The advent of the internet is arguably one of the most important technological revolutions in history. With that said, it is believed by many that we are still in the early innings of its evolution, and many more unimaginable iterations of it are still in front of us. In order to understand Web 3.0 we should take a quick look back at the origins of the internet, or what is now referred to as Web 1.0. Tim Berners-Lee pioneered the early development of the internet in 1990 when he was a computer scientist at European researcher CERN. By the mid-1990’s, the introduction of web browsers such as Netscape Navigator ushered in the era of Web 1.0.
This was the age of static webpages retrieved from servers, a far cry from the amazing content that is taken for granted today. You will remember that this also allowed the genesis of email, which many at first thought was still delivered by the postal service lol. The interaction was primarily one-sided in Web 1.0, with new users taking in a plethora of new information, such as real-time news and stock and financial data, among other things.
Content and its addition to the internet was small and this led ultimately to changes that became what we now call and have as Web 2.0.
Web 2.0 refers to a paradigm shift in how the internet is used. Over the past 15 to 20 years, the bland webpages of Web 1.0 have been completely replaced by Web 2.0’s interactivity, social connectivity, and user-generated content. This enabled an enormous number of users to participate in content creation on social networks, blogs, and more.
Search engines and social media platforms driven by user-generated content disrupted the media, advertising and retail industries. The thought of brick and mortar businesses like Walmart and others disappearing was something that could not be imagined before the advent of Web 2.0. Business was now at a point where they once again had to evolve in order to survive this massive consumer shift.
I remember going to a meeting circa 2005 and the speaker holding up his phone and declaring that this would be the future of how we interact with data. He had a degree from both Yale and Harvard as I remember, and was certainly correct. You have to remember at this point smart phones were just coming around, and no one had any concept of what apps were and how they would proliferate.
It’s somewhat akin to how the mouse was developed and marketed before there was a whole lot to click on. The internet has become a massive app store, dominated by centralized apps from Google, Facebook and Amazon, where everyone is trying to build an audience, collect data and monetize that data through targeted advertising.
Fast-forward to present day and you probably have heard or seen the internet acronym Web 3.0. Just like in the prior two iterations we need to get an understanding of what it is and where this new technology will lead us. Again, we are in the early innings, and things that will come to fruition via this new paradigm are probably not even known nor totally understood currently.
However, we can take a look at what is being developed and try to get our heads around it and determine if, when and where we should invest in it. Berners-Lee was again prescient in his 1990 concepts of where the World Wide Web could go. His concepts can be outlined in two bullet points:
- Decentralization: “No permission is needed from a central authority to post anything on the web, there is no central controlling node, and so no single point of failure…and no ‘kill switch’! This also implies freedom from indiscriminate censorship and surveillance.”
- Bottom-up design: “Instead of code being written and controlled by a small group of experts, it was developed in full view of everyone, encouraging maximum participation and experimentation.
Sounds eerily similar to the new world of blockchain development and cryptocurrencies doesn’t it? So how does one go about investing in Web 3.0? Currently, there are three main categories that can be viewed as investment asset classes:
NFTs
Non-fungible tokens, or NFTs, are one of the first building blocks of Web 3.0. These “non-fungible tokens” are digital representations of items that are one of a kind. One of the reasons that NFTs are exploding is that they could have significant utility in Web 3.0. NFTs, as unique and non-replicable items, can be used as proof of ownership in things like the metaverse, real estate, and other assets where they can also be bought, sold and traded. According to the publication Inside Bitcoins, you could take a look at the following 5 investments to get a piece of the NFT action:
- Decentraland
- The Sandbox
- Axie Infinity
- Enjin Coin
- Tezos
Metaverse
The metaverse is an all-encompassing description of the worlds that Web 3.0 will create. Through a combination of augmented reality, artificial intelligence, social media, virtual reality and other technologies, the metaverse will create something of an alternate universe that will in some ways mirror our own. Facebook recently changed its official business name to “Meta Platforms” to reflect this shift. According to the analysts at GoBankingRates, the top 5 metaverse related stocks to buy in 2022 are:
- Roblox (RBLX)
- Match Group (MTCH)
- Take-Two Interactive (TTWO)
- Nvidia (NVDA)
- Unity Software (U)
Cryptocurrencies
Cryptocurrency like Bitcoin and Ethereum are the so-called financing arm of Web 3.0. Crypto is already used to purchase NFT’s, land and other objects in the metaverse, and developers see it as the financial engine of the future in a decentralized financial system. If you want a more detailed analysis of crypto and investment ideas, take a look at our Crypto section on Investing and Money.
