Forget Ethereum: These 3 Cryptos Could Beat It in 2022

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Ethereum (ETH) is the second-biggest cryptocurrency by market cap and is by far the biggest smart contract crypto. Smart contracts are tiny pieces of code that live on the blockchain and make it possible to develop applications. This functionality means many decentralized finance and other applications are built on Ethereum's blockchain.

In recent years, Ethereum has lost some of its first-mover advantage. Not only does Ethereum struggle with network congestion and high fees, but many newer blockchains are faster and more scalable. Ethereum is in the process of a major upgrade, but in the meantime, several so-called "Ethereum killers" continue to take market share.

The following three cryptocurrencies are available from top cryptocurrency apps and exchanges and could beat Ethereum in 2022.

1. Cosmos (ATOM)

Cosmos calls itself the "internet of blockchains." It's a smart contract platform that's focused on interoperability. Interoperability lets blockchains communicate with each other and is fundamental to the development of the entire crypto industry. Without it, it would be a bit like having cash in one bank account that you couldn't move to an account with a different bank.

The blockchain landscape is changing -- rather than having 90% of applications built on Ethereum, they're now being built on several different platforms. It's likely that five or six will eventually come out ahead. This makes interoperability even more important and is one big reason why Cosmos could outperform Ethereum in 2022.

According to Cosmos's website, there are over 260 apps and services on its network. These include big names like Binance Chain and Terra (LUNA). This isn't as impressive as the thousand-plus apps on Solana (SOL), but it still marks Cosmos as a key player.

Chainlink is a behind-the-scenes cryptocurrency that often gets overlooked in the race to find the latest big thing. However, it plays a crucial role in smart contract execution and could appeal to long-term investors.

Smart contracts execute automatically in set circumstances, but they need accurate information to trigger them. For example, let's say a farmer sets up a smart contract insurance policy against extreme weather conditions. In theory, that policy should automatically pay out if those conditions occur. But that will only work if there's a reliable data feed with specific information about the weather in that particular farm.

This is where Chainlink's network of oracles come in. They can monitor the weather, track interest rates or crypto prices, follow sports results, and much more. As smart contracts continue to gain traction and projects find more uses for them, Chainlink's oracles will be increasingly necessary.

3. VeChain (VET)

VeChain is a crypto with a solid real-world use case, making it an excellent token to put on your watchlist. VeChain initially established itself by using blockchain to solve supply chain issues. Several big companies such as BMW and LVMH use its supply chain solutions. For example, Walmart China uses VeChain to track products such as fresh fruit and meat. As a result, those foodstuffs are completely traceable -- if there's an outbreak of E.coli, the source could be quickly identified.

VeChain has since expanded its mission to include a range of business-focussed applications. This includes a partnership with PricewaterhouseCoopers to help its clients use blockchain technology.

Don't ignore Ethereum

These cryptos all have a good chance of performing better than Ethereum in 2022, in part because Ethereum has been around since 2015 and has already seen incredible gains. More importantly, they are solid projects with strong leadership and use cases.

Crypto prices have struggled so far this year, and we may be in for a prolonged period of low prices. Rather than looking for cryptos that might beat Ethereum in the short term, focus on cryptos with solid fundamentals that might perform well in the long term. These will also be better positioned to survive a crypto winter if it comes.

Finally, crypto investing is rarely an either-or decision. It isn't a question of Ethereum or Cosmos -- there could be space for both in your portfolio. Many financial experts advise keeping a large proportion of your crypto portfolio in Bitcoin (BTC) and Ethereum as these are the safest bets in what is a very risky asset class.

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Emma Newbery owns Ethereum, Cosmos, Solana, Terra, Chainlink, VeChain, and Bitcoin.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool owns and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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