How to Invest in Web3 – Best Practices & Tips
I’ve already spoken about Web3 before, but I realized there was too much ground to cover to limit myself to one blog entry so here is another one. It’s been a while now since I found out about Web3 and its constantly growing potential. But it is precisely because it is a technology that is constantly developing and growing, that it can feel scary getting into it blindly. That’s why I decided to share some of the insights I’ve gathered along the way.
I’ll be covering what Web3 is, what makes it different from Web2, and give some tips on how to start investing in it.
What is Web3?
Web3, in the simplest terms, is a newer, improved version of the current internet at the core of which is decentralization. Essentially, it’s about giving people more personal control over their information and away from entities like tech giants or bank systems.
Running on technologies such as blockchain, crypto, decentralized applications (dApps), and smart contracts, it is centered around being trustless (you don’t need to trust a third party) and transparent.
If you are still not swayed by the opportunities it gives, here’s a little statistic: according to Precedence research, by 2032 the global Web3 market is projected to be worth $65.78 billion - for context, as of now, it’s worth $2.18 billion. Think about that for a second. That’s annual growth of 46%, pretty impressive. This is why so many people are scrambling to get a piece of the Web3 pie—myself included. But why is it set to be so popular?
Web3 vs. Web2
In order to understand why Web3 is an improvement on Web2, I want to first go over what Web2 is in the first place, and what it currently lacks to stick around for much longer.
What is Web2?
Web2 is the internet as we know it today, with each platform having centralized control over all data that comes through. While mostly convenient for users, there are some things that you are forced to compromise: lack of privacy, data monetization by corporations, and limited user control. This is because as owners of their platforms, companies are given almost complete access to our personal information. With every click or interaction being recorded and sold to advertisers, there is a system that runs entirely on you sharing your data.
Approaches to Web3 Investments
Now that I’ve covered “what”, let’s cover the “how”. There are a few ways in which you can invest in Web3.
Method 1: Blockchain Technology. In many ways, blockchain acts as a sort of backbone of Web3. You can consider investing in either blockchain projects or specific cryptocurrencies, such as Ethereum.
Method 2: Decentralized Finance (DeFi). DeFi platforms are sort of like an online bank but without an actual banking system as an intermediary, meaning you can lend, borrow, or stake your assets independently.
Method 3: NFTs. You might remember the Non-Fungible Tokens (NFTs) taking the world by storm a few years ago with both art and games. Even though they’ve declined in popularity right now as happens with every trend, their time may just come back yet.
Method 4: Play-to-Earn Games. This is my clear favorite - you might guess why. Ever since my team and I found out about this approach, we knew we wanted to make something like it and that’s how Nordom Gates was born. It’s a fun and low-cost way to get started as a newbie investor and that’s what I wanted to help enable as well.
Method 5: Skills Instead of Money. Here’s the thing: you don’t have to pour money into Web3 to invest in it. You can offer your skills—whether you’re a developer, designer, or writer—and get paid in tokens or cryptocurrency.
So yes, you don’t need to be a millionaire already to start investing. Start small and grow your investment pool gradually.
How to Invest
Now it’s important to realize that the above-mentioned methods are mostly suggestions and of course, there’s no one go-to, superior Web3 investing strategy. I’ve written up a guide to choosing the right project for yourself. But overall, anyone claiming to know the “perfect” way to invest is either lying, overconfident, or selling you something.
I can give you some tips that have worked for me when deciding whether to invest or not though:
Do Your Own Research (DYOR): Always look up the team behind the project, their plans, as well as tokenomics. If there’s a lot missing, better not risk it, no matter how good it sounds.
Diversify: Don’t put all of your eggs in one basket - spread your assets to get the most out of your investments, especially as you are learning.
Start Small: There’s no shame in starting with $50 or $100. The goal is to learn and grow, not to lose sleep over your investments. You can always invest more as time goes by.
Be Patient: Web3 is a relatively recent invention, so there’s still some improvement ahead. Some projects will become big, others will flop. Think long-term though and try to guess how things will go.
At the end of it all, Web3 is exciting in part because it’s still developing and there’s so much innovation to come. That’s also, in part, why the way to success with your investments is not so formulaic.
Remember, in these blogs, I’m just sharing what’s worked for me. Ultimately, the decisions—and the risks—are yours to take. Whether you’re putting in money, time, or skills, Web3 is a space worth exploring. It’s not just about profits; it’s about being part of the next chapter of the internet.