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How to Buy OmiseGO (OMG): Quick Guide
DISCLAIMER: None of the following is intended to be investment advice. This is only meant to be a description of what has worked well for me so far, and my own opinions. Also, full disclosure, my links to Coinbase, Binance, KuCoin etc., include referrals. It actually benefits you to use them because we will both get an extra $10 worth of BTC for free if you deposit at least $100 to Coinbase. Thanks in advance if you follow the links when you make your accounts - and even if you don’t, I hope you find this article useful! Remember: Always do your own research. This is not financial advice, so do not make any purchases or sales based on the opinions written on this website.
This guide will teach you how to buy OMG from square one (i.e., all you have is fiat money, no cryptos). It will also work for most other cryptocurrencies, but as I’m interested in OMG right now, I am going to write a quick foreword about it and then we’ll get right into the meat of the guide.
A Little About OMG - Why Buy?
There is a massive subset of people who are new to the crypto-space entirely but have only heard of Bitcoin. Then they go online and they search around and figure out there are actually many, many cryptocurrencies out there with many different use cases. OmiseGO’s use case is as simple, but they’ve found a pretty convoluted way of saying it: “Unbanking the Banked.” I’ve found people often get this wrong and think that it’s “bank the unbanked” - i.e., provide a form of banking services to those in impoverished countries, those with terrible credit, and so on. That’s sort of what OmiseGO is doing, but it doesn’t tell the whole story.
What does it mean to “Unbank the Banked”?
There is a huge problem with money and banking in the modern world. Starting with Bitcoin, one could argue that cryptocurrency was largely invented for the sole purposes of solving this problem.
Fiat money is basically worthless; the US dollar, for example, is backed by absolutely nothing other than the power of the US government. One could say the same thing about cryptocurrencies, but there’s one key difference: it takes money and time to transfer money.
Before the current scaling issues that Bitcoin is experiencing, it was touted as a fast, inexpensive way to send money from anywhere in the world. The example I used to give my friends way back in 2014 was that of an immigrant who came to America from a faraway, relatively impoverished country like Thailand. That man might want to send money back to his family on a regular basis, but if he uses a traditional service like Western Union, a tremendous chunk of that money is going to get eaten by parasitic middlemen. International wire transfers, ACH, and so on at an actual bank usually aren’t much better - and besides, many people simply do not have access to banking services like that for a variety of reasons. You’ve effectively “banked the unbanked” if they’re now able to send cryptocurrency instantly and almost entirely without fees.
OmiseGO wants to venture one step further. This cryptocurrency seeks to “unbank the banked” - that is, remove the need for parasitic middlemen like bankers entirely. Blind trust in third parties has lead to some of the greatest financial disasters in history, especially in the crypto world (look no further than Mt. Gox if you don’t believe me). The long story short is that OmiseGO will support a decentralized exchange built into its a proof of stake blockchain. For now, OMG does not have its own blockchain - it is an ERC-20 token. More on this later.
I have previously written about another coin called AirSwap which also seeks to function as a decentralized exchange. The difference is that AirSwap will only support ERC-20 tokens - OmiseGO is intended to go many steps further, allowing for a decentralized exchange which supports almost any crypto-to-crypto swap. This means that, sooner or later, you might be able to use the exchange built on top of OMG to exchange Bitcoin and Ether, or almost anything else you could imagine. Perhaps most importantly, it intends to allow for the trade of fiat currencies for cryptocurrencies. If we could eliminate these sorts of middlemen in the crypto-world, that would be nothing short of amazing!
A lot of big names are involved with OMG or have had good things to say about it. Vitalik Buterin and Gavin Wood, for example, are the co-founders of Ethereum and they are also supporters of the OmiseGO project. OmiseGO whitepaper was written by Joseph Poon, the same man who is responsible for Lightning Network and Plasma.
When I review coins I always do a price analysis, but I think OMG especially deserves this. Since it is intended to facilitate such a robust decentralized exchange, there’s no question in my mind that it will shoot up in value if its goals are accomplished. This is a use-case that the cryptocurrency world desperately needs. Imagine how many millions of dollars in trading fees that people would be able to keep in their pockets!
With that said, let’s compare OmiseGO to Ripple. At the time of this writing, XRP is ranked #3 on coinmarketcap with a market capitalization of $52,358,275,858. If OMG had XRP’s current market cap, it would be worth about $515 per OMG. That’s around 32 times the current price (about $16)! Sound crazy? I don’t think so. If OMG actually pulls off a truly robust, reliable, fee-less or near fee-less decentralized exchange, it is going to be fulfilling such an important need that I just cannot imagine a world where it’s not a top five coin. Only time will tell, though!
Now that you understand the price situation when it comes to OMG, let’s get into buying some.
Buying OMG: Basic Strategy
To date I’ve had no problems with the following basic strategy:
- Create and sign into a Coinbase account. I recommend Coinbase because they are the most straightforward exchange.
- Purchase some ETH. At the time of this writing, this currency transfers the fastest and cheapest out of anything Coinbase offers. Litecoin competes here, but will cause hiccups later in the process - more on that later.
- Create and sign in to a Binance account. If you are American, Binance is currently not accepting new American clients - use KuCoin instead. I recommend Binance because they have been reliable and convenient for me and they offer many different lesser-known cryptocurrencies with trading pairs on both ETH and BTC. An added bonus is that you can withdraw up to 2 BTC/day worth of funds with no verification at all.
- Move your ETH to Binance. Once it has confirmed, you can now easily use the ETH/OMG trading pair to buy as much or as little OmiseGO as you want. More on trading pairs later.
- Send your coins from Binance to a safe OMG wallet for long term storage if you intend to hold for awhile. This is not strictly necessary but it is considered a safer option than keeping ANY coin on ANY exchange long term. I personally believe Coinomi to be the safest and most convenient wallet for many cryptocurrencies. Because OMG is an ERC-20 token, this step is a little more complicated than usual - I will give details on this later in the guide. The long story short is that it’s possible, with some effort, to use Coinomi, a Ledger Nano S, or a Trezor to store OMG.
Now, if you’re a power user or someone with some existing familiarity with cryptocurrency, you can probably stop here. The rest of this guide is just going to be a more in-depth description of the preceding steps. If you’re completely new to cryptocurrencies, you might be a little lost - that’s fine! You won’t be by the time you finish this guide. I’ll go step by step:
Starting Out On Coinbase
This is arguably the most trusted exchange currently on the market. You can think of them as the PayPal of the cryptocurrency world, with all the good and bad connotations that come along with that. There are some countries where this is not the case! For example, in Canada, one would probably want to use QuadrigaCX instead. Unfortunately, that’s outside the scope of this guide, but I do have a country-by-country guide which may help you if Coinbase doesn’t work in your area.
All you have to do here is go to Coinbase’s website and create an account. Security is incredibly important here - remember, in cryptocurrencies you are your own bank and so it is absolutely crucial that you follow good security practices. This means your password should be strong - and it should be a password you aren’t using anywhere else (including other exchanges). Google has a pretty good guide with some tips on choosing strong passwords. Keeping security in mind, it would also behoove you to turn on two-factor authentication once your account is created.
Once you are up and running there are a number of options when it comes to actually paying for coins via Coinbase. It is possible to link your bank account to Coinbase but actually transferring coins out of Coinbase will be impossible for a few days while the funds are clearing. This is obviously not ideal if you want to move quickly, as you would now have to wait several days to move your coins to an exchange where you can trade them for OMG (or any other coin).
Instead, I would recommend you link a credit or debit card to Coinbase. This will allow you to purchase some amount of coins immediately, and then immediately send them off wherever you want - your wallet, another exchange, etc. At the time of this writing Coinbase offers three coins: Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC).
What to Buy First?
In my opinion if you intend to buy lesser-known coins like OMG, ETH is the best choice to buy here. Why? Well, with regards to LTC, the reason is clear: other exchanges like Binance offer direct trading pairs for BTC and ETH, but not LTC or any other currency. What this means is that you could directly exchange your ETH for OMG, or your BTC for OMG, but you’d have to perform another step if you wanted to trade your LTC for OMG (and that means more fees!). Obviously we don’t want to waste even one cent if we can avoid it, so LTC is out.
With regards to BTC, at the time of this writing there have been a lot of rumblings about high transaction fees, slow transaction times, etc. Exchanges often overpay these fees as well, and that means that you are again risking missing out on more money than you need to.
ETH is therefore currently the best choice for our purposes by default - fastest transaction speed, lowest transaction cost. So, to review: create a Coinbase account, link your credit or debit card, and purchase ETH.
I Bought ETH: What Now?
Now is the time for you to make your Binance account. Follow the link and create an account using a strong password (this should be different than the one you used for Coinbase!). There are other places where you may be able to buy OMG (Changelly and Kucoin are two reputable examples). There are other reputable exchanges as well, but be careful about using lesser known exchanges - scams do exist! This guide focuses on Binance because my experience there has been 100% positive - I have transferred coins in and out of their system many times with no problems.
After your Binance account is made, click “Funds” at the top right, then “Deposits Withdrawals” beneath it. Find Ethereum in the list and click the “Deposit” button on the far right. You should end up with something that looks like this:
Unlike the picture, there will be an “ETH Deposit Address” listed in the box at the bottom left. This is a very long series of letters and numbers, and is the fundamental basis of most if not all cryptocurrencies. An “address” is simply the destination for funds - think of it like the account and routing numbers at the bottom of your checks. For many cryptocurrencies such as Bitcoin it is possible to have multiple “receiving addresses” which point towards the same wallet.
The address listed here is Binance’s “receiving address” for your Ethereum. To the right of it is a “copy address” button - use it to put the address into your copy/paste buffer. Then, in your Coinbase account, navigate to the Accounts tab and then to your ETH Wallet. Paste in your address. You should double check that the pasted address is the same one you saw on the deposits page in Binance - you can never be too sure when it comes to security! Once you’re sure you’re sending to the right place, input the amount of ETH you’d like to send (if you just want to buy some OMG, you should send all of it) and click “Send.”
Optional Trick: Using GDAX To Save Money On Fees
GDAX, or “The Global Digital Asset Exchange,” is the actual exchange which backs Coinbase. You can use it to save a lot of money on fees if you’re willing to spend a few extra minutes getting verified. Follow this link and click “DEPOSIT.” Click “Coinbase Account” at the top and deposit all your ETH from Coinbase into GDAX.
Once you’ve done this, you can click “WITHDRAW” in GDAX and send your funds from GDAX to Binance. Fees are significantly reduced with this method!
I Sent ETH to Binance - Now What?
Once you click Send, you will need to wait a little while. Without getting too technical about it, exchanges want to be as secure as possible. Thus, when you make a deposit, they wait for multiple “confirmations” from the network before allowing you access to your funds. You can view the progress in your Binance account by clicking Funds and then History. Do not be alarmed if nothing shows up at first! There are many reasons there might be a slight delay. In general you should see the transaction show up within a few minutes, with the current number of “confirmations” next to the number of required “confirmations” next to it. Be patient - your OMG is nearly in hand!
Once you have the required number of confirmations, it’s time to trade your ETH to OMG. This is blessedly simple. In the front page of Binance, click “ETH Markets.” Search for “OMG/ETH” in this list, and click it. Now you are on the trading page. In the bottom left under “Buy OMG”, click “100%” below the “Amount” field.
This indicates to Binance that you’d like to trade all of your ETH for a commensurate amount of OMG for no more than the price listed above. The price field is automatically listed based on the current market. If you like, you can change it to a different price, but like any market it’s not guaranteed that someone will buy at the price you’d like. Your order will remain open until it’s been fully filled or you cancel it. There are several options here such as Stop-Limit orders, etc., but this is outside the scope of this guide. In this case, you are simply placing a “Limit” order for some OMG.
I Placed My Order! Am I Done?
If you want to be done now, you can be - but there are more steps if you want to be security-conscious. You may want to check under the “Orders” and “Order History” tabs that the order went through - if you placed a Limit order at the default price, it probably did. Once you have your OMG in your Binance account, you can see them under “Funds” → “Deposits Withdrawals.” You can click “Hide 0 Balances” at the top to clean up the screen of coins you don’t own, and you can see an estimate of the overall converted BTC and USD value of your account at the top right.
For maximum security, I wouldn’t leave your coins in the exchange. I like and trust Binance, but ANY site can be hacked or experience downtime - even massively established trusted sites like PayPal. You want to have full control of your coins.
How Do I Move My Coins to a Private Wallet?
In Binance, go into the “Deposits & Withdrawals” tab, then click “Withdrawal” to the far right of the “OMG” row. By now it should be clear what you’re looking at - fields that let you input the address to send the coins to, and how many coins to send. For your convenience, there is a “Max” button to the right of the Amount field. Note that once you click “Submit,” you will need to use your two-factor authentication via Google Authenticator, an Android app. I recommend you do not use your actual day-to-day phone for this purpose. These days you can get an inexpensive Android phone for around 30 dollars - this is an investment worth making for security purposes. You can keep the battery removed from the phone when you’re not using it, and connect it to a network only for cryptocurrency purposes. As a bonus, if you’d like, you can use this phone for the Coinomi wallet.
It is possible to get OMG working in Coinomi right now and the process is fairly straightforward. In my opinion this is the preferred method, especially if you’re willing to buy an Android phone solely for cryptocurrency use. However, if you’d prefer to use a desktop wallet, I have written an easy-to-follow comprehensive guide which walks you through how to use MetaMask and MyEtherWallet to store any ERC-20 token, including OMG.
One more thing about ERC-20 tokens: I understand it is possible to use a hardware wallet like the Ledger Nano S or Trezor to store them. I have not yet tried this myself, but I imagine it’s not that difficult - apparently all you do is plug in your hardware wallet and have it interface with MyEtherWallet in the place of MetaMask. If you’re confused by all this and want to know more, just check out my guide on the subject. Hardware wallets are probably the most secure option available, though they are also a somewhat pricier solution.
Be advised that the information here only scratches the surface on OmiseGO and cryptocurrencies in general. I recommend you read as much as possible. Cryptocurrencies are the future, and if you’re reading this guide you are already lightyears ahead of the curve.
Come back soon because more content like this is always coming! If my work helped you or gave you something to think about, share it with others:
Sharing helps more people find my articles, and I’d love to be able to assist as many people as possible with cryptocurrencies. Also, if you have any ideas for future articles or specific questions, I’d love to hear them. One last thing: if you’d like to chat with me in real time, check out my Discord!
Posted: Jan 24, 2018
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