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How To Invest In Web3

Last updated 03/15/2024 by

Lacey Stark

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Fact checked by

While much of the Web3 concept is theoretical, big strides have been made towards it being a reality. This gives eager investors a few options to make a direct investment in what many say will become Web 3.0. The technologies are newer and still under development, making some of your investment options riskier than others. It’s important to do your research first and speak with a financial professional before deciding where to place your hard-earned dollars.
By now, most people are well aware of current virtual reality and artificial intelligence technologies, such as those used for online gaming and machine learning. Proponents of Web3 will tell you that we are still in the very early days of what these and other technologies can mean for us as we enter a new internet age.
It’s only natural for the average investor to wonder what types of investment opportunities these concepts will bring. But first it’s important to understand the vision for Web 3.0, what concepts such as decentralization and blockchain technology mean, and if now is the right time to invest in digital assets and other Web3 technologies.

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What led to Web 3.0?

When the World Wide Web first became readily accessible to the public in the early ’90s it was largely a “read-only” collection of random, static webpages (Web 1.0). There was little to no interaction between users and there was no centralization.
By the 2000s, the web started to become more interactive, with the advent of blogging as well as the ability to comment on the posts being read. Then, with the explosion of sites such as Facebook, Twitter, YouTube, and Google, among others, there was suddenly a new way for users to watch, learn, search, and communicate.
It also started to become clear that using these “free” sites did, in fact, come with a price. In exchange for all of these free services, companies were able to collect your personal data and use it to create very targeted advertising. That, in turn, allowed tech giants to essentially create a monopoly and make huge sums of money through the sale of users’ personal information. This is pretty much where we are now, which is considered Web 2.0.

How is Web 3.0 different?

Proponents of the next phase of the internet, Web 3.0 (also known as Web3), aim to decentralize the internet and make it more democratic, by correcting the problems of such monopolized, targeted web practices.
The theory goes that the internet will be rebuilt on blockchain technologies, decentralized autonomous organizations (DAOs), decentralized applications (dApps), and smart contracts. Essentially, the idea is that these technologies will replace centralized servers owned by banks, corporations, or individuals.
While Web3 is still in its very early stages, the somewhat utopian theory is that Web3 will bring social equality to the internet. Web3 promises to give back control and ownership of not only your personal data but also what happens on the web in general. It remains to be seen if these promises will pan out as anticipated.

The metaverse and artificial intelligence

Another layer to the Web3 experience is the metaverse—essentially shared online worlds that connect people on the internet through a combination of virtual reality, augmented reality, and well, real reality. Meta Platforms (formerly Facebook) founder Mark Zuckerberg has said it plans to be a big player in the metaverse space.
Many companies are working on the technology to interact with others around the globe in an entirely new digital experience. The metaverse purports to create virtual worlds that allow people to attend events in real time for work, play, learning, and many other social experiences. If you’re interested in investing in the metaverse, read this article.
Another seemingly natural progression for Web 3.0 is to continue to harness the power of artificial intelligence in more ubiquitous ways, increasing the connections between machine learning and human interactions.

Blockchain technology explained

One of the key ideas behind the goal of Web3 is using blockchain technology, which is basically a digital ledger of transactions. These transaction records are maintained by a network of computers as opposed to a single server, using encryption and verification methods to make them more secure.
The point of blockchain technology is to create security of personal data by getting away from single servers—these are generally thought to be more susceptible to hackers. Rather than storing your information on these more vulnerable servers, it’s housed in your digital wallet with its own secure, digital signature.
Blockchain technology facilitates that process by authorizing the digital signature of the owner, which authenticates the transaction and safeguards it from tampering. This way the information the digital ledger contains is highly secure. Additionally, information can be added to the blockchain, but cannot be deleted.

How to invest in Web3

There are a multitude of investment opportunities surrounding Web3 and its various applications. For example, there are cryptocurrencies and non-fungible tokens (NFTs) to consider, each with its own risks and potential for growth. Another more conservative option is to invest in established companies that are exploring and utilizing Web3 technology but already have a solid base.
Crypto enthusiasts aside, you might want to start by doing your own research and then get some investment advice from an expert before taking the plunge.

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Probably one of the more obvious investment opportunities related to Web 3.0 right now is to start investing in cryptocurrencies. Bitcoin was the first type of cryptocurrency, introduced in 2009, but there are many iterations today. There is a huge potential for growth and crypto millionaire stories abound. However, the market is extremely volatile, so it’s good to understand the pros and cons before you start investing.
Cryptocurrencies are all a form of decentralized money, meaning they’re not associated with any financial institution or government, and therefore are outside any regulatory controls.
In fact, some countries such as China have banned crypto altogether. Plus, we have all heard stories of the digital coins going belly up, being stolen, or getting hacked.
For example, if someone steals your credit card and runs up $1,000 in charges, you’re not responsible for paying that money back because there are protections in place. However, if your Bitcoin or Ether (sold on the Ethereum blockchain), or other cryptos are stolen, that money is more than likely to be gone for good.

NFT market

A non-fungible token (NFT) describes pretty much any unique object that can be expressed as a digital asset, such as music, videos, in-game items, and other collectibles—even a metaverse or real estate. For example, you can virtually buy a piece of the rainforest (although that’s more of an investment in our planet than an investment meant to subsidize your retirement savings).
Buying and selling digital art is very popular right now, often for astronomical sums of money. But art is generally considered a pretty solid investment. Purchasing a digital file that represents a piece of art isn’t really that different from buying a physical painting, and holding onto it as its value grows.
Of course, you would want to learn as much as possible about the market before acquiring digital representations of art, or other types of crypto collectibles. A quick internet search can show you a ton of places to buy and sell NFTs of all kinds, such as OpenSea or Rarible.

Pro Tip

Keep in mind that many of these websites also require you to buy your non-fungible tokens with crypto coins (that you can keep in your crypto wallet). You will probably have to buy those first if you want to dabble in buying or selling NFTs.

Safer Web 3.0 investing

If you’re (understandably) a little wary of making a direct investment in specific digital assets or crypto coins, but you still see a future for some different aspects of Web3, you have some safer options.
More traditional investors might want to consider buying stocks or exchange-traded funds (ETFs) that include established companies that are investing in web 3.0 technology. There are plenty in the market that are developing and implementing new products and applications that utilize blockchain technologies or otherwise engage in activities related to cryptocurrency, while still maintaining a solid base.

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You could invest in cryptocurrencies like Ethereum or Bitcoin or buy shares in cryptocurrency exchanges, such as Binance or Coinbase. Alternatively, you could buy into ETFs that include a wide selection of cryptocurrencies or provide a basket of companies that are heavily invested in web 3.0.

Pro Tip

Web 3.0 is still in its early days, but many mainstream companies are already harnessing the power of blockchains and other technologies. Investing in those types of tech stocks or ETFs give you exposure to the Web3 sector without the enormous risk.

The bottom line

If you believe the hype, Web3 is now in its infancy but is on its way to entirely change the way we live, work, invest, and socialize on the web.
While it’s important to do your own research, it’s also worthwhile to talk to a financial expert who can help you navigate the best investment options for your future. It’s up to you whether that includes investing in Web 3.0 technologies.

Key takeaways

  • Web3 is the forward-thinking, somewhat utopian ideal of a completely decentralized internet based on blockchain technologies, decentralized applications, and decentralized autonomous organizations, as opposed to centralized servers.
  • Web 3.0 isn’t here yet, but many companies are now working on the technology that will be needed to make it a reality.
  • Investing in Web3 technologies such as cryptocurrencies and non-fungible tokens are highly volatile (read: risky) but also have the potential for extraordinary growth.
  • Some may consider buying stocks in companies that utilize blockchain technology or ETFs related to Web3 technologies a safer alternative for the average investor.
Related reading: Has this article piqued your interest in non-fungible tokens? If so, you can learn more about NFTs by reading How Much Does It Cost To Create an NFT?.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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