Blockchain technology remains one of those profound innovations that can be tough to comprehend. Indeed, blockchain tech, while profound, can be tough to understand, at least until one has had a chance to see it put to work on various applications. In some ways, it’s like the metaverse, whereby one has to try before they can fully appreciate the technology under the hood.

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

Unless you own Bitcoin (BTC-USD) or non-fungible tokens (NFTs), you are probably unaware of blockchain technology’s full capabilities. The key takeaway is that blockchain technology allows for decentralization and next-level security.

For now, blockchain is synonymous with cryptocurrencies. But in the future, it may grow to become a larger, more impactful theme. Here are three of my favorite blockchain stocks to play it.

Coinbase (COIN)

Coinbase Global (NASDAQ:COIN) may be one of the top crypto plays in public markets for many investors seeking a convenient proxy to play some sort of Bitcoin bounce. It’s far more than just an exchange platform, though. Coinbase stands out as an innovator that’s keeping the blockchain tech rolling along.

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

Indeed, there are a slew of digital wallets out there. However, what separates Coinbase from the pack is its blockchain expertise. If blockchain technology holds the keys to the ultimate digital wallet with the best security and seamless peer-to-peer transactions, Coinbase stands out as a horse worth betting on.

After surging 188% in the past year, COIN stock is red hot and starting to get expensive at a trailing price-to-earnings (P/E) of 44.11. Given the blockchain tech you expose yourself to, perhaps it’s worth braving the momentum and elevated sticker price for this blockchain stock, especially if you believe in crypto and the tech that powers it.

International Business Machines (IBM)

For a relatively mature company, International Business Machines (NYSE:IBM) actually has its hand in many high-tech pies. From artificial intelligence (AI) and quantum computing to blockchain, IBM is innovating in some of the most exciting areas of the emerging tech universe. Still, the stock does not trade like it’s on the cutting edge of tech, with IBM stock going for a trailing P/E of 17.7.

Perhaps IBM’s reputation as a laggard in the past decade is a contributing factor behind the stock’s seemingly discounted multiple. Aside from AI, IBM is exploring the potential behind blockchain technologies with various projects that could help put the technology to use in industry.

With interesting projects seeking to unchain the power of blockchain in specific industries (think Project XCEED for the auto industry), perhaps IBM is the blockchain stock to watch.

Block (SQ)

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

Indeed, it’s hard to know what’s really happening with TBD, Block’s “black box” of sorts. However, I do know that the company has shown that it is serious about the potential of blockchain technology. First, the firm changed its name from Square to Block back in 2021, and second, the company has “a stake in the future” with its stake in Bitcoin.

At a forward P/E of 19.4, SQ stock looks absurdly undervalued. Until Block breaks ground on something truly unique, it will be tough for the firm to regain the attention of investors now that it’s down close to 77% from its bubbly peak of 2021.

On the date of publication, Joey Frenette did not hold (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.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.