How to invest in web3

What Is Web3 and How to Invest In It? – WorldFinanceMarkets

In recent years, web3 projects have shown tremendous value gains. People who managed to invest in the artificial intelligence project in the early stages received thousands of percent of the profit in some cases. Nevertheless, such returns come with risks. To invest in web 3.0 wisely, you will have to learn how to invest in web3.0 and get outside of decentralized technologies.

What Is Web3?

What Is Web3?

The terms web 1.0, web 2.0, and web 3.0 symbolically denote the stages of the development of the Internet. At each stage, the behavior patterns of users, companies, and content developers changed. In the first stage of Web1, the Internet included pages with purposes only static. Users who did not have technical skills failed to create content and were its consumers. The web 1.0 stage lasted from the beginning of the Internet spread until the mid-2000s.

Next was the time of the web 2.0 stage. Social networks appeared and people surfing the Web were able to create content on their own. The main attention was drawn to the materials created by common users, namely:

  • YouTube videos;
  • public pages;
  • groups in social media.

We are in the web 2.0 stage. There are lots of complaints about the Internet system now. The largest meta platforms are under the control of giant corporations. They are accused of data trading, censorship as well as profit from the monetization of user content.

The third stage is to solve the problems. Web 3.0 developers transfer them to users for management. They make development decisions and share the profits. The corporations that control the project and take the money for themselves are excluded from work.

Benefits of Investing in Web3

Investing in these technologies is characterized by several benefits, namely:

  1. Profitability. Individual web3 projects brought investors more than 10,000% profit in 2021. Most Web3 startups have lower numbers but exceed 1000%.
  2. Promising outlook. Many analysts consider Web3 to be the start of a grand era in its formative stage. Investing in decentralized technologies has been compared to buying shares in Google, Tesla, or Microsoft at the start of a company.
  3. To invest in decentralized developments, it is not necessary to open brokerage or bank accounts. Cryptocurrency wallets on a computer or phone are enough.

You can buy shares of web 3.0 stocks through decentralized exchanges from anywhere in the world where there is an Internet connection. A full-fledged trade will not require the citizenship of a particular country. Completely anonymous attachments are possible.

Investment Methods

Web3 Investment Methods

There are several ways to invest in web3 projects. The investor will be able to choose the appropriate method for himself/herself.

Company Shares

The regular stock exchanges trade stocks of companies that could benefit from Web3’s growth. On the NASDAQ, you can buy shares of the Coinbase (COIN) cryptocurrency exchange. It deals with cryptocurrencies. Cryptocurrencies issued by web3 projects are available on the Coinbase list. The exchange could benefit from the growth in trading volumes of web 3.0 assets.

Unity Software (U) has created a platform for developing computer games, 3D content, and augmented reality technologies. The company’s products will be in demand at the third stage of Internet development.

Block (SQ) implies a financial technology giant that implements cryptocurrencies payments into its products.

Many companies can benefit from the growth of new technologies other than those listed above. These companies produce computer components and create financial services and data protection technologies.

Tokens and Cryptocurrencies

Tokens and cryptocurrencies assist in investing in web 3.0. You can enter them through centralized exchanges (Binance.us, FTX.pro, Coinbase) or decentralized platforms (Uniswap, PancakeSwap, Serum DEX).

The token implies the user’s share in the project. In other words, it is an analog of a company’s stock to buy.

On the centralized exchange, you will need to register and confirm your identity with documents. Then you can replenish the balance with a bank card or PayPal. Centralized cryptocurrency exchanges provide clear, interactive instructions for new users to purchase digital assets.

You will need to connect a cryptocurrency wallet (MetaMask, Trust Wallet) to decentralized exchanges. Ethereum is the most popular cryptocurrency on decentralized exchanges. After connecting the wallet with Ethereum on balance, you can start operations.

Going into Web3, you should take a closer look at the following projects:

  1. Theta is a decentralized video streaming service. In the new era of the Internet, it is going to become a decentralized analog of YouTube or Twitch. Google, Samsung, Sony, and other companies are involved in ensuring its work.
  2. Filecoin is a decentralized data storage project. For full decentralization and independence from large corporations, Web3 will have to abandon the services of Amazon Web Services and its competitors. Filecoin claims to be the largest decentralized cloud storage for files.
  3. Chainlink assists in connecting decentralized networks with the “outside world”. Chainlink can transmit information about exchange rates, weather, outcomes of sports matches, and stock quotes to a decentralized environment.
  4. Audius is a platform that allows musicians to give fans access to music without intermediaries. Audius provides its clients with a reward system for authors whose music interests users.
  5. Polkadot combines decentralized projects into a single ecosystem and allows them to interact with each other.

Nowadays, there are more than 5,000 projects in the Web3 industry. Most of them are at the beginning of the journey and can be real “pearls” that are sold for minimal money.

Non-Fungible Tokens (NFT)

Non-fungible tokens (NFT) give ownership of virtual values. Art objects, game items, and elements of virtual reality worlds can be sold in the form of NFTs. They can be a good way to invest in web 3.0.

An example of NFT values ​​is virtual land plots in the Decentraland project. Players bought the most expensive lots for $2,400,000 and $1,090,000. One lot was sold for $2,330,000 in the decentralized game Axie Infinity.

Investing in NFTs can be done on specialized platforms (OpenSea, SuperRare, Rarible) and cryptocurrency exchanges (Binance). They are often sold internally within a particular game or virtual world.

Core Principles for Investing in Web3

Core Principles for Investing in Web3

The principles of traditional investment apply to investments in digital assets.

Don’t Invest Without Full Understanding

Before investing in cryptocurrencies, tokens, or shares, it is worth understanding how to invest in web3.0 and how the project works, and what the viability of the developers’ ideas and prospects are. Study carefully the documentation and discussions of the community. They are held on Reddit and the team’s resources.

Don’t Start With Huge Cash Amounts

Such investments are associated with increased risk, so the first investment should be small. The majority of Web3 startups sell their tokens for less than a dollar at the start. You can build a diversified portfolio for little money after studying how to invest in web3 crypto in the article.

Don’t Invest in One Asset

At the initial stage, it is impossible to know which new company will “shoot”. Therefore, it makes sense to buy low and sell the “broad market” rather than a single token.

Be Ready to Lose Money

Investing in decentralized startups comes with a lot of risks. The cryptocurrency market has repeatedly shown huge collapses, from which it can recover for years. At such moments, everything falls, regardless of the developers’ prospects and ideas.

Bottom Line

The first investment opportunity in Web3 is best made with money that you don’t mind losing. It is reasonable to increase the number of investments after gaining experience in working with these assets. There are many prospects for good profits, but everything needs to be done wisely.

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