Reasons to Invest in Web3 and How to Do IT?
New York City: Investors and businesses are well aware of how important it is to use new and innovative technology in the digitally agile market of today. The internet is always changing, just like every other business and industry.
Users of the first web version (called Web1) could mostly just read the content. The second web version (Web2) has given us more ways to read and write. But with Web3, users can look at the range, publish it, make their own, and own it.
What Makes Web3 So Interesting?
Some people say that Web3 will completely change the way the web works. Web3 development company is growing very quickly, being in its early stages. There are many ways to invest in this new and evolving technology. This blog will look at some of the best and most profitable ways to support Web3.
How Did Web3 Start, And What is it?
In 2014, Ethereum co-founder Gavin Wood was the first person to use the term “Web3.” He said it was a “decentralised digital ecosystem built on blockchain.” It is a new kind of internet that mixes the old and the new. It aims to become a decentralised version of the virtual community.
Instead of being built, run, and owned by big tech companies, Web3 is being constructed, run, and owned by its users. It uses Blockchain, cryptocurrencies, and non-fiat tokens (NFTs) to give control back to the people instead of big businesses and tech companies.
Instead of being paid the usual way, engineers and developers at Web3 are paid in crypto tokens. Web3 users also have the freedom to choose which projects they want to back up and the chance to make a lot of money by investing in Web3 projects.
The Web3 Ecosystem
Since we know that Web3 has a lot of money-making potentials, let’s look at the protocols, networks, and apps making it happen. Even though Web3 is self-governed, its strength is being modular and able to work with other systems.
Composability is the ability to combine assets and protocols to make more complex applications. Composability makes it easier for programmers to make great products, eventually bringing more people into the sector. This is meant to encourage more investment in Web3 ecosystems and help people understand how its modular parts work.
Layer 0: Layer 0 is made up of platform-neutral protocols and virtual machines that can be used to build blockchain networks. Even though layer 0s are not natural resources that can be invested in, they may lead you to channels with many users.
Layer 1: Blockchain systems like Bitcoin and Ethereum that allow apps and tokens to be made on top of a distributed ledger are called layer 1s (L1).
Layer 2: is the name for add-on solutions that mostly make Layer 1s stronger (L2). Cross-chain gateways are also part of L2s. These let other platforms move their tokens between Ethereum and other networks.
Layer 3: comprises decentralised apps (dApps) that can do users’ complex tasks. These are sometimes called stand-alone apps that consumers use to communicate directly. But Layer 3s are mostly utilised as parts that developers choose for their products that end users see.
Layer 4: Users often start their Web3 experience at Layer 4, the top layer in the hierarchy. So, instead of competing based on how good they are at technology, several of Layer 4’s parts try to provide the best user experience and customer service.
How to Invest in Web3
If you want to own a piece of Web3 and hope to make money from it, you can invest in a few different ways:
Investing In Cryptocurrency
When most people think of Web3 investments, cryptocurrency is probably the first thing that comes to mind. The most obvious way to invest in Web3 is to buy and sell virtual currency.
You could invest in cryptocurrency by mining it if you know how to work with computers. Another way to make money with crypto coins is to “stake” them. It lets you make money by just holding on to your cryptocurrency.
Investing in Web3 Stocks and Companies
Because Web3 is getting more attention and interest, more and more tech companies are getting ready for this new phase of web technology, which could change the outlook for the economy as a whole.
Some companies, like Microsoft, are already traded on the stock market, and you can make money by buying shares of those companies. You can purchase stock in Web3 companies or invest in startups making services related to Web3.
Investing in NFTs and the Metaverse
Those who support NFTs and the Metaverse will learn about Web3, making it easier for NFTs and the Metaverse to develop. Another way to invest in real estate is to use NFTs to buy “property” in the Metaverse. This is risky, though.
Because they are unique, NFTs will have huge potential value in Web3. It can be used as a medium of exchange in the Metaverse to buy, rent, or swap things. NFTs can also be used to paint pictures, play games, store money in an electronic wallet, and do many other things.
Investing in Blockchain technologies like Ethereum and Polkadot
Another way to support this is to gamble on projects or Blockchains that will provide a stable base for upcoming Web3 dApps. The main one would be Ethereum, but because its prices are so high, other options like Polkadot are much more practical.
Active vs Passive investing in Web3
Passive investing means buying a portfolio that has already been put together. This is sometimes called an index. Web3 passive investors can buy Metaverse ETFs or use a Robotic assistant for cryptocurrencies. Active investing, on the other hand, means picking stocks and digital assets that you think will do better than the stock market in the long run. But Web3-focused valuation indices are still small, but they are becoming more and more important.
Blockchain, dApps, and Web3
There is no way to separate user engagement, Blockchain, and decentralised apps (dApps). Users must be able to respond directly to peers without a firm gathering and sometimes be able to limit data along the way. But how can an application work without the help of a business? This is done by putting smart contracts for dApps on a public blockchain like Ethereum instead of a commercial database.
A public blockchain system makes it possible for dApps to help anyone without the help of a company. Web3 shows how a DeFi app connects users, while a typical financial app connects each user to a financial organisation.
Who is going to build Web3?
Visionaries and investors are trying to ensure that their current tech investments will still work in the coming era of technological revolution by finding and investing in Web3.
Venture capitalists and big tech companies are the most well-known investors in Web3. They see Facebook’s decision to change its name to Meta as a sign of how well Web3 is being accepted.
Gavin Wood also started the Web3 Foundation in Switzerland, which helps Web3 projects get money and training. The organisation has given money to more than 300 projects in more than 50 countries.
Web3 and the Individual
From a philosophical point of view, Web3 encourages individual user engagement. So, most Web3 projects put a lot of emphasis on their first white paper, which explains how many of their tokens (and the possible money and power that come with owning tokens) can be bought by anyone.
Also, companies sometimes “airdrop” free tokens to certain communities to get people interested. The most common way to invest in Web3 technology is to buy, earn, or receive Web3 project tokens, which draws people to it.
Web and Metaverse
In reality, Web3 and Metaverses are a great match because Metaverse users mostly interact with other users. Metaverse community members are often asked to help with the governance and development of the environment.
Metaverse development company might be able to create a set of safety measures for a thriving economy in which people can share their biometric and confidential information safely and interact with Metaverse content.
What Else Does Web3 Promise?
As a technology stack rather than a clearly defined framework, Web3 can be used in almost any way. In addition to banking and Metaverse dApps, Web3 offers social networks, games, instant posting, and other apps.
How much Web3 gives users power will depend on how involved users are. The most successful Web3 projects will be ones where people want to be a part of the community, are willing to contribute content, and want to give feedback.
It’s hard to say how quickly Web3 will develop and what the investments made by Big Tech and venture investors will mean for the future of the World Wide Web. But it’s clear that big companies are taking this change seriously and that many powerful and wealthy people believe in the utopian vision of an internet that moves users from digital “for rent” cubbies to the owner’s couch.
Get in touch with our experienced web3 development team to grow your successful Web3 idea.