Bitcoin (CCC:BTC-USD) is more than just a fad. The digital currency is working to make banking obsolete, transforming how we do everything from paying bills to saving for retirement — all without relying on third-party interference or centralized authorities. However, not all the headlines are reserved for Bitcoin. Several other altcoins are rising up and making a dent. They might not be as famous as BTC or Ethereum (CCC:ETH-USD), but they have solid use cases. Ultimately, that’s what sets cryptocurrencies apart.
That said, investors should proceed with caution here. Altcoins are more volatile than the major cryptocurrencies out there. While the latter now have institutional backing, several smaller names do not have that privilege.
Nevertheless, the risk-reward for every coin is different. Altcoins are one of the most diverse and interesting investment options today. They’re different from traditional assets like stocks or commodities, meaning they won’t correlate as much with other investments in your portfolio. But that means you can also take risks without worrying about losing money on something else.
So, without further ado, here are seven under-the-radar altcoins to watch:
- Cardano (CCC:ADA-USD)
- The Graph (CCC:GRT-USD)
- Polkadot (CCC:DOT-USD)
- Algorand (CCC:ALGO-USD)
- BarnBridge (CCC:BOND-USD)
- Dash (CCC:DASH-USD)
- Hedera Hashgraph (CCC:HBAR-USD)
Altcoins to Buy: Cardano (ADA)
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First up on this list of altcoins, Cardano is a blockchain-based cryptocurrency. ADA was created with one goal in mind: disrupting the status quo like never before. This crypto’s unique engineering provides scalability and safety while also being decentralized — individuals or organizations worldwide can use it without depending on third parties for access.
Not only is Cardano more efficient than other coins, but it also boasts an open-source architecture. ADA has been designed to minimize its volatility and provide security for users through a data-driven development process and peer-reviewed code. Plus, on top of this, the altcoin also boasts a very active development team.
Take Cardano’s recent smart contract upgrade for example. Whenever there is an upgrade, the prices of digital currencies can get an increase. Then, once the update goes live and a few weeks have passed, there is a “buy the rumor, sell the news” scenario. When that happens, you can sell and then wait for another buying opportunity. That does not, however, happen if developers do not regularly release updates. Dogecoin (CCC:DOGE-USD) is a great example in this regard. Although it released an update recently, its development team is one of the least active in the crypto space.
The Graph (GRT)
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Next up on this altcoins list, GRT is a token that powers The Graph, a decentralized indexing protocol used by blockchains like Ethereum. It makes the data on networks more accessible and easily searchable with open APIs (application programming interfaces) so that anyone can query it via their preferred language — GraphQL. Users can then use subgraphs to create a “global graph” of blockchain data.
The new Graph platform makes it easy to search for blockchain data through simple queries. Before The Graph, developers had to create their indexing servers. Apart from involving many engineering and hardware resources, this broke several security protocols that made the process antithetical to decentralization.
All in all, you can’t underestimate the importance of The Graph in decentralized finance (DeFi). As it continues to provide specific functionality for the blockchain ecosystem, any positive developments or improvements in the technology could push GRT prices even higher.
Altcoins to Buy: Polkadot (DOT)
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One thing that can be extremely frustrating are language barriers. It can be hard for both sides when two people want to communicate but speak different languages. This same thing can happen with blockchains and altcoins. However, that may all change thanks to one ingenious project: Polkadot.
Many blockchains operate in a closed-loop fashion, with security being their top priority. However, that’s not great if you want individual blockchains to talk to one another. Polkadot seeks to create a trustless way for blockchains and other decentralized systems of value transactions — such as smart contracts, dapps (decentralized apps) or cryptocurrency wallets — to do so.
For example, let’s say you want to exchange Bitcoin for Ethereum. At present, crypto investors have to use Binance (CCC:BNB-USD) or a similar service to complete the task. DOT is trying to change this by allowing blockchains to communicate directly with one another. That way, users can complete these swaps (or more complex transactions) without a hitch.
Blockchain-based networks like the one behind Polkadot are heralding in an era of DeFi. By not being forced to use a centralized exchange, users can avoid fees and the headaches that come along with the process.
One of the other major reasons to invest in DOT is the number of transactions Polkadot can complete quickly. Many believe this blockchain will solve the scalability problem. Theoretically, it can handle huge transactions through sharding and still provide fast speeds as well as low transaction fees.
Faster than Bitcoin? Count me in.
Algorand (ALGO)
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Next up on this list of altcoins, Algorand is one of the most advanced and cutting-edge blockchains in existence today. In fact, it’s so powerful that it could give Ethereum a run for its money with faster transaction speeds and smart contract capabilities. Among the sea of “Ethereum Killer” cryptos, this one definitely stands out.
The Algorand network wants to act as a connection between the traditional centralized system and the new digital economy comprised of DeFi systems. This could help ALGO catch on with DeFi developers by providing them apps powered through its blockchain-based system for trading crypto assets in real time without interference or manipulation.
Algorand’s price could remain resilient if the network is employed swiftly. But that’s not guaranteed. As such, the coin will likely experience some short-term volatility due to uncertainty over cryptos in general — especially considering how quickly ALGO-USD has grown.
However, the good outweighs the bad here. Algorand has an excellent developer team headed by the eminent Silvio Micali, a faculty member at the Massachusetts Institute of Technology (MIT). This crypto’s interoperability will make it easy to exchange information across blockchains. And it’s involved in two of the hottest parts of the space: DeFi and non-fungible tokens (NFTs).
Altcoins to Buy: BarnBridge (BOND)
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Next up, BarnBridge is a platform that allows people to invest in cryptocurrency and altcoins, similar to how mortgage-backed securities are often used as an investment vehicle for regular old mortgages. Basically, BarnBridge users will soon be able to finance projects with their crypto wealth through this innovative new digital economy.
BarnBridge offers different tranches to investors. The riskier ones offer higher yields but also carry the possibility of capital loss when investing in BarnBridge’s product offerings for this type of portfolio construction strategy. On the other hand, investors can protect against principal losses by putting money into one or two low-risk products rather than just taking all their chances on an entire series that may later fail.
BOND is a unique and innovative token that could be worth hundreds or even thousands of dollars down the road. Its supply will also not exceed 10 million. That makes it similar to Bitcoin in that it provides a very effective hedge against inflation.
Dash (DASH)
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It’s a well-known fact that privacy and cryptocurrencies go hand in hand. What’s more, it’s easy to understand that people want their personal information kept private. This is part of why the time is ripe to invest in privacy-focused altcoins like Dash.
Currently, certain governments are looking at Bitcoin as an alternative to traditional fiat currencies. Still, major economies like the United States refuse to wholly recognize it. But when people are able to bypass government restrictions, it can be disruptive. By removing intermediaries like banks and credit card companies, Bitcoin is throwing a wrench into the financial infrastructure we know today.
That said, one of the major reasons users engage with cryptocurrency is because of anonymity. They want to keep transactions private. But no one can guarantee governments will not further regulate this area of investing.
That’s where Dash comes in. This pick’s PrivateSend offers users the option to make their transactions private, a helpful feature for many. Of course, there is one negative here: Dash charges higher fees in comparison to other privacy-focused coins.
Altcoins to Buy: Hedera Hashgraph (HBAR)
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Last up on this list of altcoins, Hedera Hashgraph is a new distributed ledger technology system that could be the future for many companies and organizations. It’s not just about making transactions faster. It’s also about ensuring data integrity without the need for third parties.
The developers behind HBAR see traditional blockchain technology as outdated. To improve on the ways to use blockchain, they developed a consensus algorithm called a gossip protocol. The protocol uses a non-linear chain to ensure fast transactions.
Every coin wants to gain investors’ trust. The best way to do that? Get institutional backing. That has worked wonders for Bitcoin and Ethereum, which have done particularly well after major companies started accepting them.
The same is likely to happen for Hedera. This platform has support from some of the world’s most prestigious names, including Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google and IBM (NYSE:IBM). That helps it stand out among thousands of altcoins.
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On the date of publication, Faizan Farooque 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.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.