So, now that you know about popular cryptocurrencies like Bitcoin and Ethereum, you want to know about newer, smaller projects like Ontology and what to learn about the Ontology coin? Well, you’ve come to the right place!
In this complete Ontology coin guide, I am going to tell you everything you need to know. By the end of reading it, you should feel confident in answering the question, ‘What is Ontology?’ if anyone is to ask you-you will know the ins and outs of the project, its pros and cons, and the team behind it.
(By the way, did you know that there was no Ontology ICO and that they actually gave away lots of tokens for free? Well, you do now!)
First, I am going to give you an overview of how Ontology started and what its purpose is. After that, I am then going to explain how the technology works in a really simple way.
I am also going to cover things such as its real-world usage, as well as its security features. So, what are you waiting for? Let’s start by finding out what the Ontology token actually is!
Table of Contents
What is Ontology?
Ontology was created in 2017 by a Chinese company called OnChain, which is led by founders Erik Zhang and Da HongFei. OnChain has had huge success in the cryptocurrency industry, as they were also the founders behind the NEO blockchain, which is now a multi-billion dollar project.
Essentially, Ontology was created as a way for businesses of all sizes to install blockchain technology within their company, without having to completely change all of their current systems.
Even better, the team behind Ontology wanted to make it a really, really simple process, making it perfect for businesses who have no knowledge of blockchain technology.
One of the most interesting things about the start of the Ontology coin journey is that they did not hold an Ontology ICO. Instead, Ontology airdropped (which means the transfer for free) their coins to a variety of people, including NEO coin holders and those who subscribed to the Ontology email newsletter! They also received funds from private investors.
Note: An ICO stands for Initial Coin Offering and is a way for new crypto projects to raise funds. One of the largest ICO’s of all time was the EOS coin, which raised more than $4 billion!
As they were both created by the same company, Ontology is working alongside NEO to bring blockchain to the world of business. The technology will also support decentralized applications (dApps), meaning they are in direct competition with Ethereum.
So, now that you know how the project started, the next part of my Ontology coin guide is going to look at how it can be used.
How Can Ontology Be Used?
Understanding just what the Ontology coin was created for can be quite a difficult task, so I thought it would be best to start with a real-world example. Think about your own medical records that are held at your local doctor’s surgery.
Every time you have an appointment, the doctor will make notes about what your illness was and then what he recommended (such as the medicine he prescribed). Your notes will also contain information such as any allergies you have and any regular medication that you take.
But what happens if you go to a doctor in a different city, a hospital or your local pharmacy? These individual centers might not have access to your records without requesting permission from your doctor first. Why? Well, there are two main reasons.
Data protection laws do not allow your private information to be shared with anyone who asks for it. Secondly, each individual organization will have its own centralized systems, which makes it difficult to share information anyway.
However, this is where the Ontology project can solve these issues. Using the same example as above, your medical records could be placed on the Ontology network, which then connects it to other blockchain systems such as NEO. Even though all of the organizations within the supply chain can be connected to the same blockchain, they can each decide what information to share.
While all the hospitals in your home country might have complete access to your medical records, the pharmacy might only have permission for basic information such as your identity. In the blockchain industry, this is called “Permission Access”.
This is completely different from other blockchains such as Ethereum, as not only is information posted to the public ledger for all to see, but their blockchain is also open-sourced. Ultimately, this wouldn’t be ideal for businesses who need to keep certain information private. This is what Ontology was created for.
So now that you know the real-world purpose of the project, the next part of my guide is going to look at the Ontology token in more detail.
The Ontology Coin in More Detail
To make things even more complicated for you, I am now going to tell you how Ontology will eventually have two different cryptocurrencies! The main coin is the Ontology coin, which is sometimes called ONT for short.
In total, there will be 1 billion ONT coins and no more will be created after this amount is reached. As the ONT crypto is still in its early days, it is currently a NEP-5 token that is compatible with the NEO blockchain.
This is similar to ERC-20 tokens, which are only compatible with the Ethereum blockchain. Once the Ontology MainNet launch takes place, the ONT token will then be swapped over for a new coin that is unique to the Ontology blockchain.
Once the MainNet launch happens, there will be a second cryptocurrency called Ontology Gas (ONG), making Ontology a dual-token platform. The purpose of ONG is similar to NEO’s GAS token, which essentially allows people to earn transaction fees when they help keep the blockchain operational.
So now that you know about the two-token system, the next part of my Ontology coin guide is going to look at how transactions work.
How Do Transactions Work?
The purpose of the Ontology framework is that it is not intended to operate as a single blockchain. Instead, the technology will allow businesses to make full use of both private and public blockchain. Let me explain this in more detail.
A financial institution will not want to put all of their data on a public blockchain as it will allow their competitors to access all of their information. In this sense, they will install the Ontology blockchain, which is a private blockchain only accessible by the financial institution, or anyone else that they choose to share permission with.
However, there might be certain information that they do want to make public, such as the ability for people to verify their identity. So, if a new customer wants to open an account with the financial institution and then they want to verify their identity, the public blockchain (such as NEO) can then communicate with the private blockchain (Ontology), which is where the private information is stored.
Therefore, Ontology acts as a bridge between the digital world and the real world, all in a trust-less environment. But how do you know that the information can be trusted? Well, like all other blockchains, the Ontology network uses a consensus mechanism.
A consensus mechanism is a way for blockchains to confirm and verify transactions without needing a third party. In other words, it’s what makes the blockchain decentralized. There are lots of different consensus mechanisms that are used by blockchains, with the most popular being Proof-of-Work and Proof-of-Stake.
However, the Ontology token is going to use something it calls VBFT, which combines three different models. These are Proof-of-Stake (PoS), Byzantine Fault Tolerant (BFT) and Verifiable Random Function (VRF).
To make things a bit clearer, let’s compare what VBFT can do in comparison to other blockchains like Bitcoin and Ethereum. Both blockchains use the Proof-of-Work model, which in Bitcoin’s case can verify up to 7 transactions per second and in Ethereum’s, approximately 15. Although still in its early days, it is expected that Ontology will be able to confirm thousands of transactions per second.
Note: Ethereum has plans to upgrade from Proof of Work to Proof of Stake, along with introducing other improvements to further resolve their scalability issues.
So what else is different? Well, the Proof-of-Work consensus model needs more than 50% of all nodes on the network to reach an agreement that the transaction is authentic. However, VBFT only needs 2/3, which allows for cheaper and faster transactions.
Don’t forget, the Ontology crypto network will not only be used for financial transactions but data of all types!
So now you know how the technology works, the next part of my Ontology coin guide is going to look at its potential.
Potential of Ontology?
In terms of real-world usage, the potential of the Ontology network is practically unlimited. This is because the blockchain protocol would benefit all business types – notably because it allows data to be transferred in a secure, transparent, fast and cheap manner.
Not only this, but Ontology will also be able to provide a platform for dApp and smart contracts, which will be supported by the NEO blockchain. Essentially, this opens the doors up to complete automation, meaning that organizations can perform data transactions without needing a third party to verify it.
Remember how I explained earlier that the health care industry would benefit greatly from Ontology? Well, the smart contract feature would make things even more efficient. What if a doctor gave you a weekly prescription that was then posted to the Ontology network?
You could then take it to your local pharmacy and as soon as you collect it, the transaction would be posted to your medical file. Pretty cool, right?!
The value of the Ontology coin has grown extremely quickly since it was released. In fact, it has reached all-time highs of more than a billion dollars, making it one of the most popular cryptocurrency projects in the market. However, its potential to grow further will depend on what partnerships it makes.
In fact, one major partnership within China alone could see the price of the Ontology coin rocket!
On the other hand, Ontology operates in one of the strictest nations in the world when it comes to cryptocurrency – China. It is important to remember that the Chinese government has since put a stop to cryptocurrency trading and ICOs and are now even considering adding mining to that list. If they feel that the Ontology blockchain does not match the ideology of the Chinese government, they could one day put a stop to it.
However, according to the Ontology Twitter page, OnChain was recently in meetings with representatives of the Chinese government, which is definitely a good sign!
So now that you know the potential of the ontology coin, the next part of my guide is going to look at how secure the network is.
Is Ontology Secure?
If you have read my guide up to this point, you should now have a good understanding of what the Ontology project is, what the purpose is and how the technology works. However, it is also important to consider how secure it is.
This is really important as if businesses are to install the Ontology network within their current systems, they need to guarantee that their private data won’t end up in the wrong hands.
Each and every data transaction is confirmed in a decentralized environment, meaning that no single person or authority can take control of the network. As confirmation responsibilities are confirmed by the Ontology community (who hook up their device to the network), a hacker would need to take control of more than half of the devices on the network to have any effect whatsoever! Even then, it’d be so expensive for the hacker to execute their attack that it’d be rendered worthless.
This is much more secure than a regular, centralized system. As in a centralized system, a hack would be much cheaper and require much less effort than it would a decentralized system like the Ontology blockchain. In a centralized system, there is a single point of entry for a hacker. In a decentralized system, there are countless machines (typically spread out throughout the world) that need to be hacked.
To put this into perspective:
If you guessed the password to a computer that has access to a centralized server, you could then edit the documents on that server. However, if you did the same thing on a computer that runs a decentralized server, you wouldn’t be able to edit the documents. You’d need to control more than half of the entire network, not just one computer!
Furthermore, like all other blockchains, every single data transaction that occurs on the Ontology blockchain is immutable — they cannot be removed. This makes it extra secure as it adds a layer of transparency for the company that installs the protocol. Ultimately, the Ontology blockchain is very secure.
How Can it Be Abused?
As the ONT coin has been built from the bottom-up (meaning that it hasn’t been forked from another blockchain), the technology does not have any specific issues that would allow it to be abused. However, there are some important things to remember about cryptocurrencies in general.
When sending or receiving the Ontology crypto (or any other crypto), you do not need to reveal your real-world identity. Instead, the blockchain protocol allows you to send and receive coins anonymously. Although this has its advantages, it can also be abused by criminals who want to commit crimes anonymously.
One such example is the dark web, where websites sell illegal goods in return for cryptocurrencies. Another example is that cryptocurrencies could be ideal for people who want to launder money, as it is very difficult to find out who the real owner of the funds is.
However, these issues are not unique to the ONT token, as these characteristics can be found in all cryptocurrencies.
Advantages and Disadvantages
Before concluding my Ontology coin guide, I thought it would be a good idea to summarize all of the advantages and disadvantages that I have covered!
- Simple entry for businesses: Ontology will be ideal for businesses of all sizes as no prior knowledge of blockchain technology is required.
- Great team: OnChain, the company behind Ontology, have had great success in the blockchain industry already with their NEO project.
- Limitless potential: The number of industry sectors that would benefit from the Ontology coin is endless.
- Unique consensus: The VBFT consensus model used by Ontology is unique, combining both speed and safety. Transactions in the thousands per second are hoped to be possible.
- A bridge between real and virtual: The Ontology blockchain will allow the digital economy to connect with the real-world economy, across multiple blockchains.
- Strict country of origin: Ontology operates in one of the strictest nations for crypto regulation – China.
- Early days: Although the ONT token has great potential, the project is still in its very early days.
And that’s the end of my Ontology coin guide! Although cryptocurrency can be quite complex in general, the Ontology project can be even more difficult to understand as the concept is unique! However, I hope I have cleared everything up for you.
If you read it from start to finish, you should now have a good understanding of what the Ontology coin project is and what they are trying to do. You should also have a good idea of how the technology works, along with its advantages and disadvantages.
So, what do you think about the Ontology crypto project? Do you think it will be a success? I think that it has the potential to go mainstream, as it would be ideal for small-to-medium businesses who do not have the expertise to implement their own blockchain.
However, it’s still early days so we will have to wait and see! I really do like Ontology, though, and I thought it was really cool that they have a bunch of free ONT away.
What’re your thoughts after reading this guide? Let me know in the comments!