If you’re looking for new avenues for investing, you may have considered investing in Web3.
This is a relatively new approach to the internet and is only expected to grow in the coming years.
In this article, we will clarify what Web3 is and look in detail at several ways you can invest in Web3 and take advantage of its evolution.
What Is Web3?
Before looking at how to invest in Web3, we should clarify what Web3 is as this is integral to the methods of investing in it (see also ‘How To Invest Inheritance‘).
Web3 is a new kind of internet service that is built around decentralized blockchain technology.
The term was coined by Gavin Wood, the co-founder of Ethereum, in 2014, and Web3 is seen by many as a way of bringing social equality to the internet.
Instead of the net being controlled by big tech companies, Web3 gives power to the users and allows them to interact directly with each other.
How To Invest In Web3?
So how can you invest in Web3? There are several ways that you can so let’s discuss these in greater detail.
Cryptocurrencies
As Web3 is built on blockchain technology, this is the most obvious and probably the most straightforward way to invest in Web3.
Many Web3 applications are built on the same technology as already existing crypto technologies, such as NFTs.There are a few ways you can invest (see also ‘How To Invest 30k‘) in cryptocurrencies.
Buy And Hold
The first is to buy a currency at a lower rate and hold onto it until it rises. This buy-and-hold method is very simple to do but can be difficult to judge due to the volatility of many cryptocurrencies.
Keep your eyes open for up-and-coming new cryptocurrencies that have greater potential to rise. You can also choose to buy a stablecoin that is tethered to the USD and will rise when the dollar rises.
Cryptomining
If you have the programming knowledge and the GPU power, you can also mine your own cryptocurrency.
Cryptocurrencies can be mined by anyone but realistically, you will need several computers to mine them individually due to the processing power and time needed.
Mining crypto involves computers solving complicated mathematical problems, with the first computer to solve each puzzle entering a new block onto the blockchain and receiving rewards in the form of bitcoins.
It requires not only immense processing power but also a great deal of power.
If investing in the necessary hardware to single-handedly mine cryptocurrency isn’t possible, then there are still options available.
Individuals can join a crypto mining pool, where a group of people joins together and “pools” their computing power to solve the puzzles.
Any rewards received are then distributed amongst the pool members. A third option is to employ a cloud mining service. With these, you pay a third party to do the mining for you and have use of their processing power.
Day Trading And Shorting
Another way to make money out of cryptocurrencies is to trade them on a shorter-term basis. As we said earlier, the crypto market can be very volatile and will quickly rise and fall in value.
If you see a currency dip, buy some coins and wait for an immediate rise to make a quick profit. Another option is to sell a currency before a dip hits and then buy it back when it’s low.
These methods take good timing and constant watching of the markets to be successful, but they can make you a small profit quickly (see also ‘How To Scalp Stocks‘).
Cryptostaking
Cryptostaking also requires buying some crypto and holding onto it, but instead of keeping your currency in a wallet, you deposit it into a staking pool.
The pool then provides a yield over a period of time. It’s a similar idea to depositing cash into a savings account and receiving interest back.
Like many savings accounts, your cryptocurrency is locked into the staking account for a designated period of time.
NFTs
Another well-known type of investment that is closely associated with Web3 and blockchain technology is non-fungible tokens (NFTs.)
These commonly take the form of digital art, but can also be music, video, trading cards, or other types of media.
A marketplace such as OpenSea allows you to browse collections of NFTs and purchase any that are available.
You can look for popular artists or collections and try to buy them early in the hope that they will increase in value over time.
Many marketplaces also allow you to mint your own NFTs to sell to other people, although there are fees associated with this.
Companies
You can also indirectly invest in Web3 by searching for companies involved with Web3.
Many companies are taking advantage of Web3 technology to increase their profit margins and you can get a slice of this by investing (see also ‘How To Invest $50,000‘) in these companies.
Developing and expanding the blockchain requires a heavy investment in computer processing power so for many, buying shares in a company like Nvida is an indirect way of investing in Web3.
Some companies might only be using Web3 technology as a marketing tool and the extent of their involvement only goes as far as releasing some NFTs.
However, other companies are genuinely committing to Web3 and what the technology can bring. An example of this is Meta (see also ‘What Are MANG Stocks?‘), which is using blockchain technology as the base of its developments and future success.
Final Thoughts
Web3 is an exciting new way of approaching the internet. It puts the power and control into the hands of the individual users instead of big tech companies.
Web3 is built on blockchain technology and there are several ways that individuals can invest in Web3.
The most popular and common of these is via cryptocurrencies and users can choose to trade or mine crypto.
Another option is by trading or minting NFTs and there are several companies involved with Web3 that can also be invested in.
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