How to Buy The Graph in Canada

Blockchains sound complicated, but they’re nothing more than huge databases of financial transactions. Head to a Bitcoin blockchain explorer and you’ll find an exhaustive list of all the transactions ever processed since Bitcoin’s launch in early 2009. What distinguishes a blockchain from, say, a huge Excel sheet, is that this database is decentralized, meaning transactions are verified by anonymous computers from all around the world.

If you put the concept of decentralization aside, a blockchain database looks like any other database. But sifting through all the data contained therein is a complicated task. Traditionally, you’d ping an API to grab information from a company’s database—like pinging Twitter to find how many followers Wealthsimple has, and so on. But for decentralized blockchains, there are no servers that can perform the computational task of providing blockchain data—the network is decentralized.

There are two solutions to this problem. The first is to create companies that will, for a fee, provide you with the information you need. The second is to decentralize the process of sorting through and fetching blockchain data, which removes an intermediary in an industry obsessed with disintermediation.

The second solution has been turned into a cryptocurrency protocol called The Graph. This is a decentralized API service that uses a cryptocurrency to incentivize data scraping, sorting and sifting, meaning that a blockchain protocol can reliably source the data it requires to operate.

The network comprises four actors. The first is the indexer, who performs the computational work necessary to sort blockchain data. The second is the delegator, who funds the indexer to incentivize them to do some of this work in exchange for a cut of the indexer’s profits—kind of like a venture capitalist. The third is the curator, who suggests data for the indexer to sort. The fourth is the consumer—the person who requests information from a decentralized API.

The name of the cryptocurrency used to incentivize data scraping is a token known as GRT (also commonly referred to as The Graph). GRT is an ERC-20 token, meaning it is based on the Ethereum blockchain. You can buy the GRT crypto on the open market, earn it by sourcing data, or spend it to incentivize other computers on the blockchain to fulfill your request.

But how does one buy the GRT coin? In this guide, we’ll explain two of the most popular ways to buy it outright on the open market: through a centralized or decentralized exchange.

How to buy The Graph crypto on a centralized crypto exchange

The quickest and easiest way to buy the GRT token is through a centralized cryptocurrency exchange.

These companies offer two types of services: the first lets you buy crypto via an exchange’s brokerage service, where you buy crypto directly from the exchange. This is the kind of service that Wealthsimple Crypto offers. Think of it like buying a stock from Vanguard or Fidelity.

The advantage of buying The Graph’s cryptocurrency from a brokerage is that you can buy the token with a fiat currency—regular money, like the Canadian or US dollar, rather than with another cryptocurrency. Brokerages often let you buy GRT directly with a debit or credit card. The process is usually quick and easy—it’s a solid option for first-time crypto users.

The disadvantage of buying GRT from a brokerage is that it is usually more expensive than buying crypto through the other methods offered by an exchange: a peer-to-peer matching engine. An exchange might quote you an outdated price, and will likely charge you additional processing fees on your purchase. A purchase of $10 worth of GRT with a brokerage’s “instant buy” feature might only buy you $9 worth of GRT tokens, while a peer-to-peer trade could buy you $9.99.

So how do you buy The Graph’s GRT coin through a matching engine? Head to the part of the site that looks a little like a Bloomberg terminal. Buyers and sellers place their bids for coins and the cryptocurrency company matches the trades to fulfill orders. Think of these sites as the crypto equivalent of the Toronto Stock Exchange, albeit without the regulation.

Peer-to-peer matching engines are fast and cheap. Trades often cost as little as 0.01% of the total order price. You can also place advanced orders on these exchanges, like “limit” orders, which are only executed after GRT reaches or falls to a certain price. That’s helpful if you want to buy GRT once the market dips, but don’t have time to hang around and watch the price chart like a hawk. You can also buy complicated financial products, like derivatives, which let you bet on the future price of GRT tokens.

These professional-looking exchanges have their drawbacks: the most obvious is that they are unwieldy and appear difficult to learn. Some of these exchanges—and this criticism applies to brokerages, too—crash in the event of a market wipeout, meaning that some traders aren’t able to exit trades in time.

To use a crypto exchange, the first thing to do is to find one that services your region and create an account. Signing up for a crypto exchange is similar to signing up for a stock trading account. You’ll need to provide identifying information and set a password, but nothing too arduous. Once your account has been verified, you’re ready to trade.

Buying from a crypto exchange’s brokerage service is very simple. Look for the “buy crypto” or “instant buy” buttons and you’ll likely be redirected to a brokerage service.

Brokerage platforms usually let you pay with money deposited to your exchange account, or directly with a credit or debit card. Remember to not leave too much money within your exchange account. Unlike banks, crypto exchanges are not insured by government deposit schemes.

Buying GRT from the professional crypto exchange site is a little trickier. The first thing to do is to work out what you want to buy GRT with. You have two choices: a cryptocurrency or a fiat currency. Because GRT is a smaller coin than, say, Bitcoin, Ethereum, or Tether, it’s likely that your choices will be limited. You can check the largest markets on sites like CoinMarketCap or CoinGecko. (Just search for terms like “GRT Coin CoinMarketCap,” “GRT coin chart” or “GRT token price,” and these sites will likely be top of your list).

Many exchanges do not support direct purchases with the Canadian dollar. So how can you use your CAD to buy GRT? You’ll have to buy an intermediary currency first, and then use that currency to buy GRT.

With CAD, your first step is to deposit money to the exchange. Exchanges usually let you wire money or transfer it with a debit or credit card—wire transfers are often free, while credit or debit card deposits often come with payment processing fees.

Then you need to buy BTC, ETH, or USD with your CAD by selecting the pairing on the exchange and selling the appropriate amount of CAD. The easiest way to do this is by executing a “market” or “spot” trade, where you trade at the current market price.

Remember that Bitcoin and Ethereum are more volatile than US dollars. Once you have sold your CAD for one of those currencies, you can buy GRT. Select the appropriate GRT pairing and sell your intermediary currency for GRT tokens.

If you’ve followed these steps, you should have bought GRT tokens. You can withdraw them to an Ethereum wallet, like MetaMask. You will likely have to pay a fee to withdraw funds from the exchange. Fees for Ethereum tokens, like GRT, are often higher than withdrawals to other blockchains because of the high transaction fees on the Ethereum blockchain.

How to buy GRT from a decentralized exchange

While centralized exchanges are run by companies, decentralized exchanges run entirely on code. They support an unlimited number of cryptocurrency pairings—as long as liquidity providers are on hand to bankroll the crypto vaults that traders swap in and out of on these exchanges—and require no identification. In fact, you don’t even have to sign up; you just connect to the exchange with your crypto wallet.

One drawback of most decentralized exchanges is that you can only trade cryptocurrencies from the same blockchain. This is changing slowly thanks to so-called token bridges, which connect different blockchains together, but bridges are difficult to use and can suffer from liquidity issues.

Thankfully, GRT is based on Ethereum, the most popular blockchain that allows you to create tokens. This means that you can trade it on the world’s most popular decentralized exchange, Uniswap. To trade GRT on Uniswap, you’ll have to connect your wallet to the site (look for the “connect wallet” button in the browser app) and then swap your token. Your wallet will need to contain some ETH to pay for the transaction fee.

Select the relevant tokens from the dropdown menu and review the trade. As of this writing, a swap of $1 ETH comes with a network fee of not-quite $26. This fee changes all the time. Note that this fee is not directly proportional to the amount you are trading! A trade of 0.000001 ETH, worth $0.003 as of this writing, would still cost about $15—far greater than the value of the entire transaction.