributed network that is 100% public. It is not to be mistaken with OmiseGO, which is a subsidiary of Omise Holdings and has the role of (intially) building and maintaining the network. No single entity will own or control the network.

Decentralized Network

Application Interface

Referring to the open-source eWallet SDK that will allow anyone who needs online asset exchange to connect seamlessly to the OMG Network.

Blockchain

The very first definition of a blockchain reads that it is an (electronic) solution to irreverisbly transfer the right to property without using a third party. Therefore, it can be seen as an electronic form of cash. Four key components of a blockchain: assets, ledger, witnesses and actors.

Cash-in and cash-out touch points

A place where users can deposit or withdraw their asset value or cash (e.g. banking, hardware, retail partners)

Clearinghouse

Financial institution formed to facilitate the exchange (i.e., clearance) of payments, securities, or derivatives transactions.

Currency-agnostic asset transfer

The ability to transfer currencies in an interoperable network, that means, multiple currencies and tokens can be exchanged and swapped within the same network, without having to leave the network. The network is not limited to one single currency.

Ethereum

Open-source, public, blockchain-based distributed computing platform and operating system featuring smart contract (scripting) functionality.[3] It supports a modified version of Nakamoto consensus via transaction-based state transitions.

Ether (ETH)

The primary internal cryptographic token of the Ethereum network. Ether can be used to pay transaction and computation fees for Ethereum transactions.

ERC20

Technical standard used for smart contracts on the Ethereum blockchain for implementing tokens. The clear majority of tokens issued on the Ethereum blockchain are ERC-20 compliant.

Fees (or transaction fee)

Serve as an incentive to validators to enforce consensus across the network

OMG token

First and foremost a staking token. By holding OMG tokens, users gain the right to take an active role by running validator nodes on OMG's Proof of Stake network, using their tokens as a security deposit. Returns may be paid out in any currency, including but not limited to OMG.

Off-Chain

Off-chain transactions are transactions that are handled outside of the root blockchain using methods such as Plasma or Lightning Network. Transactions off-chain are usually instantaneous, because they don't need to wait for the root chain network validation. They are usually also a lot cheaper. Off-chain transactions are to be secured by the root chain.

On-Chain

On-chain transactions are transactions that alter the state of the root blockchain. The transactions is recorded on a block and then dispersed to the entire blockchain network. They may take longer than off-chain transactions because the validation needs to happen on the root blockchain network, which has often a limited number of transactions per second. Also it can come with a higher transaction cost.

Penalty

A penalty in Proof-of-Stake (PoS) can take the form of either hard slashing (loss of all staked tokens) or soft slashing (loss of returns)

Plasma

Plasma is a framework for building scalable applications. It is a way of building scalable decentralized applications that don’t sacrifice security for speed.

Point of Sales (POS)

A point of purchase where customers execute payments for goods or services.

Proof of Authority (PoA)

Proof-of-authority (PoA) is a consensus algorithm that delivers comparatively fast transactions through a consensus mechanism based on identity as a stake. Proof of Authority (PoA) is a modified form of Proof of Stake (PoS) where instead of stake with the monetary value, a validator’s identity performs the role of stake.

Proof of Work (PoW)

Proof of Work is a consensus algorithm which makes sure that all transactions on the network are validated by achieving consensus from the network. The algorithm is based on so-called 'nonces', which are mathematical (asymetric) puzzles, meaning it is (intentionally) difficult for miners to solve but the correct answer is easily verified by the network. PoW requires miners (validators) to spend an enormous amount of computing power in order to validate a set of transactions.

Proof of Stake (PoS)

Like PoW, Proof of Stake is also a consensus algorithm to validate transactions, however, no mathematical puzzles are used. Instead, the creator of a new block is chosen in a deterministic way based on their stake. A validator holds a "stake" in the network through a security-deposit. The higher the stake, the more chance the validator is selected. Consensus is reached by votes by the stakeholders, which receive a reward (fee) if they voted correctly.

SDK

Software Development Kit. The OMG open-source, white-label SDK will be free for anyone to use and will make it easy for those who need online asset exchange as part of their business to connect seamlessly to the OMG Network. The SDK allows wallet providers the flexibility to enhance, add, and customize payment solutions for many use cases.

Settlement Proof

In the context of cryptocurrency, a settlement proof is a proof that a trade has been settled.

Slashing condition

A condition which, if triggered by a validator, causes the validator's deposit to be destroyed.

Staking

Staking a token means bounding a token which means it is locked up in a smart contract for a specific period of time in order to help making the network secure (because your bounded tokens can be used for validating transactions). In return for the risk you take as a "staker" (locking tokens up and vouching for the network), the "staker" returns tokens or fees from the network.

Stake

Bonded tokens are “at stake” or at risk. Often times bonded tokens are called stake.

Wallet (or digital wallet)

Digital solution or service that allows an individual to make electronic transactions online.

White-label

A white label product is a product or service produced by one company (the producer) that other companies (the marketers) rebrand to make it appear as if they had made it

Plasma Scalability

Bonding

Bonding stake means you deposit some money into the network, and in some sense use it as a collateral to vouch for a block. Think of bonding as committing to the network long term. When you bond, your tokens are locked in for some period. In return, you earn tokens or fees from the network, growing your total ownership in the network. People who do not bond will have easy access to their tokens and liquidity, but their ownership in the network will decrease as new tokens are released that they won’t receive. While people who bond will give up immediate liquidity in exchange for growing their ownership in the network, and helping to make the network high quality and secure.

Challenges

An assert/challenge construction allows one to assert a particular state is correct. By having this assert/challenge-proof construction, interested participants can be able to assert ground truths to non-interested participants on the root blockchain.

Child chain

A Plamsa chain is often referred to as a child chain. A child chain is not to be mistaken with a sidechain. The core difference is that sidechains are ultimately reliant on their own consensus mechanism for security, whereas plasma chains are backed by the security of the main chain.

Exit

Plasma applications make use of state commitments whenever a user wants to leave the plasma chain. We usually refer to this as “exiting” the application.

Fungible token (FT)

Cryptographic tokens whose individual units are essentially interchangeable. Bitcoin, ether and many other network or utility tokens are fungible in nature.

Non-fungible token (NFT)

Special type of cryptographic token which represents something unique; non-fungible tokens are thus not interchangeable. This is in contrast to cryptocurrencies like bitcoin, and many network or utility tokens that are fungible in nature.

Off-chain Execution

Plasma applications do a majority of their work outside of the “root chain” (e.g. Ethereum). Root chains tend to be slow and costly because they need to be very secure. If an application can do any work outside of the root blockchain, it should.

Parent chain (or main chain / root chain)

Smart contracts are created on the Ethereum main chain that act as the “root” of the Plasma child chains.

Plasma

Plasma is a framework for building scalable applications.

Plasma MVP

Minimal Viable Plasma is a design for an extremely simple UTXO-based plasma chain. It relies on confirmation signatures because withdrawals are processed in order based on the position of the output being withdrawn.

Plasma MoreVP

More Viable Plasma, also known as MoreVP, is an extension to Minimal Viable Plasma that removes the need for confirmation signatures. MoreVP modifies the process through which users can withdraw their funds. The ordering of each withdrawal becomes based on the position of the youngest input to the transaction that created an output.

Plasma Cash

Plasma Cash is a plasma design primarily built for storing and transferring non-fungible tokens. Plasma Cash was originally designed to address the mass exit problem in Plasma MVP. The design of Plasma Cash ensures that user funds are always safe, even if the consensus mechanism misbehaves.

Plasma Debit

Plasma Debit is like Plasma Cash, except every token is a payment channel between the user and the chain operator. It’s sort of like a big Lightning hub, but the channels can be transferred just like a Plasma Cash token. Because of the way it makes use of payment channels, Plasma Debit is more suited for single operators than for lots of validators.

Plasma XT

Introduces checkpointing from the plasma chain to the root chain, which allows for periodic finalization of a coin’s ownership in order to reduce the amount of data which must be stored and verified by each user to limit the storage and computation requirements per coin.

Signature

In blockchain transactions, a signature is included in a message based on the sender's private key, so that the recipient can verify the transaction using the sender's public key (see assymmetric encryption).

State commitment

Because Plasma is working off-chain, there is a need to make sure that changes are final. This is why Plasma makes uses of so-called “state commitments.” A state commitment is a cryptographic way to store a compressed version of the state of your application.

State updates

A kind of evidence that proves the current state of a chain

Unbounding

If you have bonded your token, and you would like to withdraw, then you can do so, but you have to wait some period of time before being able to unbond and withdraw (possibly weeks or months), they are necessarily aligned with the long term success and usefulness of the network.

UTXO

Unspent Transaction Output that can be spent as an input in a new transaction. Bitcoin is the most famous example of a cryptocurrency that uses the UTXO model. The requirement exists that only unspent outputs may be used in further transactions to prevent double spending and fraud. For this reason, inputs on a blockchain are deleted when a transaction occurs, whilst at the same time, outputs are created in the form of UTXOs. These unspent transaction outputs may be used (by the holders of private keys; for example, persons with cryptocurrency wallets) for the purpose of future transactions. Plasma MVP is an example of a simple UTXO-based plasma chain.

Network Lifecycle

The OmiseGO team is working in several milestones to deliver a first release of the OMG Network to the community.

Honte

Early 2018, OmiseGO have been working closely with the Tendermint team in developing their Honte milestone. Honte was meant to be a Tendermint chain with staking and sufficient transaction throughput to support the initial implementation of the OMG DEX. Once Plasma reached an equivalent stage of development, they would shift from Tendermint onto Plasma. The development was diverted to Cosmos though and OmiseGO immediately moved on working on Tesusji Plasma.

Tesuji Plasma

The first iteration of OmiseGO plasma-based implementation. The design is based on Minimal Viable Plasma. The repo for Tesuji Plasma, basis of the first release, was made open-source on August 23, 2018.

Aji

Aji (cash in/cash out support and access points) is considered a separate milestone as it is not only a question of product design and development but requires collaboration with implementers, partners and Omise’s existing front-end operations. The Aji milestone will bring cash-in/cash-out functionalities via the ewallet SDK plugin. Users will be able to withdraw and deposit fiat in the form of cash, debit or credit to and from their wallets. The Omise Payment Gateway can support debit or credit transactions for partners that have built a wallet using the SDK library.

Tengen

The Tengen milestone is the "end game" milestone when the OMG network will be able to support sufficient transactions per second to compete with traditional financial services, have a decentralized exchange with cash-in/cash-out capabilities and interoperability with different blockchains. In the Tengen development phase, Tesuji will be deployed on the finished OMG network: a massively-scalable, cross-chain-compatible decentralized exchange (DEx) Plasma chain.

Specific milestones for the Application Interface (eWallet SDK):

Fueski

Fuseki (eWallet SDK beta) was delivered in Q1 2018 and was the first step to onboard users: a working eWallet SDK with basic functionalities. It includes a server and client SDK for eWallet providers, a local database ledger that may be used to issue and make transactions using tokens, and a working demo of a mobile shopping application created using the SDK.

Sente

Sente (eWallet SDK 1.0 release) means that the SDK will be considered production ready, meaning wallet providers can begin to build functional apps with it although there will be a continuation of addding features which will allow wallet providers the flexibility to enhance, add, and customize payment solutions for any number of emerging use cases.

Ecosystem

Bitfish

Bitfish is a staking project that’s creating a platform for people to stake their crypto. Founding members are Chun Wang, co-founder of F2Pool, David Knott, a research scientist for OmiseGO, and Mia Liu.

build.OMG

build.OMG is a community bounty program to contribute to the OMG Network

Consensys

ConsenSys is a blockchain software technology company founded by Joseph Lubin based in Brooklyn, New York.

GO.Exchange

GO.Exchange is another subsidiary of Omise Holdings, which is building a crypto to crypto exchange.

LearnPlasma

is a community effort to create learning resources about Plasma. The project was started at the 2018 IC3-Ethereum Crypto Boot Camp at Cornell University. Some notable contributors include Kelvin Fichter (OmiseGO), Marc Barrasso (Cisco), Tony Crowe, Paul Berg (Chronos), Miguel Morales (Lucidity), Parth Gargava (Fidelity Investments) and Eva Beylin (OmiseGO).

OMGPool

OMG Pool is a community-driven staking pool for the OMG token. It was started by a group of enthusiastic developers from the OMG Reddit community and beyond.

Synthetic Minds

Synhetic Minds is a company that is building automated verification and synthesis technology to ensure correctness of smart contracts on Ethereum. The company will audit the OMG Tesuji implementation of Plasma.

Quantstamp

Quantstamp is a company specialized in auditing smart contracts. Quantstamp has audited the Plasma MVP implementation of OMG.

Blockchain (General)

Actor

Actors on blockchain are represented by a (public/private) key pair.

Asset

The value that is being irreverisbly transfered on a blockchain. Both cash and tokens are forms of assets.

Address

representation of a public key belonging to a particular user; for example, the address associated with the private key given above is 0xCD2a3d9F938E13CD947Ec05AbC7FE734Df8DD826. Note that in practice, the address is technically the hash of a public key, but for simplicity it's better to ignore this distinction.

Block

Package of data that contains zero or more transactions, the hash of the previous block ("parent"), and optionally other data. Because each block (except for the initial "genesis block") points to the previous block, the data structure that they form is called a "blockchain".

Consensus

Consensus in blockchains is reached when the participants of the network agree on a particular state. Consensus can be reached via various consensus algorithms, such as Proof-of-Work (PoW), Proof-of-Stake (PoS), Proof-of-Authority (PoA).

Consesus algorithm (or mechanism)

Fault-tolerant mechanism that is used in computer and blockchain systems to achieve the necessary agreement on a single data value or a single state of the network among distributed processes or multi-agent systems. Examples of consensus algorithms are Proof-of-Work (PoW), Proof-of-Stake (PoS), Proof-of-Authority (PoA).

Crypto

Short for cryptocurrency, which is a digital asset designed to work as a medium of exchange.

Bitcoin

Bitcoin is one of the first forms of electronic cash, first released in 2009.

Decentralized network

In a decentralized network, every state change (i.e. every balance and every transaction) is stored on a shared ledger which van be viewed by anyone, so there is no need to trust a central authority or third party.

Distributed

In a distributed system, all of its information is shared with any participant on the network. All participants are considered equal and is able to access all information when needed.

Federation

A federation is a group that serves as an intermediate point between a main chain and one of its sidechains. This group determines when the coins a user has used are locked up and released. The creators of the sidechain can choose the members of the federation.

Fraud proof

a set of data, usually a part of a block plus some extra "witness data" (eg. Merkle branches), that can be used to prove that a given block is invalid.

Fully distributed

A fully distributed system is a distributed system that has a transparent network protocol which gives all participants a high degree of confidence that all information has been made available.

Fungibility

Refer to Fungible tokens (FT) and Non-Fungitble Tokens (NFT) for the explanation.

Ledger

A distributed ledger is any kind of database that is consensually shared and synchronized across a network spread across multiple sites, institutions or geographies. An accounting ledger is an excellent example, but also blockchain networks have ledgers in order to keep record of the state of the network.

Mining

The process of repeatedly aggregating transactions, constructing a block and trying different nonces until a nonce is found that satisfies the proof of work condition. If a miner gets lucky and produces a valid block, they are granted a certain number of coins as a reward as well as all of the transaction fees in the block, and all miners start trying to create a new block containing the hash of the newly generated block as their parent.

Node

Individual server or machine that performs continuous consensus on the validity of a blockchain

Settlement

In the context of cryptocurrency, settlement means that when an investor buys or sells a token or security, the trade is not complete until it has settled. There can be several "settlement agreements" which are the terms and conditions that define the contract for when the trade needs to be settled.

Sidechain

A sidechain is a designation for a blockchain ledger that runs in parallel to a main chain, but can be attached to the primary main chain using a two-way peg. Entries from the primary blockchain can be moved from and to the sidechain. Sidechains are ultimately reliant on their own consensus mechanism for security, and not the main chain. This is a core difference with Plasma chains (or child chain), which are backed by the security of the main chain.

Smart contract

In essence, a smart contract is a set of coded functions. It is a piece of code that directly controls the transfer of digital assets between parties when certain conditions are met. These conditions are agreed between sender and receiver.

State channel

State channels are a general form of payment channels, applying the same idea to any kind of state-altering operation normally performed on a blockchain. Moving these interactions off of the chain without requiring any additional trust can lead to improvements in cost and speed.

Two-way peg

A two-way peg enables interchangeability of assets at a predetermined rate between the a parent blockchain and the sidechain.

Transaction

Digitally signed message authorizing some particular action associated with the blockchain. In a currency, the dominant transaction type is sending currency units or tokens to someone else; in other systems actions like registering domain names, making and fulfilling trade offers and entering into contracts are also valid transaction types.

Trustless

Does not require a third party to verify or manage. Smart contracts are primarily trustless, as they are meant to occur by themselves once the stipulations are met.

Validator

A validator is required to avoid double spending and to give the opportunity to the network to inform all participants about its transactions and to get a consensus from all nodes on the transactions and the order of transactions. In Proof of Stake (POS), validators need to submit a security deposit in order to get included in the validator set.

Witnesses

In the context of blockchains, a witness is a node that witnesses the current state and state transitions of the blockchain. In essence, all nodes that operae on a blockchain are witnesses.

Other

Airdrop

Refers to the free distribution of small amounts of a certain virtual currency tokens to its community members either for free or for performing small tasks.

Asymmetric encryption (or public key encryption)

In assymetric encryption (or public key encryption), there is a process for generating two keys at the same time (typically called a private key and a public key), such that documents encrypted using one key can be decrypted with the other. Generally, as suggested by the name, individuals publish their public keys and keep their private keys to themselves.

Encryption

process by which a message (plaintext) is encoded with a shorter string of data, called a key, to produce an output (ciphertext) which can be decrypted (decoded) back into the original plaintext by someone else who has the key, but which is incomprehensible and computationally infeasible to decrypt for anyone who does not have the key.

Initial Coin Offering (ICO)

Type of funding using cryptocurrencies. A company looking to create a new coin, app, or service launches an ICO. Next, interested investors buy in to the offering, either with fiat currency or with preexisting digital tokens like ether. In exchange for their support, investors receive a new cryptocurrency token specific to the ICO.

Lightning Network

Decentralized "second layer" payment protocol that uses smart contract functionality in the blockchain to enable instant payments on top of an existing blockchain (most commonly Bitcoin).

Liquidity

The degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price.

Open source

Open source software is software with source code that anyone can inspect, modify, and enhance for any purpose. It is usually developed as a public collaboration and made freely available.

P2P (Peer-to-peer)

P2P computing or networking is a distributed application architecture that partitions tasks or workloads between peers. Peers are equally privileged, equipotent participants in the application. They are said to form a peer-to-peer network of nodes.

POC (Proof-of-Concept)

Pre-launche pilot project which demonstrates that a design concept, business proposal, etc. is feasible.

Security deposit

A quantity of ether that a user deposits into a mechanism (often a proof of stake consensus mechanism, though this can also be used for other applications) that a user normally expects to be able to eventually withdraw and recover, but which can be taken away in the event of malfeasance from the user's side.

Symmetric encryption

Encryption methodology that uses a secret key to encrypt (encode) and decrypt (decode) a message (plaintext). It is the oldest and most well-known technique for encryption. The secret key can be a word, a number, or a string of letters.

Solidity

Contract-oriented programming language for writing smart contracts. It is used for implementing smart contracts on various blockchain platforms, such as Ethereum.

Unbanking the Banked

The OMG Network opens up the possibility of a decentralized financial system where being "banked" is not a requirement for world citizenship and financial freedom is not a privilege of the wealthy but a basic right available to anyone. OMG is building infrastructure that will provide unprecedented financial access and sovereignty to people that is unmatched by banks today.

User custody

A user's immediate charge and control over a property, e.g. fund custody

User Experience (UX)

User experience design is the process of enhancing user satisfaction with a product by improving the usability, accessibility, and pleasure provided in the interaction with the product.

Contributed by
pwolf88 Computer scientist & Crypto writer