- Cardano (ADA-USD): Cardano plays the long game built on academic research, not trial-and-error.
- Polkadot (DOT-USD): Polkadot is like a central exchange for every blockchain project.
- Solana (SOL-USD): Solana’s protocol could be the next iteration for blockchain and already results in massive speeds.
The thought of buying cryptocurrency with the intent of holding it forever is somewhat of a foreign concept. That is, a lot of the action in these nascent days of crypto has centered on establishing short-term positions with cryptos to buy, with the intent of quick sales to capitalize on volatility.
While that’s certainly going to remain a significant driver of the market, there’s the opposite path to consider. Buy and hold investments in crypto will become a more viable route the more the market matures. Readers will note that the two most dominant players in the crypto space are conspicuously absent on this list.
That doesn’t mean they aren’t long-term winners or that I don’t think they will be. But given their prices and how much has been written about them, I’ve chosen not to include them here.
That said, Bitcoin (BTC-USD) currently sports a $750 billion market capitalization while Ethereum’s (ETH-USD) market cap is above $350 billion. They will continue to dictate the direction of the market to a significant degree. But let’s jump into three cryptos to buy not named Bitcoin or Ethereum.
Cryptos to Buy: Cardano (ADA-USD)
Speaking of Ethereum, Cardano (ADA-USD) was founded by Charles Hoskinson, a one-time employee and co-founder of Ethereum. And that’s one of the reasons many investors speculate that Cardano is simply going to win in the long run.
Both networks offer similar functionality in many ways. Developers can create smart contracts on both that run on programmable logic. Both networks allow users to build programs, or decentralized apps (dApps).
But Ethereum is proving less flexible. Cardano has always operated on a proof of stake protocol. That has been a major issue for Ethereum and a strength for Cardano. Ethereum originally operated under a proof of work model. These days it is moving toward a complete transition to proof of stake which it calls the Beacon chain. But it currently operates PoS and PoW chains in parallel with the hope that it will fully transition to PoS this year.
The reason to consider Cardano over the long term is that its approach is geared toward the long term. The firm’s development has been informed by academic research. That implies that it will get it right over time even if it takes longer to come to those decisions.
In theory, this means that Cardano is much more immune to making fatal mistakes than other crypto projects that rely on trial and error.
Polkadot (DOT-USD) is another up-and-coming crypto with tons of long-term potential. In terms of market cap, it is roughly half the size of Cardano and boasts an $18 billion value.
The reason to assume that Polkadot has long-term viability lies in its functionality. Polkadot’s purpose is connecting and securing disparate blockchains in a way that facilitates chain-to-chain transferral of any data or asset.
Looking to the future that means that Polkadot could very well serve as the intermediary for the flow of information in Web 3.0. Others have likened Polkadot’s potential place in Web 3.0 to that of HTML (HyperText Markup Language) and the internet. HTML allows information to be structured on web pages in an easily understandable and transmissible manner. Polkadot could be the dominant conduit for data from blockchain to blockchain in the next interaction of the internet. It’s easy to see why it may very well be a winner over a very long period of time then.
Polkadot, like Cardano, also spun out of Ethereum. One of its three co-founders, Gavin Wood, is a co-founder of Ethereum.
An investment in Polkadot right now is also somewhat of a buy-the-dip opportunity. It trades at $18 but was trading above $50 in October of last year. Before that DOT remained above $30 for a period of several months in early 2021.
Cryptos to Buy: Solana (SOL)
Solana (SOL-USD) is the only crypto among the three on this list without a direct connection to Ethereum. It was founded by Anatoly Yakovenko and Greg Fitzgerald, two former Qualcomm (NASDAQ:QCOM) employees who worked together.
One of the primary reasons to assume Solana will lead the next generation of crypto is its proof-of-history consensus protocol for building blocks on the blockchain. The standard was created by Yakovenko, who explains it in detail in this article.
The proof of history protocol creates a historical record that proves where an event happened in time. This is important because it results in incredibly fast transaction speeds. Other blockchain protocols rely on validators to confirm that an event has happened. This costs precious time for those nodes to communicate their mutual agreement.
The result is wasted time. Solana boasts transaction speeds of 65,000 transactions per second. That far faster transactional speed will allow more to be built on Solana’s blockchain in a far shorter amount of time in theory. And that’s why it remains on many crypto investors’ radars for the long term.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.