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How to invest in Web3?

Author: silvia.zhang Date: 2023-05-30 11:31:30

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The term “Web 3.0” (or “Web 3”) refers to the new, user-focused version of the internet that incorporates cutting-edge ideas like decentralization, blockchain technology, virtual reality (VR), artificial intelligence (AI), and augmented reality (AR). It is a decentralized version of the internet that aims to improve monetization, lessen exposure to data manipulation, and allow users to better govern their data consumption and sharing. The goal of Web3 isn’t necessarily to replace our current internet, but to incorporate these technologies into the current infrastructure so that anyone can use the internet without restriction.

There has been a lot of talk in recent years about Web3 and the opportunity it provides for investors. While Web3 investment opportunities have become an industry term, many people are still unaware of their significance and how they might be a passive or active investor in Web 3.0. Cryptocurrency and NFTs are examples of active investment alternatives, whereas equities of companies actively involved in Web 3.0 are alternative investment options.

What is Web3?

For a better understanding of what ‘Web3‘ means, let’s go over a brief history of the Internet and define the terms Web1, Web2, and Web3.

Web1 refers to the Internet’s early days. Many businesses and content creators developed their own websites during this time period in order to reach customers all over the world. The sheer volume of content on the Internet, on the other hand, makes it difficult for consumers to find relevant products, services, and content.

Web2 witnessed the introduction of large aggregation platforms such as Google, Facebook, YouTube, and Instagram to assist users in readily finding relevant content and sorting through the Internet’s noise. While Web2 expanded their reach, businesses and artists lost ownership of their data and were frequently at the mercy of these large aggregator platforms. A simple algorithm change or an inexplicable ban could result in a massive revenue loss.

Web3 represents a future in which businesses and content providers can reach global audiences while preserving control over their data. Rather than relying on aggregation platforms to generate audiences, producers may utilize the blockchain to directly reach and monetize audiences and potential customers.

How to invest in Web3?

There are various techniques to investing in Web 3.0, either passively or actively. Both tactics have advantages. Passive investments allow you to hold your virtual assets indefinitely and gain value from them. Actively investing will put you on the path to assisting in the development of Web3.

  • Web3 Tokens/Cryptocurrencies

Web3 transactions are anticipated to be facilitated by blockchains that support NFTs and decentralized protocols. As a result, many Web3 advocates invest in cryptocurrencies that enable these blockchains to operate. Cryptocurrencies are adaptable digital assets that may be used as both a medium of exchange and a store of value.

Investing in cryptocurrencies like Bitcoin, Ethereum, Solana, Litecoin, and others is a terrific method to generate passive income and hedge against inflation. Alternatively, while not exactly an investment, you can nevertheless benefit greatly from crypto mining.

  • Web3 Projects Funding

If you have enough money to do so, you should think about investing in web3 projects. The stock market, as expected, provides a means to invest in Web3. It should be noted, however, that there are no ‘pure’ Web3 companies listed on public exchanges. On the contrary, investors will need to select firms that are experimenting with Web technologies in addition to their primary business model. These initiatives are centered on cybersecurity, blockchain, metaverse, virtual reality, artificial intelligence, and machine learning. They may explode in relevance as blockchain technology is adopted in the mainstream.

  • NFTs

NFT is another important component of Web3. As a result, NFTs are a potential option to obtain early exposure to the rise of Web3. For those who are unfamiliar, NFTs are digital assets developed on top of the blockchain network, comparable to crypto tokens such as Bitcoin and Ethereum. The essential distinction is that NFTs are not fungible. As a result, because an NFT symbolizes ownership of a specific object, it cannot be copied.

  • DeFi

When deciding how to invest in Web3.0, a further aspect to consider is DeFi. The primary idea behind DeFi is that finance should be decentralized. This means that customers should be able to get fundamental financial services without going through a centralized operator. Currently, some centralized organizations are starting to explore the potential of decentralization. For example, Phemex is building its decentralized Web3 world of Phemexia, which combines both the benefits of decentralized and centralized crypto exchanges to reach a new level of transparency.

Conclusion

Web3 is intended to push the internet as we currently know it to new heights. This means that in the coming years, the internet will not only provide lightning-fast capacity and even greater connectivity, but also a new manner of accomplishing regular tasks.

When studying how to invest in Web3, one of the most crucial elements to examine is whether or not this industry has the ability to provide adequate returns in the long run. After all, Web3 is merely a concept at this point that combines various developing technologies under a single umbrella. Always remember to do your own research before investing and choose the trustworthy web3 partner.


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