3 Blockchain Stocks to Buy and Play the Technology of the Future

tte, InvestorPlace Contributor

Blockchain technology is a profound innovation that can be difficult to understand, at least until one has had the opportunity to put it to use in various applications. In some ways, it’s similar to the Metaverse, where you have to try it out before you can fully appreciate the technology under the hood.

Cryptocurrencies are a major innovation made possible by blockchain technology. However, it is not the only one. And while various cryptocurrencies are novel investments or speculations, I would argue that the most far-reaching blockchain innovations may still be many years away.

Unless you own Bitcoin (BTC USD) or non-fungible tokens (NFTs), you probably don’t know the full possibilities of blockchain technology. The most important insight is that blockchain technology enables decentralization and security at the highest level.

Currently, blockchain is synonymous with cryptocurrencies. But in the future it could develop into a larger, more impactful issue. Here are three of my favorite blockchain stocks to play with.

Coinbase (COIN)

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Coinbase Global (NASDAQ:COIN) could be one of the top crypto plays in public markets for many investors looking for a convenient proxy to play a kind of Bitcoin bounce. However, it is much more than just an exchange platform. Coinbase stands out as an innovator keeping blockchain technology moving forward.

ARK Invest’s Cathie Wood, one of the company’s largest believers and shareholders through its ARK ETFs, sees Coinbase as a top contender in the digital wallets market, in which they believe a “winner take most” scenario is playing out.

In fact, there are a lot of digital wallets out there. However, what sets Coinbase apart from the crowd is its blockchain expertise. If blockchain technology holds the key to the ultimate digital wallet with the highest levels of security and seamless peer-to-peer transactions, Coinbase is a horse worth betting on.

After rising 188% in the past year, COIN stock is red hot and starting to get expensive at a price-to-earnings (P/E) ratio of 44.11. Given the blockchain technology you’re exposed to, it might be worth braving the momentum and increased sticker price of this blockchain stock, especially if you believe in crypto and the technology that powers it.

International Business Machines (IBM)

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For a relatively mature company, International Business Machines (NYSE:IBM) is actually involved in many high-tech cakes. From artificial intelligence (AI) and quantum computing to blockchain, IBM is innovating in some of the most exciting areas of the emerging technology universe. Still, the stock doesn’t trade like it’s on the cutting edge of technology, as IBM stock has a trailing P/E ratio of 17.7.

Perhaps IBM’s reputation as a laggard over the last decade is a factor contributing to the stock’s seemingly reduced valuation. In addition to AI, IBM is exploring the potential of blockchain technologies with various projects that could help deploy the technology in industry.

With interesting projects aimed at unlocking the power of blockchain in specific industries (keep that in mind). Project XCEED for the auto industry), perhaps IBM is the blockchain stock to watch.

Block (SQ)

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Speaking of digital wallets and blockchain technology, we did it Block (NYSE:SQ), formerly known as Square, which is behind the digital wallets Cash App, Square (payments), Tidal (a music streaming service) and its own Bitcoin projects.

In fact, it’s hard to know what’s really happening with TBD, a kind of “black box” of Block. However, I know that the company has shown that it is serious about the potential of blockchain technology. First, the company changed its name from Square to Block in 2021, and second, the company did this “a share in the future” with its involvement in Bitcoin.

At a forward P/E ratio of 19.4, SQ stock looks absurdly undervalued. Until Block lays the foundation for something truly unique, it will be difficult for the company to regain investor attention, as the company is down nearly 77% from its bubbly peak in 2021.

At the time of publication, Joey Frenette did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to those of InvestorPlace.com Publishing Guidelines.

At the time of publication, the responsible publisher did not hold, directly or indirectly, any positions in the securities mentioned in this article.

Joey Frenette is an experienced investment writer specializing in technology and consumer stocks. A contributor to Motley Fool Canada, TipRanks, and Barchart, Joey excels at identifying mispriced stocks with long-term growth potential in a fast-moving market.