Thinking of Investing in Crypto? Here Are 4 Coins and Tokens that Are Actually Useful

It can sometimes feel as if crypto only solves problems within the crypto world. But these four projects have real-world utility.

Key points

• Cryptos that are actually useful are much more likely to survive long term.
• Livepeer and Helium use decentralized networks instead of expensive infrastructure to solve real-world problems.
• VeChain uses the blockchain to manage supply chains, among other things.

It’s been a rough year for crypto investors. Even top cryptos are down as much as 90% on their all time highs, and many people’s portfolios have been decimated. Sadly, there’s a good chance that prices will stay low for a while to come. Some see that as a buying opportunity, which it could be. But there’s also the risk that many projects — particularly those without much utility — could collapse before the market improves.

If you’re considering investing in cryptocurrency, it’s important to fully research each project and think about how it might perform long term. Look at the leadership, how it stacks up against the competition, what it actually does, and who will use the product. As crypto enthusiast and billionaire investor Mark Cuban pointed out, it’s not enough to simply be a cryptocurrency. If these projects are to succeed, they still need to be able to make money, attract users, and actually be useful.

Here are four with real-world uses that are already in operation.

1. VeChain (VET)

VeChain started out using the blockchain as a supply chain management tool, and has since expanded into other business use cases. For example, let’s say you make luxury handbags. VeChain can track each step of the handbag’s production and sales on the blockchain, so the final buyer would know for sure they were getting the real deal and not a knock-off.

VeChain has also worked with Walmart China to track fresh meat and vegetables all the way from farm to store. Increased traceability means if there’s a problem with a particular batch of food, it’s easier to contain and control it quickly. Like other cryptos on this list, VeChain is available from some, but not all top U.S. crypto exchanges.

2. Livepeer (LPT)

Video streaming is increasingly popular and extremely expensive. Video content needs to be processed so that it can be accessed on different devices at different bandwidths. This is called transcoding, and it requires a lot of computer processing power.

Livepeer essentially pulls together unused computer resources from a network of individuals and uses them to transcode videos. Content producers get scalable, low-cost transcoding, Livepeer doesn’t have to buy expensive infrastructure, and network participants get LPT tokens, which have a value in the real world.

3. Helium (HNT)

Helium is a decentralized wireless network powered by a web of long-range hotspots. Initially aimed at Internet of Things devices, such as smart pet collars, self-driving cars, or fitness devices, Helium is now also expanding into 5G and WiFi connections. Network participants run a Helium hotspot and earn rewards for providing connectivity.

This concept of using crypto tokens to reward participants is an interesting facet of blockchain. Livepeer and Helium are two of many projects that reduce a business’s upfront infrastructure costs by using a network of individuals to do the heavy lifting. Those individuals earn a portion of the fees in what is a more community-based, decentralized business model.

4. Cardano (ADA)

Cardano is a bit of a “love it or hate it” crypto, and some might question its real-world value. It is an ecosystem like Ethereum (ETH) that can host other crypto projects on its blockchain. Its critics point out that it was slower to launch its smart contract functionality, and the ecosystem doesn’t yet have as many apps as other similar cryptos.

However, Cardano has something else going for it: It’s a prime example of real world blockchain utility. For example, Cardano has a partnership with the Ethiopian Ministry of Education to record the academic credentials of five million students on the blockchain. This would make it harder to cheat the education system, and potentially help students access opportunities such as university education or international jobs. Another project on the Cardano network, called Empowa, aims to help underbanked individuals access funds to build homes.

Bottom line

If blockchain technology achieves even a fraction of what is promised, it could transform whole industries. Medical records could be recorded securely on the blockchain and you, the patient, could control how they are accessed. Insurance claims could be paid out automatically when certain criteria were met. You might even be able to store the deed to your house on the blockchain.

The trouble is that the industry is in its infancy, and there’s a lot we don’t know about how it might unfold or even if it will make it through the current crypto winter. Think of it as akin to the early days of the internet. Everybody is chasing the next Amazon, but for every success story, there will be hundreds of failures.

As an investor, looking for cryptos that are actually useful is a great start. All the same, it’s important to only invest money you can afford to lose and to ensure crypto makes up only a small percentage of your wider portfolio. That way you can still invest in smaller, riskier projects, but won’t face financial disaster if they don’t fulfill their potential.