Speculators hope The Graph (GRT) cryptocurrency can imitate Google’s strategy of growth.
To explain, The Graph is an indexing protocol for the Ethereum blockchain and the Interplanetary File System (IPFS). The IPFS is a peer-to-peer hypermedia protocol for open-source and decentralized networks. The hope is that the IPFS can create permanent content addresses that will make data available from many sources.
As an indexing protocol The Graph searches networks for data. Similarly, Alphabet’s (GOOGL) Google is a search engine that scours the internet for data. Google is the most popular search engine in the world generating 87.7% of search engine traffic in June 2021, S. Statcounter estimates.
Could the Graph Make money?
Alphabet (GOOG) shows search is a lucrative business. Alphabet reported $55.314 billion in quarterly revenues on 31 March 2021, Statista estimates. The quarterly revenues grew from $15.420 billion on 31 April 2014. Most of Alphabet’s revenues come from advertising.
To explain, Alphabet makes money when Google directs a surfer to a website. CNBC estimates that Alphabet made $147 billion in advertising revenue in 2021.
I think The Graph speculators hope the Graph’s indexing protocol can achieve a fraction of Google’s success. Notably, Mr. Market paid $2,500.88 for Alphabet shares on 8 July 2021.
What is the Graph?
The Graph allows blockchain apps to search and access the blockchain without proprietary indexing servers. Instead, the Graph acts as an indexing server as Google does. Google indexes internet data while the Graph indexes blockchain data.
Blockchain developers can use The Graph to build and publish open Application Programming Interfaces (APIs). An API is a software intermediary that allows two applications to communicate and work together.
For example, a game developer can use The Graph to build an API that allows his gaming platform to accept Stablecoins. In addition, a publisher can use The Graph’s Global GraphQLAPI to share data throughout the blockchain and on Linux solutions that use IPFS.
What Value Do APIs have?
An API serves as a gateway to a network for an application. The API allows the app to access the network and block or admit specific data.
One hope at The Graph is to create Web3 a decentralized next=generation internet. Another hope is that The Graph’s indexing protocol will replace traditional search engines.
The Graph’s developers claim they can use its APIs for decentralized finance (DeFi), Governance, Grants and Philanthropy, Marketplaces, Entertainment, and Social Media. For example, an encrypted social media post could contain a Graph API that offers access to a blockchain publication or payments platform.
Theoretical uses for The Graph’s protocols include programmable money and financial contracts, better security, digital documents and smart contracts that could run forever on reliable public infrastructure, identity protection, seamless connectivity between decentralized apps (DApps), and the creation of transparent rules for blockchain governance.
The Graph Network
A long-term plan is The Graph Network. They describe the Graph Network as “a marketplace of service providers ensures that data remains open and that dApps continue to run no matter what.”
Potential uses for The Graph Network include indexers, node operators who provide low cost indexing, curators who organize and transmit data, and delegators who help secure the network without a Graph Note.
Live products on the Graph Network include Uniswap, Synthetix, Decentraland, and Aragon. Uniswap is a market tracking solution. The Synthetix Exchange is an exchange that helps traders make fast decisions. The Decentraland Marketplace lets users shop for land, accessories, and collectibles in an expansive digital world. Aragon helps individuals create internet native organizations.
The Graph (GRT) has some impressive backers including Coinbase Ventures, CoinFund, Collider Ventures, CoinFund, DTC Capital, Stakefish, JD Capital, and 122 West.
What Value does The Graph Have?
Mr. Market thinks The Graph has some value. Notably, CoinMarketCap listed The Graph (GRT) as the 48th most value cryptocurrency on 8 July 2021.
In addition, CoinMarketCap estimates The Graph had a Market Capitalization of $2.113 billion, a Fully-Dilluted Market Cap of $6.694 billion, and a 24 Hour Market volume of $128.506 million on 8 July 2021. They based those numbers on a Maximum Supply of 10.57 billion GRT, a Total Supply of 10 billion GRT, and a Circulating Supply of 2.908 billion GRT. In addition, CoinMarketCap gave the Graph a 66.53₵ Coin Price on 8 July 2021.
In contrast, CoinBase gave The Graph (GRT) a $2.08 billion Market Capitalization, a $130.8 million 24 Hour Market Volume, a 66.55₵ Coin Price, and a 2.9 billion GRT Circulating Supply on 8 July 2021. Thus you can buy The Graph through CoinBase.
I think The Graph is an interesting Ethereum Request for Comment (ERC) cryptocurrency with potentially lucrative capabilities. However, there is no evidence the Graph’s builders can deliver on any of their promises. Hence, the Graph’s value is theoretical.
Originally published at https://marketmadhouse.com on July 8, 2021.