The Internet has connected the world in more ways than any other technology. However, as people become increasingly concerned about their data and privacy, the current state of the Internet appears inadequate. There are serious concerns about how large companies process and monetize user data, creating a need for a better or alternative internet. Web 3.0 is an alternative that is becoming increasingly popular as it puts the power of the Internet back into the hands of the end user. In this guide, we've answered frequently asked questions about Web 3.0 investing in a way that even novice investors can understand.
How to invest in Web 3.0
Web 3.0 offers investors a variety of investment vehicles that can cater to different risk preferences. Nevertheless, like any other form of investment, investing in Web3 carries risks and should only be undertaken with proper research and a good strategy.
The most common Web3 investment options are stocks, cryptocurrencies, and NFTs. However, you can also consider less popular investment methods such as angel investing or buying into a cryptocurrency company's IDO (Initial DEX Offering) or ICO (Initial Coin Offering). Either way, you invest in a company by participating in a seed round or buying its coins before launch.
One thing to note is that most of the Web3 investments are story-based. Investors will spread the word about what companies are doing to grow their Web3 ecosystem. However, you shouldn't rely on stories when making decisions. Because some Web3 influencers push a good story about a project to get people to buy in about it, and then they end up abandoning the project. Instead, focus on investments with a reasonable past track record, like these three options.
Invest in stocks related to Web 3.0
Stocks are one of the easiest ways to get into Web3, especially gaining some Web3 knowledge. Some companies actively involved in Web3 are Web2 companies with multiple revenue streams, so they may not be affected by Web3 downturns like the Web3 stocks below.
- Coinbase (COIN): Coinbase is a top Web3 stock for anyone looking to invest in Web3. American crypto exchanges serve as key stakeholders in the crypto ecosystem, facilitating the conversion of cryptocurrencies to fiat and offering comprehensive wallets that support NFTs.
- Meta: Meta may have caused a stir when it changed its name from Facebook, but it's still a significant player in the Web3 space. Currently, Meta is building two metaverses: Horizon Worlds and Workplace, one for gaming and one for collaboration, respectively.
- Apple (APPL): Apple plans to launch augmented reality (AR) glasses to help people better experience the Metaverse, and may also allow users to install third-party apps to encourage Web3 adoption. Many AR features are now integrated into selected devices.
- X (old Twitter): X is the recommended social platform for Web3 conversations. With founder Elon Musk openly supporting Dogecoin, shares of Company X could be a good buy. Additionally, X supports NFT integration, allowing users to have their NFTs specially displayed as profile pictures.
best online broker
platform | Account minimum amount | Fee |
merrill edge | $0 | $0.00 per stock trade.Option trades cost $0 per leg, plus $0.65 per contract |
E*Trade | $0 | There are no fees for stock/ETF transactions. Options cost between $0.50 and $0.65 per contract, depending on trading volume. |
Invest in non-fungible tokens (NFTs)
NFTs are unique digital assets on the blockchain. These are proprietary and may not be copied. You can purchase NFTs from secondary markets like OpenSea or Magic Eden, or you can choose to mint them and hold them for a profit.
NFTs are important Web3 investments because they can unlock special privileges or be used as investments in Web3 companies.
invest in cryptocurrency
Cryptocurrency is a digital currency operated by a decentralized entity on a blockchain. Like regular money, cryptocurrencies can be used to pay for goods and services or as an investment option. Crypto allows direct exposure to this field and is suitable for people who want to actively invest in Web 3.0.
Cryptocurrencies are highly volatile. Therefore, if you are a risk-averse trader, you may want to consider other lower-risk options such as crypto ETFs or fractional shares. These options provide direct exposure but cushion the day-to-day fluctuations of the market.
best cryptocurrency exchange
company | transaction fees | currency | Minimum deposit or purchase amount | trading restrictions |
---|---|---|---|---|
kraken | 0.00%~0.26% | 185+ | 1 dollar | no |
coinbase | 0.00%~0.60% | 200 or more | 2 dollars | yes |
Crypto.com | 0.00%~0.075% | 250 or more | 1 dollar | yes |
Understand the risks of investing in Web 3.0
Investing in Web 3.0, like any other investment, poses a degree of risk to investors. The biggest risks are the instability, security, and reliability of the existing Web3 investment process and infrastructure.
- Volatility: The prices of Web3 assets can fluctuate significantly over short periods of time, which can have a significant positive or negative impact on your portfolio, depending on time and market demand.
- Security: Smart contract issues, security breaches, and hacks are common in Web3. If a project is attacked, it can lead to large losses of capital. As a safety precaution, use a project that has undergone a full audit.
- Reliability: The best Web3 investments are not always reliable. Your best bet is to choose projects with strong real-world use cases, rather than hype.
Why invest in Web 3.0?
The foundation of Web3 is built on emerging technologies such as blockchain technology, smart contracts, and AI. Investing in a Web3 position gives you the opportunity to be an early adopter of these disruptive technologies.
Web3 has the potential to upend nearly everything we do, from how we shop to how we pay and consume content. As an investment class, Web3 will shape the way companies raise startup capital and generate capital from funding rounds.
Most importantly, investing in Web3 is highly profitable and can deliver impressive returns in a short period of time.
To get the most out of your Web3 investment, you should:
- Use a secure wallet to store digital assets like cryptocurrencies and NFTs.
- Never share your PIN/password to your wallet.
- Avoid projects with little or no social media presence and vague roadmaps.
- Do not open unofficial links or claim “free gifts”.
Factors to consider when investing in Web 3.0
Investing in Web3 can be difficult, especially if you don't have a clear plan or don't do your research. Before investing in Web3, it's important to consider the following factors:
- your investment goals
- The team behind the project or company
- your risk tolerance level
- Web3 regulations in your country
After you have clearly designed and planned your investment goals and investment schedule, you need to know the founders behind the Web3 projects you are interested in. Choose projects with prominent founders. If your project goes awry, it's easy to get in touch. To avoid legal issues with your investment, assess your risk tolerance level and choose a project that is allowed in your country.
FAQ
What is Web 3.0?
Web 3.0 (or Web3) is the general name for a new, user-centric version of the Internet that integrates new concepts such as decentralization, blockchain technology, artificial intelligence (AI), virtual reality (VR), and augmented reality (AR). is. Daily internet usage. It is a decentralized version of the internet that promises to give users better control over the use and sharing of their data, as well as enhance monetization and reduce the risks of data manipulation.
The concept of Web3 is not to make the current Internet obsolete. It's about integrating these technologies into existing infrastructure and making the Internet freely available to everyone. For example, if you make a Facebook or Instagram post that violates Meta's community standards, the social media giant may remove your post or ban your account. This probably won't be possible in Web 3.0, as most platforms will be decentralized.
Although still in development, many individuals, businesses, and even governments are beginning to take a good stance on Web3. The Hong Kong government is preparing to introduce a framework to integrate this technology into many of the city's processes.
Since Gavin Wood coined the term in 2014, Web3 has grown to offer a wide range of potential opportunities. There has been a lot of discussion in recent years about Web3 and the opportunities it offers investors. The Web3 investment opportunity has become an industry buzzword, but many people still don't understand its importance and how they can invest before Web3 officially launches.
Can I invest directly in Web 3.0?
no. Although you cannot invest directly in Web 3.0, you can choose to become an active or passive investor through a variety of investment options. Active investment options include cryptocurrencies and NFTs, while passive investment options include buying shares in companies actively working on Web 3.0.
What is the difference between Web 2.0 and Web 3.0?
Web 2.0 is the modern Internet and has given rise to innovations such as social media, e-commerce stores, and search engines. These innovations made content king and provided ways to create content, unlike Web 1.0, when Internet users had access to limited information. Although these Web 2.0 innovations were beneficial, they introduced data and privacy issues, giving tech giants access to large amounts of users' data.
Web 3.0 is an upgrade to Web 2.0, giving internet users a way to take control of their data, use decentralized technology to store and share information, and voluntarily hide their digital identities. Web 3.0 allows users to pay for goods and services faster and cheaper using cryptocurrencies. With Metaverse development currently underway, Web3 has the potential to change the way we experience the world around us, giving us more immersive experiences such as the Metaverse.
Is investing in Web 3.0 safe?
Web 3.0 investment options are more volatile than regular investment options. While not completely dangerous, there is a significant risk of falling into the wrong direction of volatility. This is why it is important to have a good level of knowledge, do your research, and develop a solid investment plan.
Another area of concern concerns the current state of regulation. This new technology is still largely unregulated, and governments and regulatory bodies may introduce policies that are unfavorable to investors.
Who should invest in Web 3.0?
Web 3.0 investing is not suitable for all types of investors, especially those with a low risk orientation or those looking to start investing gradually. This is a fast-moving investment class that requires some industry knowledge, patience, and timing. Due to the nature of Web 3 investments, they are suitable for investors who fall into one of the following categories:
High risk tolerance
Investing in Web 3.0 is very risky. As a Web3 investor, you should have a large risk appetite and only invest money that you can afford to lose. Many Web 3 assets are volatile, making Web 3 assets a highly unpredictable asset class.
For example, from February 20, 2023 to March 10, 2023, Bitcoin rose to $24,500 and plummeted to $19,500 before reaching $30,000. Without a large risk appetite, you may sell your investments prematurely and incur ongoing losses.
high capital
To see a measurable return on your Web 3.0 investment, you'll need to commit a lot of money. It is recommended to use less than 10% of your total portfolio to invest in Web3, so you should have a diversified portfolio that is not completely dependent on this investment class. A higher capital investment means more profits, but also potentially more losses. If you have a high risk appetite but limited capital, consider investing in leveraged assets and futures trading.