How to Invest in Web 3.0?

Credit: John Short

If you’ve been wondering about how to invest in Web 3.0, you’re not alone. Web 3.0 is being called the next generation of the internet, and every day, brands, companies, celebrities, and even countries are investing time and money in it.

But while the rush toward Web 3.0 is well underway, the term can be difficult to understand because it lacks a universally accepted definition. Is it a technology? A concept? A place?

Web 3.0 is best thought of as several technologies like artificial intelligence (AI), virtual reality (VF), blockchain, NFTs, and cryptocurrencies coming together to create the latest evolution of the web-based world and revolutionize our digital experience. In that sense, it is not one thing, nor driven by one company, but a myriad of technologies and ideas creating something new.

Because so many technologies are involved, there are several investment opportunities in Web 3.0 — from NFTs and the metaverse to cryptocurrencies and more traditional stocks. But like with anything new — especially in the technology sector — it’s difficult to predict what’s going to happen as Web 3.0 unfolds.

Lucky for us, we’re not here to give you investment advice or to predict the future of Web 3.0.
The goal of this piece is to help you better understand what Web 3.0 is, what it could be, the technologies critical to its development, some of the major players in the space, and a few things you could do if you want to invest.

What is Web 3.0?

By now you probably know Web 3.0 is intertwined with blockchain technology, cryptocurrency, and virtual reality. And that’s a good start. But to better understand Web 3.0, it helps to place it within the context of the history of the internet.

In a nutshell, the history of the internet can be broken down into three phases. They include:

  • Web 1.0. (1991-2004). At this point, the internet was primarily text and mainly comprised of static web pages connected by hyperlinks. Users passively took in information on home computers.
  • Web 2.0. (2004-present). Marked by the launch of Facebook, interactivity increased, and users not only received information but also provided it. Social media, YouTube, Google, and the rise of e-commerce occurred as mobile phones and cloud computing drove growth. The downside of Web 2.0 is a lack of privacy for users.

And lastly, Web 3.0.

The term Web 3.0 was first introduced by John Markoff of the New York Times in 1996, referring to the third generation of internet-based services that would collectively comprise the ‘intelligent web.’

Here are some of the most important aspects of Web 3.0:

  • The ‘Semantic Web’ will go beyond focusing on keywords and numeric values and be able to understand complex content like photos, video, audio, etc.
  • 3D graphics and VR and AR technologies will play a major role
  • Digital identities will be more anonymous online
  • It is permissionless, so anyone can use it without having to get permission from a provider
  • Improved scalability, data security, and privacy

Proponents of a decentralized Web 3.0, also referred to as Web3, add that:

  • It is built on blockchain technology
  • Users can buy, sell, and trade digital assets or NFTs using crypto wallets and cryptocurrencies
  • Companies won’t be run by CEOs or presidents, but by Decentralized Autonomous Organizations (DAOs)

As you can see, Web3 is far from a finished product. Instead, it’s a combination of new technologies and ideas meshing over time. Another big idea that is interconnected with Web3 and consists of several technologies integrating is the metaverse.

What is the metaverse?

The metaverse is a broad term used to describe worlds that are built for virtual and augmented realities. These digital worlds, like Web3, are built on blockchain technology.

Through a combination of VR and AR software and hardware, AI, social media, and NFTs, virtual worlds are being rendered in real-time and are being called the metaverse — a term first coined in 1992 in Neal Stephenson’s sci-fi novel Snow Crash.

Users can enter these digital worlds with their avatars and shop, see shows, buy digital assets, play games, visit art museums, work out, and do pretty much anything they can do in real life. They can also do things they can’t do in real life — like teleport or fly through the Milky Way in a science class.

Because of the potential for the metaverse — ReportLinker claims the global metaverse market could be worth $758.6 billion by 2026.

It’s no wonder companies like Meta (previously Facebook) plan to invest billions of dollars in the metaverse over the next decade, and Apple, Microsoft, and Google are in the mix as well. Even entire countries like South Korea and Turkey have pledged major investments in the metaverse.

One way to invest in Web3 is to buy stocks from companies that are investing in the metaverse. But before you do so, research their Web3 and metaverse projects and developments. The more you understand who is doing what in the space, the more confident you can be in your investment.

Also, although Big Tech will play a huge role in advancing software and hardware for the metaverse, it’s worth noting that they are centralized companies. And none of these companies has created a metaverse yet.

However, decentralized metaverses have flourished on the Ethereum blockchain for years.

Two of the most influential metaverses that already exist are The Sandbox and Decentraland. These user-owned metaverses have blown up in recent years, and have attracted major brands, corporations, and celebrities into their virtual worlds. Both regularly sell plots of digital land for hundreds of thousands and even millions of dollars.

Both metaverses also run off their own native cryptocurrencies — $SAND and $MANA respectively. One way to invest would be to purchase cryptocurrencies from these metaverses, which can be done using a crypto wallet like Coinbase, Binance or Kraken.

You could also purchase digital land in the form of NFTs from The Sandbox and Decentraland on secondary NFT markets like OpenSea and Rarible. However, the floor prices on these projects are incredibly high, so it’s not the route for everyone.

If you can’t afford digital land in a metaverse and you don’t want to hold cryptocurrency, you can still pay attention to what’s happening in these metaverses. You can attend events such as concerts, fashion shows, or an art opening to find out more.

Participating in a metaverse event before investing is a great way to learn more about the metaverse and Web3 without putting your money on the line.

Investing in NFTs

Without non-fungible tokens (NFTs), all this talk about Web 3.0 and the metaverse probably wouldn’t be happening, or at least not with as much passion and fury.

Non-fungible tokens (NFTs) are unique digital assets that can be minted and stored on the blockchain, and they’re a critical building block for Web 3.0.

NFTs hit the scene on the Ethereum blockchain with the launch of generative NFT projects like CryptoKitties and CryptoPunks in 2017. Before long, the world realized there was value in digital assets as the prices of these collections soared and more creators followed suit.

Digital artists like Beeple helped the cause by selling a 1:1 NFT titled “Everydays: The First 5000 Days,” for a whopping $69.3 million in 2021, and that same year, NFTs recorded over $25 billion in total sales. Now the sky appears to be the limit for digital assets and every day more investments are made in the NFT space.

NFTs perform a couple of critical functions for Web 3.0 and the metaverse.

First, they verify digital assets and store them safely on blockchains like Ethereum, Tezos, and Solana. That means they prove and track ownership of digital assets like videos, photos, memes, etc., and allow these assets to be traded, bought, and sold. This was not possible in the past, and it is a distinct feature of Web 3.0.

Secondly, they enable scarcity to be created. Scarcity creates value in assets and is a huge reason for the success of NFTs.

As unique, non-replicable items, NFTs can be used for several use cases, including proving ownership in the metaverse, using a profile picture NFT as your avatar, or buying a pair of digital Nike NFTs so your avatar has fresh kicks in the metaverse.

Because buying, selling, and trading NFTs is a huge part of Web3, investing in NFTs is another way to bet on Web3.

There are several ways to invest in NFTs, from sniping, minting, or purchasing native coins from NFT projects. For more information about investing in NFTs, you can check out our NFT drops calendar blog

But remember, the NFT market is very speculative, so we recommend reading as much as you can about NFTs and NFT news before investing.

What does Web 3.0 mean for crypto?

Cryptocurrency will serve as the financing arm of Web 3.0 and play a huge role in the metaverse.

After the publication of Bitcoin’s whitepaper in 2009, the world had its first decentralized digital currency and a new technology to make it work — the blockchain. Blockchain technology called for a decentralized system of computers keeping a transparent digital ledger of all Bitcoin transactions.

Blockchain technology made Bitcoin run, and as Bitcoin caught steam, more decentralized altcoins and blockchains followed. The most important was Ethereum.

Ethereum blockchain allowed developers to develop coins, decentralized apps and smart contracts. NFTs were born on the Ethereum blockchain, and in the beginning, ETH — Ethereum’s cryptocurrency, was the only coin that could be used to purchase NFTs.

Today there are thousands of cryptocurrencies (Bitcoin remains the highest by market cap) and cryptos are used in metaverses and on Web 3.0 to buy, sell, and trade digital assets. Also, holding certain crypto sometimes gives users a vote within decentralized autonomous communities (DAOs).

And while cryptocurrencies are historically volatile, more athletes and celebrities are taking their salaries in Bitcoin and other cryptos, and reputable investors and firms are adding crypto to their portfolios.

Decentraland, The Sandbox, Axie Infinity, and even the fire-hot NFT project Bored Ape Yacht Club all have cryptocurrencies that can be purchased using popular crypto wallets like Coinbase and Kraken. And if you noticed, all these projects run on the Ethereum blockchain, which also has its own cryptocurrency — Ether or ETH.

Other blockchains and cryptocurrencies you could look into include Solana, Tezos, WAX, Polygon, and many more.

If you believe in the future of Web 3.0, NFTs, and the metaverse, then there’s no doubt crypto will play a major role. Deciding which cryptos to invest in and how you think they will play into the future of Web 3.0 is up to you. Luckily there are several reputable sources to help you start your investigations.

Other strategies to invest in Web 3.0

Now that you understand some of the basic technologies working together to create the future of Web 3.0, you can develop an investment strategy.

Because there are so many different elements to Web3, it’s recommended that you start with the aspects of it that you’re interested in. Whether it’s gaming, blockchain technology, or NFTs in the digital fashion industry, having a passion for something when you start investing can be a huge help.

Here’s a review of some of the major Web 3.0 technologies and concepts that you could invest in:

  • NFTs
  • The metaverse
  • Cryptocurrency
  • Companies building infrastructure, hardware, and software for Web 3.0.
  • Stocks and ETS that track any of the above
  • AI and Decentralized Apps

How you decide to invest may depend on your own vision of Web 3.0, or on what tech companies, DAOs, NFT projects, or cryptocurrencies you think will succeed in the space.

Or you could determine your investment based on risk. For example, cryptocurrencies are more volatile and riskier than stocks. And NFTs are an even newer and less liquid asset than cryptocurrencies.

When it comes to metaverses, Decentraland and The Sandbox are decentralized, blockchain-based digital worlds that have proven their value. But what kind of metaverse the centralized company Meta aims to create in the future remains unknown. What is known is that Meta is one of the biggest companies in the world and they’re throwing billions of dollars behind it.

There are a lot of questions to think about as Web 3.0 unravels, which can make investing fun and complicated at the same time.

Who else is investing in Web 3.0?

If you’re not sure how to invest, another way to get ideas is to take a look at what other people and companies are doing in the Web 3.0 space.

Here’s a brief run-down of some of the biggest names investing in Web 3.0, NFTs, and the metaverse recently:

  • South Korea invests $186M in the metaverse
  • Turkey enters the metaverse with a $19M budget
  • Spotify hires Web 3.0 engineer
  • American express files Web 3.0-related trademarks
  • Stripe launches support for Web 3.0 business
  • Meta’s VR platform Horizon Worlds reaches 300k users
  • Ferrari seeks opportunities in Web 3.0 and metaverse
  • Gucci buys digital land in The Sandbox
  • Fenty Beauty registers trademarks related to Web 3

This is just grazing the surface of headlines from the past couple of months. A lot is happening in the Web 3.0, metaverse, and NFT spaces. So though it can be complicated, the good news is there’s a lot to choose from if you want to get involved.

In Conclusion

Despite critics of Web 3.0 claiming that it’s still a “hazy” idea, it seems like the world is headed in the direction of a more intelligent, interactive internet.

What exactly that will look like remains to be seen.

What is known is that big players like Meta and Mark Zuckerberg have a vision about Web 3.0 and the metaverse and they’re throwing force behind it. But so do the proponents of decentralized metaverses, as well as DAO, blockchain, crypto, and NFT enthusiasts.

What seems probable is that a myriad of tech companies, DAOs, and startups will have to come together to shape the future Web 3.0. How that will occur and which names will come out on top is impossible to know.

But by understanding the technologies and who is involved, you can develop a strategy for investing in Web 3.0. And to stay up to date with Web 3.0 news, follow us at Rarity Sniper News for the latest headlines.