So now that you’re familiar with common cryptos like Bitcoin and Ethereum, you want to learn about newer, smaller projects like Ontology and more about the Ontology coin? You came to the right spot!
I will tell you what you need to know in this full Ontology coin guide. You will feel comfortable at the end of reading it when addressing the question, “What is Ontology?” If anyone asks you – you’ll know the project’s ins and outs, the pros and cons and the team behind it.
(Did you remember, by the way, that there was no Ontology ICO and they just gave away loads of free tokens? Well, you do now!)
First, I’ll give you an overview of how Ontology began and what its intention is. I will then explain how the system functions in a very easy way after that.
I will also cover issues like its real-world application, and its security features. What are you waiting for, then? Let’s begin by finding out what the Ontology token really is!
What is Ontology?
Ontology was founded in 2017 by OnChain, a Chinese company which is headed by founders Erik Zhang and Da HongFei. OnChain has had considerable success in the cryptocurrency industry, as they were also the creators of the NEO blockchain, now a multibillion dollar project.
Essentially, Ontology has been developed as a way for companies of all sizes to implement blockchain technology within their company, without having to modify any of their current systems entirely.
Even better, Ontology’s team decided to make it a very easy operation, making it ideal for businesses that don’t have blockchain technology expertise.
Some of the most fascinating things about the beginning of the Ontology coin journey is that they did not hold an Ontology ICO. Rather, Ontology airdropped (meaning the free transfer) their coins to a number of people, including NEO coin holders and those who subscribed to the Ontology email newsletter! They also have received money from private investors.
Note: An ICO stands for Initial Coin Offering and represents a way to collect funds for new crypto ventures. One of the biggest ICO’s ever was the EOS coin which raised over $4 billion!
Since both were developed by the same organization, Ontology works alongside NEO to introduce blockchain into the business world. The platform will also help decentralized applications (dApps) which means they compete directly with Ethereum.
So, now that you know how the project started, the next section of my Ontology coin guide will look at how it might be used.
How Can Ontology Be Used?
It can be quite a daunting task to understand exactly what the Ontology coin was produced for, so I thought it would be better to start with a real-world example. Think of your own medical history kept at the surgery of your doctor.
Each time you have an appointment, the doctor will make notes of what the condition has been, and also what he has recommended (such as the medication he prescribed). The notes should also contain details such as any allergies you might have and any drugs you take daily.
But what happens if you go to a doctor in another state, hospital or pharmacy in your area? Such individual centers may not be able to access your records without first obtaining your doctor’s permission. Why? There are two primary explanations for that.
Data privacy regulations do not require exchange of your personal information with someone who requests it. Second, each company will have its own centralized structures, which will make it hard to exchange information anyway.
Nevertheless, it is here that the Ontology project solves these problems. Your medical records may be put on the Ontology network using the same example as above, which then links it to other blockchain networks such as NEO. Although all entities within the supply chain can be linked to the same blockchain, each of them may determine what information to share.
Although all hospitals will have full access to your medical history in your home country, the pharmacy can only have permission for essential details such as your name. This is called “authorisation control” in the blockchain industry.
This is entirely different from other blockchains like Ethereum, because not only is knowledge for everyone to use added on the public ledger, but their blockchain is also open source. This will not, in the end, be suitable for companies who need to keep those details private. Ontology was established for those reasons.
So now that you know the project’s real-world intent, the next part of my guide will look in more depth into the Ontology token.
The Ontology Coin in More Detail
I will now tell you how Ontology will eventually have two separate cryptocurrencies to make it even more complicated for you! The main coin is the Ontology coin, also called ONT for short.
There will be a total of 1 billion ONT coins, and no more will be produced when that number is reached. Considering that the ONT crypto is still in its early days, it is actually a NEP-5 token that is compliant with the NEO blockchain.
It is similar to ERC-20 tokens which are compatible with the blockchain of Ethereum only. When the MainNet Ontology launch takes place, the ONT token will then be exchanged for a new coin exclusive to the Ontology blockchain.
There will be a second cryptocurrency called Ontology Gas (ONG) when the MainNet launch occurs, rendering Ontology a dual-token platform. ONG’s function is similar to NEO’s GAS token, which essentially allows people to receive transaction fees while helping to keep the blockchain in service.
So now that you’re familiar with the two-token scheme, the next section of my Ontology coin guide will look at how transactions operate.
How Do Transactions Work?
The Ontology structure is intended to not act as a single blockchain. The platform will now allow businesses to make full use of both private and public blockchain. Let me describe that more in depth.
A financial institution would not want to place all of its data on a public blockchain because this would allow its rivals to access all of its information. In this context, they are going to install the Ontology blockchain, which is a private blockchain that can only be accessed by the financial institution, or anyone else they want to share with.
However, there might be some information that they may want to make public, such as people’s ability to check their identity. And if a new customer decides to open an account with the financial institution and then needs to check their identity, then the public blockchain (such as NEO) will connect with the private blockchain (Ontology), which is where the private information is held.
Ontology thus acts as a bridge between the digital world and the physical world, all in a confidence-less environment. But how do you know they can trust the information? The Ontology network, like any other blockchain, uses a consensus mechanism.
A framework for consensus is a way for blockchains to validate and check transactions without involving a third party. In other words that is what decentralizes the blockchain. Blockchains use plenty of different consensus mechanisms, with the most common being Proof-of-Work and Proof-of-Stake.
The Ontology token will therefore use something that it calls VBFT, which incorporates three different types. These are Proof-of-Stake (PoS), Byzantine Fault Tolerant (BFT), and Verifiable Random Function (VRF) .
Let’s compare what VBFT can do compared to other blockchains like Bitcoin and Ethereum, to make it a little simpler. All blockchains use the Proof-of-Work model which can validate up to 7 transactions per second in the case of Bitcoin, and approximately 15 in the case of Ethereum. Despite still being in its early days, Ontology is supposed to be able to validate thousands of transactions per second.
Note: Ethereum aims to move from Proof of Work to Proof of Stake, as well as make other enhancements to further tackle their scalability problems.
What’s new, then? Well, to reach an agreement that the transaction is valid, the proof-of-work consensus model requires more than 50 percent of all nodes on the network. However, VBFT only requires 2/3 which allows transactions to be cheaper and faster.
Don’t forget that the Ontology crypto network can be used not just for financial transactions but also for data of all kinds!
So now you know how the system operates, the next part of my Coin Guide on Ontology will look at its potential.
Potential of Ontology?
As for real-world application, the Ontology network’s capacity is practically infinite. This is because all types of business will benefit from the blockchain protocol – especially because it enables data to be transmitted in a secure, open, fast and cheap way.
Not only this but Ontology will also be able to provide a forum for dApp and smart contracts that the NEO blockchain will support. This effectively opens the doors to full automation, ensuring that companies can carry out data transactions without having to have a third party check it.
Remember how I clarified earlier that Ontology can greatly support the health-care industry? Well, the intelligent contract feature will make it even more successful. What if you were given a weekly prescription by a doctor, which was then posted on the Ontology network?
You will then take it to your nearest pharmacy and the transaction would be added to your medical file as soon as you receive it. Pretty sweet, huh?
Since it was released, the Ontology coin’s value has risen extremely fast. In reality, it has hit all-time highs of over a billion dollars, making it one of the market’s most successful crypto-currency ventures. Yet its capacity for more growth will depend on what alliances it makes.
In fact, only one major collaboration within China could see the Ontology coin pricing skyrocket!
On the other hand, when it comes to cryptocurrency – China is the country where Ontology operates in and it is one of the world’s strictest nations. It’s important to note that since then the Chinese government has prohibited cryptocurrency trading and ICOs and is also considering adding mining to that list now. If they believe the Ontology blockchain is not meeting the Chinese government’s ideology, they could one day put a stop to it.
According to the Ontology Twitter account, however, OnChain was recently in meetings with Chinese government officials, which is definitely a positive sign!
So now that you are aware of the ontology coin’s ability, the next part of my guide will look at how stable the network is.
Is Ontology Secure?
You should now have a clear understanding of what the Ontology project is, what the aim is and how the technology works if you have read my guide up to this stage. However, it is also important to understand how safe it is.
This is especially important because if businesses are going to implement the Ontology network within their existing structures, they need a guarantee that their private data does not end up in the wrong hands.
In a decentralized environment, each and every data transaction is verified, ensuring that no single person or authority can take control of the network. As the Ontology community (who hook up their device into the network) confirms its confirmation obligations, a hacker will need to take control of more than half of the devices on the network to have some effect whatsoever! Even then, executing the attack will be so costly for the hacker that it will end up being useless.
That’s a lot safer than a normal, centralized system. A hack would be much easier in a centralized network, and take much less effort than a decentralized system like the Ontology blockchain would. For a hacker there is a single entry point in a centralized network. There are countless computers in a decentralized network (typically spread out all over the world) that need to be hacked.
To put this in perspective: If you guessed the password to a device that has access to a centralized server, then you might edit the documents on that server. Unless you did the same on a computer running a decentralized server, however, you would not be able to access the records. You will need to monitor over half of the entire network, not just a single computer!
In addition, any single data transaction that occurs on the Ontology blockchain, like all other blockchains, is irreversible — they can not be withdrawn. This makes it extra safe because it adds a transparency layer for the company which installs the protocol. The Ontology blockchain is, essentially, very stable.
How Can it Be Abused?
As the ONT coin was designed from the bottom-up (meaning it wasn’t forked from another blockchain), there are no unique problems in the technology that would cause it to be misused. There are however in general some important things to note about cryptos.
You don’t need to disclose your real-world identity when sending or receiving the Ontology crypto (or any other crypto). Instead, the blockchain protocol lets you anonymously send and receive coins. Though this has its benefits, offenders who choose to commit crimes may misuse it.
One such example is the dark web, where sites trade illicit products for cryptocurrencies in exchange. Another reason is that cryptocurrencies may be perfect for those that want to launder money, because it is very hard to figure out who is the true owner of the funds. However, these problems are not exclusive to the ONT token, because these features can be found in all cryptocurrencies.
Advantages and Disadvantages
Before I finish my Ontology Coin Guide, I figured it would be a good idea to sum up all the pros and cons I covered!
- Easy entry for companies: Ontology would be perfect for businesses of all sizes as it needs no previous knowledge of blockchain technology.
- Good team: OnChain, the business behind Ontology, with its NEO project already had tremendous success in the blockchain industry.
- Limitless potential: There is endless number of industry sectors that will benefit from the Ontology coin.
- Unique Consensus: Ontology’s VBFT consensus model is special, mixing speed and safety. The transactions are hoped to be possible in the thousands per second.
- A bridge between real and virtual: The blockchain ontology will allow the digital economy to link through multiple blockchains to the real-world economy.
- Strict country of origin: Ontology operates for crypto-regulation in one of the most stringent nations – China.
- Early days: While there is great potential for the ONT token, the project is still in its early days.
And that’s the highlight of my Coin Guide to Ontology! While cryptocurrency in general can be very complicated, it can be even more difficult to understand the Ontology project because the definition is unique! I hope I’ve cleared it all up for you though.
You will now have a clear understanding of what the Ontology coin project is and what they are trying to do, if you read it from the start to the end. Along with its benefits and drawbacks, you will also have a clear idea of how the system functions.
So, what do you think of the crypto project Ontology? Do you think it’s going to be a success? I think it has the potential to go mainstream, because it would be suitable for small to medium-sized companies that do not have the resources to have their own blockchain.
It’s still early though, so we’ll have to wait and see! Nonetheless, I really like Ontology so I thought it was really awesome they gave a lot of free ONT away.