What does blockchain mean?
Blockchain refers to a type of distributed ledger technology that maintains records in a decentralized manner. Unlike traditional centralized systems, blockchain enables the creation of an immutable public ledger that is accessible to all users. This technology offers high security levels since data stored on a blockchain ledger cannot be retroactively altered, and users can remain anonymous, ensuring their privacy.
It is essential to understand that blockchain and cryptocurrencies are not the same. While blockchain powers cryptocurrencies, it has several other potential uses beyond digital currencies like Bitcoin (BTC 1.74%). To put it into perspective, blockchain is like the motor that powers a car, while cryptocurrencies are the vehicle. Although a motor is necessary for a car, it can also have other uses, just like blockchain.
Apart from powering digital currencies, blockchain has several potential applications, including digital IDs, rewards and loyalty programs, copyright protection, digital voting, real estate transfers, medical records, and wills.
Consider these top blockchain companies for your stock portfolio
Blockchain technology has taken the world by storm, with dozens of publicly traded companies incorporating it into their operations, offering blockchain-related services to customers, or playing a role in the cryptocurrency industry. There are companies that concentrate solely on innovating in the field of blockchain and/or cryptocurrencies, while there are others that utilize blockchain-related products and services to enhance their already prosperous business.
If you want to add exposure to this exciting technology in your stock portfolio, here’s a list of nine excellent blockchain companies to consider:
- Nvidia. Nvidia is the leading manufacturer of graphics processing units (GPUs), which are essential components in such important technological areas as artificial intelligence, autonomous vehicles, and gaming. Additionally, GPUs are key hardware components of cryptocurrency mining. Sales of Nvidia’s crypto-targeted CMP chips may rebound if the crypto market recovers, but the rest of Nvidia’s business is an absolute powerhouse market leader.
- Block Financial technology (fintech) company Block, formerly known as Square, has two main components to its business — its payment-processing ecosystem for small businesses and its Cash App personal financial platform. In addition to its Cash App that facilitates quick and easy buying and selling of Bitcoin, the company has ventured into business lending, a stock trading platform, and buy-now-pay-later financing. Block also boasts a team of in-house Bitcoin developers and an open-developer platform, called TBD, that focuses on blockchain applications.
- IBM Blockchain has offered game-changing solutions to various clients, including but not limited to Home Depot, Renault, and Albertsons. In the future, if blockchain-based solutions become more prevalent, IBM Blockchain could experience substantial growth. IBM Blockchain’s primary focus is to aid customers in constructing more trustworthy and streamlined supply chains.
- Mastercard Payment processing giant Mastercard has announced partnerships with blockchain technology companies and has formed a Crypto Card partner program, joining several leading Asia-Pacific cryptocurrency companies to launch crypto-funded Mastercard payment cards. Mastercard also recently helped launch the first crypto-backed payment card in partnership with crypto lender Nexo.
- Amazon. Amazon operates the leading cloud infrastructure service, Amazon Web Services. The AWS platform offers Amazon Managed Blockchain, which allows customers to create and manage their own blockchain networks. There’s also potential for Amazon to eventually incorporate blockchain technology into its massive e-commerce business.
- Coinbase. Holdings Coinbase is the world’s largest cryptocurrency exchange, with more than 100 different digital assets available to trade on its platform. The company has roughly 98 million verified users in more than 100 countries around the world, and there is more than $1.2 trillion in annualized cryptocurrency trading volume flowing through the platform. If the cryptocurrency prices recover, Coinbase may stand to benefit greatly despite the recent decline in its business.
- GlobalX Blockchain ETF. The GlobalX Blockchain ETF was established in the middle of 2021, with the goal of enabling investors to access a diversified portfolio of blockchain-related stocks through a single investment. The ETF invests in 25 companies, with Coinbase ranking as its largest holding. In addition, the fund also includes several companies that aren’t directly listed on U.S. stock exchanges.
Consider investing in these top blockchain companies to diversify your stock portfolio and potentially benefit from the growth of this innovative technology.
