Web3 is a term dominating the tech industry that represents a new era of the internet. If you are a frequent user of the internet, you’ve most likely seen the term plastered in many different spaces and now you finally want to know what it’s all about.
What is Web3?
Web3, Web 3.0 or Web 3 is not an entirely new idea. To fully grasp where it comes from, we need to take a look at the background of the internet.
When the internet was first introduced in the 1990s, it was not very interactive. It consisted of static pages such as blogs and message boards with a focus on information delivery. Generally speaking, this content was only delivered by a select few. This form of the internet is called Web1 (or Web 1.0).
Following Web1, came Web2 (or Web2.0 as originally called). This internet enabled users to also generate their own content. The greatest symbol of Web2 is social media, which allowed users to communicate with each other from any corner of the earth. User-generated content became highly profitable, but because the infrastructure of Web2 is highly centralized, the companies who own platforms keep most, if not all of the money for themselves. Some people call this version of the internet “read/write”.
Web3, the much-raved about upgrade of the internet, is sometimes called the “read/write/own” version of the internet. It enables us users to be stakeholders in the platforms we use. Web3 replaces the need for corporate platforms with centralized power, replacing them with open protocols.
Web3 places great independence on our privacy, it gives users full ownership of their data to use as they please. On Web2, we generally don’t have access to this data and it’s sold all the time to sources that we aren’t aware of. Web3 transfers power from corporations to users so that we are no longer just customers or products but active participants and shareholders.
How can I invest in Web3?
There are many different technologies being built on Web3. To know what to invest in and make the best investment decisions you need to be aware of these technologies. We’ll give you a breakdown of Web3 technologies and their use cases.
Web3 technologies and use cases
As we progress further into development, the use cases become more clear and new uses cases are discovered.
Here is a list of web3 technologies:
- DeFi: Decentralized Finance
- NFTs: Non-fungible Tokens
- DAOs: Decentralized Autonomous Organizations
- dApps: Decentralized Applications
DeFi: Decentralized Finance
Decentralized Finance was the first web3 technology introduced to the scene with cryptocurrencies such as Bitcoin. It aims to revolutionize the finance industry by removing the need for middlemen, from banks to payment processors.
It is said that by doing this there will be more transparency as to where money is going. For instance, you would be able to see where your government is allocating funds with the exact amount.
DeFi will also be helpful for unbanked people and those who live in sanctioned country. Rather than being completely blocked off from being able to interact with the traditional financial system, these people will be able to access money as needed.
By using cryptocurrency on DeFi platforms, you are able to transfer, loan, invest, trade money and more.
NFTs: Non-fungible Tokens
Non-fungible tokens can be used for a number of purposes.
They are a class of digital assets that are each completely unique.
When you own an NFT, it showcases that you are the official owner of a certain asset. This could be a digital artwork, music or event ticket. NFTs could also be used to verify your skillset, like a graduation certificate but completely digital.
DAOs: Decentralized Autonomous Organizations
A DAO (or Decentralized Autonomous Organization) is a group of people who come together to pursue a shared mission.
What makes a DAO different from any other organization is its structure. Unlike the hierarchal structure of traditional organizations, a DAO has a “flat” structure. By using this structure, all members have equal control. Therefore, decisions cannot just be carried out by a single member.
To make this possible, DAOs use a form of technology called a smart contract. It is a fully transparent way to collect votes and cannot be edited unknowingly.
dApps: Decentralized Applications
Decentralized Applications differ from ordinary applications as they prioritize decentralization.
There are a range of dApps, including social media and gaming dApps. What makes them powerful is that they allow us to connect without a central authority. As opposed to collecting and selling our data, dApps rewards their users for being active.
What’s more, is that you can easily connect them to your crypto wallet and directly tip creators for their content without worrying about high processing fees if it happens to be a cross-border payment.
How do I invest in Web3?
The most important thing to do before you invest in Web3 is to do your own research. Not every project will deliver on its promises, so it’s useful to look into the project’s history as well as the history of the founders to see their track record.
When investing in Web3, ask yourself which technology you are most interested in.
If you are interested in DeFi, you can invest in DeFi protocols or only cryptocurrencies.
If you are interested in digital artwork or digital collectibles, you can invest in NFTs.
You can also invest in DAOs building applications, for example: social media platforms.
You can discover numerous Web3 projects on platforms such as Coinmarketcap or CoinGecko.
Where do I invest in Web3?
When you invest in Web3 you buy shares in the form of a crypto token.
There are several places to buy crypto tokens. Here’s a list of places to invest in Web3:
Digital art NFT investments:
Music NFT investments:
DeFi, DAO and dApp investments:
- Huobi Global