Also known as Web 3.0, Web3 is a significant phase related to the evolution of the Internet. This will bring decentralization, more openness, and greater tools for users, making it very important to know how to invest in Web3. Cryptocurrencies, NFTs, and the metaverse will play a big role in this new phase.
Understanding the Meaning of Web3
Web3 is the third phase of Internet evolution. This one is expected to be more similar to the first phase (Web1), the beginning of the World Wide Web. Decentralized protocols define both phases because their users run them.
Users will become owners in this new phase. Instead of using free apps developed by specific companies like during the current Web2 phase, people will be able to create and operate the protocols themselves. This ownership will be represented with cryptocurrencies or digital tokens networks known as blockchains.
For example, holding a certain amount of network tokens would give the user a certain operation or governance over the network. This works just like stockholder voting allows its holders to vote for certain corporate actions.
How is Web3 Being Built
Different software, applications, and networks are working together to build this new phase of the internet. Too understand better, Web 3.0 is split into different stages or layers, and every part of it has an important role.
The top layer, known as Access Layer, is the entry point for users into Web3. This software competes to provide the best user interface and customer service. Some examples are Brave, Opera, Axie Infinity, Decentraland, and OpenSea.
A middle second layer includes decentralized applications used for specific tasks, which create new applications combined. Most are incorporated for consumer services, like security, shopping, government, or transactions.
The ground layer or foundation is the one that refers to blockchain platforms, such as Bitcoin or Ethereum. They maintain a distributed ledger and allow applications to build from them. Most devs work on this layer because it’s the most valuable in Web3.
Another layer is also found between the middle and ground one, which refers to different add-on technologies that make the ground layer scalable. These bridges allow platforms to port their tokens, such as Lightning Network for Bitcoin and Polygon for Ethereum.
How Will Web3 Transform the Internet?
Users gaining control and becoming owners might be the main and probably most significant change, but other features need to also be highlighted.
It’s expected that user experience in Web3 will be hugely personalizable, meaning results will vary depending on user preference and needs. Each user will have a “unique identity” which will be used to access and control their assets.
These changes make people expect a more democratic Internet, with more liberty of expression, privacy, decentralization , and economical changes.
Benefits of Industries Adopting Web3
While gaming is probably the industry that most benefits from Web3, it is not the only one. Other ones are beginning to explore these new ways and create valuable businesses. This is how these sectors can benefit from Web 3.0:
Fashion/Luxury
Brands that invite their audiences to contribute in different ways, playing an active role, will best adapt. Some have started to do this, like Hugo Boss, by releasing of a TikTok challenge that could allow people to win NFTs. This generated more than 7.5 billion views and 3 million hashtags.
Other customer loyalty programs that give users the chance to win free items if they share certain stories are trending topics to allow people to participate actively.
Social Media
Twitter has implemented some features for Twitter Blue in iOS that permit accounts to showcase NFTs and their NFT profile avatars. This tool also works to search for selling and searching new artwork, being a central part of a community building.
This community construction is very important for Web3 since this phase is oriented to have communities instead of clients.
Public sector
Web3 can hugely improve the public sector and everything related to the government, bringing many benefits to its citizens. It can make services way more efficient and expand access for almost anyone.
A simple example is governments using Web3 to create digital identities for their citizens. These digital IDs would be used for many sectors, such as healthcare, security, and education. With the proper research, voting systems could be done with blockchains too, allowing a more transparent and legit process.
Entertainment
Entertainment not only refers to video games since there are other ways to approach it with Web3. For example, globally known pop singer Justin Bieber held a virtual concert for 30 minutes in a meta-universe called Wave.
This new way of sharing music or using celebrities allows fans to engage even more with their favorite artist, selling more tickets and merchandise.
Healthcare
The entire health system can benefit from a more efficient Internet and technology service using Web3. For example, doctors will be able to provide a secure and immersive experience using cameras and computer vision to monitor their patients.
Art Industry
Probably the most advanced industry mentioned, the artistic sector has already begun experimenting with the future of Web3. This creates new ways for buyers and artists to share, buy and sell art on a huge digital market.
Additionally, NFTs can be showcased through digital art galleries created thanks to Web3, where purchasers will be able to check what they want. Unfortunately, while it has been progressing for good lately, there’s still a vast divided community regarding the impact of NFTs in society.
How to Invest in Web3
Web3 does not only involve cryptocurrencies. Traditional companies are also included. Users have two assets to choose from, equities and digital assets. Of course, there are no limits when choosing, which means users can pick both options.
Once users choose the companies and projects they want to invest in, it’s time to monitor and rebalance it to earn. This can be done in two ways: passive investing and active investing.
Passive Investing
When choosing passive investing, buyers get a personalized portfolio adapted to their needs or what they desire. This is often known as an index. For those looking for good Web3 projects to invest in through passive methods, Metaverse ETFs like METV and crypto Robo-advisors are the most requested.
Active Investing
Active investing is manually selecting the assets the user wants to invest in and constructing an own and self-made portfolio. Facebook’s Meta (FB), Coinbase (COIN), and Block (SQ) are the top three stocks today and the most popular from Web3.
Experienced investors also categorize some Web2 projects for potential Web3 and Metaverse portfolios since they’re assumed to join sooner than later. These are Apple (APPL) and Amazon (AMZN), two digital technology giants.
Best Digital Assets to Choose From
There are thousands of digital assets to pick from, so it’s essential to realize a deep search and know where to invest. Identifying the different projects from Web3 can be exhaustive, but some tools greatly simplify it.
CoinMarketCap, DappRadar, and Defi Llama are among the best tools to filter assets by category or metrics. This includes industry, blockchain, algorithm, market cap, volume, and total value locked.
The best results for each category are:
- Market cap: Bitcoin and Ethereum
- NFT Volume: Bored Ape Yacht Club and CryptoPunks
- Total Value Locked: Ethereum and BNB
- DAOs: MakerDAO and BitDAO
- Proof-of-Stake: Solana and Cardano
- Metaverse: Decentraland and Sandbox
Other Good Web3 Stocks to Invest In
Web3 offers many business investment opportunities that are worth checking. These are the companies most suitable to do so since they have earned a good degree of crypto public support:
Coinbase: founded by a former Airbnb engineer, this site became the go-to place for crypto trading and worked as the gateway into the crypto world. Since the company decided to start betting on decentralization concepts, it became one of the best investment options for Web3 enthusiasts.
Apple: involved in most of the most innovative technological products in the last decades, Apple is one of the most profitable companies in the world. While they haven’t directly supported blockchain tech or Web3 projects yet, it is only a matter of time. Most investors are getting ahead and choosing Apple for the future.
IBM: its commitment to AI and analytical software will hugely impact the development of Web3, making it a clear option to invest in. They will have an impressive role in the world when the project becomes a reality.
How to Allocate Investing Assets Properly
After deciding or picking what assets to invest in, it’s essential to determine the categories of each one that conforms to the portfolio. This helps to achieve a balanced Web3 assets portfolio and optimize a maximum return with a determined level of risk.
By intuition, users can choose their position sizes based on conviction or risk tolerance. Doing this is only recommended when holding just a few equities and digital assets representing a large percentage of the portfolio (30% at least).
For those who prefer optimizing for risk, setting a percentage limit for every asset (around 5% for each) is essential. The longer the time invested in it, the higher the risk tolerance is expected to be. It’s crucial to remember that if the building blocks of the Web3 space fail, everything could crash.
Investing Safely and Secure
Knowing how to invest in Web3 and the risks of scams are essential. Since it’s a very new world for many people, inexperienced users can be victims of cybercriminals.
To invest safely in Web3, users should check every currency they are going to buy in CoinMarketCap. This site has a massive list of currencies for Web3Project, with the prices and places to obtain them.
After choosing the currency, it’s vital to choose the platform to buy it. First, make sure it’s a legit one. Most secure sites offer different levels of reliability and liquidity. While it is always easy to buy with USD, it’s possible to do it with cryptocurrencies.
Creating a crypto wallet that admits Web3Projects is necessary to do any transaction. Almost every site has detailed guides to buy, with simple and clear instructions. If not, checking different youtube guides or blogs made by fans can be of great help.
The Relation Between Metaverse and Web3
When investing in Web3, users directly or indirectly invest in the metaverse. Web3 uses all the tools and technology from it, along with NFTs, blockchain ledgers, and cryptocurrency.
All this work invested also needs a lot of computational improvement and efficiency, along with high-end PCs. It’s estimated that it needs to be at least 1000 times above the current level. Cloud services, 5G wireless signals, gaming platforms, and networks will all play a significant role in achieving this goal.
While Web3 metaverse is still in the development stages, giant businesses like Walmart (WMT), Disney (DIS) and, Nike (NKE), Mcdonald’s (MCD) are working on it. In addition, other brands like Adidas and Samsung are also jumping into these platforms, expanding the assets for users to pick from.
In addition, Web3 and Metaverse are entirely compatible, potentially enhancing each other. This creates entirely new financial systems.
Conclusion
It’s normal to ask how to invest in Web3 since it’s in its early stages, and few people know what it means.
This new stage or phase of the Internet will slowly change how people search, buy or sell their stuff on the Internet, along with many other things. Gaming, music, fashion brands, and even public services will be affected, merging with technology and allowing more efficient ways to interact.
