If you haven’t lived offline, you’ve probably heard of Web 3.0.
Over $27 billion has been invested in the Web 3.0 ecosystem to date, and at the same time, the term “Web 3.0” has skyrocketed in Google search results.
Dubbed “the biggest thing since the invention of the Internet,” Web 3.0 is getting the attention of some of the smartest people in the world. As thousands of people level up to better understand Web 3.0, you might be wondering if this is what you need too.
So let’s go deeper. What the hell is Web 3.0, and does it even matter?
What is Web 3.0?
According to Web 3.0 expert and Ether Capital CEO Brian Mosoff, Web 3.0 is meant to create a next-generation Internet that is more open, user-controlled, and decentralized.
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Unlike today’s Internet (Web 2.0), where most of the value created by its users (such as data) is captured by large organizations such as Meta and Google (centralized platforms), Web 3.0 seeks to return the power of the Internet to its users. users.
Taking back control of user data and privacy and enabling ownership of digital assets—while minimizing the risk of hacking—are the tenants that make up Web 3.0.
However, in general, the ecosystem is still in a stage of rapid development, and for its widespread adoption, important things need to be done, such as regulation, volatility reduction, and further development of infrastructure.
Where did Web 3.0 come from?
Today’s version of the Internet is very different from what Web 3.0 aims to create. In its current form, much of the Internet’s infrastructure is owned by individual large companies, and its users do not own the data they create. In fact, the main “product” of the Internet today is its users, because they create data that is monetized by the owners of the Internet infrastructure.
Web 3.0 was born along with the mechanics and spirit of cryptocurrency and blockchain networks, where those who participate in the operation of the network benefit from rewards.
Bitcoin, the world’s first cryptocurrency and blockchain network, launched it in 2009. But it was the launch of Ethereum in 2015 that allowed Web 3.0 to take off.
Read more: 8 alternatives to bitcoin – what will be the next bitcoin?
Unlike Bitcoin, the Ethereum blockchain allows developer communities to build programs on top of their blockchain, called decentralized applications or Dapps. This means that entire companies can be built on technology that no one person owns.
What makes these applications special is that their back-end is based on things called smart contracts. Once deployed, smart contracts run on their own and cannot be modified. This creates a general sense of “programmed trust” among those who use the programs.
This “programmed trust” and the management of such programs in distributed networks is the foundation underpinning Web 3.0.
Why is Web 3.0 so hard to understand?
According to Mosoff, Web 3.0 can be difficult to understand for two main reasons:
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“Web 3.0 is hard to understand because most people probably don’t take the time to think about the design of the Internet and how it works. It’s hard to see why this is of value if you don’t understand how the internet services you use work. There are many challenges and risks in how the internet is built today, but these ideas are abstract,” he says.
“The second reason is that Web 3.0 is now a catch-all term and can mean something different to everyone. Blockchains, cryptocurrencies, NFTs, the metaverse, decentralized finance (De-Fi) or even just the decentralization of any kind of data can fall under the Web 3.0 umbrella.”
Why you should care about Web 3.0
There are several aspects of this space worth understanding, three of which are especially important to today’s investors:
1. The economy of the creator and the NFT
As the Web 3.0 ethos is centered on allowing people to digitally own and manage their data and assets indisputably, it is transforming the creator economy with NFTs (Non-Fungible Tokens).
NFTs allow creators, artists, musicians, gamers, and others to own and indisputably authenticate digital assets. Art, album art, digital images, and even screenshots of tweets were created as NFTs. They allow you to monetize creativity in ways that were previously impossible. As a result, many people earn money. If you know how to play in space, investors can have great opportunities.
Read more: The Complete Guide to Buying Your First NFT
Admittedly, NFTs have drawn criticism due to their long-term future, and interest in NFTs has fallen off a lot recently due to changing macroeconomic factors and the volatility of the cryptocurrency market. But with $5.4+ billion in 2021 revenue from NFT sales, more companies from the NFL to McDonald’s are taking notice.
2. Decentralized finance or De-Fi
As of June 14, 2022, there are over $79 billion involved in the decentralized finance ecosystem.
Decentralized Finance, or “De-Fi,” is the financial side of Web 3.0 that uses blockchains and cryptocurrencies to exchange, lend, and earn interest on crypto assets. The ecosystem is facilitated by individual digital wallets and smart contracts, and is independent of central parties such as banks.
For example, millions of people can earn staggering interest (much higher than what you could get from a bank on your cash) on their cryptocurrency in De-Fi by lending their assets or locking them in the software that runs the blockchain. networks (similar to how bonds work).
Read more: Crypto lending explained (and how to invest in it)
While there have unfortunately been several major De-Fi crashes recently that have literally wiped out billions of value (Terra and LUNA), De-Fi remains one of the most exciting aspects of Web 3.0 and has the potential to completely revolutionize our financial system.
It’s still early days and there are no clear rules governing this high-risk area yet, but if you’re interested in next-generation finance, start exploring De-Fi.
3. Metaverse
Ever since Facebook was renamed Meta Platforms, everyone has been talking about what Metaverse is and what it can become.
By 2024, the metaverse is expected to be a $800+ billion market, centered on things like live virtual entertainment, AR/VR games, next-gen social media, and more. The Metaverse could even become a money-maker through games like Axie Infinity or Roblox.
Read more: How the Metaverse will change our financial landscape
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Given the excitement around the space, big players are lining up to get involved. JP Morgan created a branch in the Metaverse. Ed Sheeran performed in the Metaverse. Millions have been invested in Metaverse real estate. Warner Music is setting up a live venue in the Metaverse. And companies like Nike and Gucci are looking into how to get involved. Even Microsoft CEO Satya Nadella talks about how the Metaverse can change the way we live, interact and work.
No one knows what the Metaverse will become, but the amount of money invested in it opens up a lot of possibilities. By working on the Metaverse, a whole range of new professions could be created. NFTs and games are leading the Metaverse apps, but it’s entirely reasonable to think that one day we’ll all be able to get involved in some way.
How to start investing in Web 3.0
For those looking to get started in space, Mosoff offers the following tips:
“The best way to start learning about Web 3.0 is to follow the cryptocurrency community on Twitter and explore various blockchain projects. After you have done some research, get an idea of how wallets work and invest a small amount in a cryptocurrency or NFT project that you understand. This will help you get a taste of ownership. There are many crypto exchanges or NFT trading platforms to choose from. Once you dip your toes and get a feel for how it feels, you can dive deeper into more complex applications.”
Featured Image: optimarc/Shutterstock.com
