Web3 is a new cryptocurrency that allows users to be the owners of their digital assets. Unlike the web2 model, where users purchase items tied to a user’s account and then lose ownership of those assets, web3 allows direct ownership through non-fungible tokens. These tokens can then be used to trade in-game items, which allows users to recoup their value.
Web3 is decentralized and is built on blockchain technologies. The system is designed to be permissionless, open, and equitable. It’s a permissionless system because there is no central entity to give you access to the network or your crypto wallet. Decentralization is the ability for network participants to work independently of a central entity and has a global distributed network of nodes.
However, there are still many barriers to Web3 adoption, including the high cost of transaction fees. Even though Web3 features are available at no cost, the relative cost of transactions is prohibitive to many people, especially in less developed nations. Fortunately, wallet providers are making progress to overcome this issue and make Web3 available to a wider audience.
The Web3 Foundation has provided funding to hundreds of projects. The funding has covered a wide range of technologies, including smart contracts, dev tooling, and UI development. So far, it has approved 415 projects from over fifty countries. The foundation is encouraging individual users to use web3 technologies to empower themselves. Most Web3 projects will explain in their introductory white papers how they will make their tokens available for public purchase. Some projects will even airdrop free tokens to generate interest.
The popularity of a cryptocurrency is another crucial factor for the future of the industry. If a cryptocurrency has widespread use, it will attract more investors. Its popularity will depend on how unique it is, as a coin with unique solutions will gain a wider audience in the future. However, there are also risks that need to be considered. As with all other types of investment, it’s important to determine your risk tolerance before investing in Web3 projects.
In the meantime, web3 advocates are aiming to rebrand crypto by convincing people that blockchains are the natural next phase of computing. Many critics of the Web3 project have compared it to a pay-to-play internet, in which every social interaction and activity becomes a financial instrument. In fact, web3 supporters argue that web3 will transform the internet as we know it and make middlemen obsolete.
Web3 empowers users. In fact, the most successful Web3 projects have active user-members who are eager to provide feedback. The most important factors for Web3 empowerment are participation and feedback. It’s not easy to build a successful Web3 project without these important factors. The success of a project depends on the willingness of its user-members to participate.
Web3 applications can be built by any organization or individual. Some of them are even created by volunteers who contribute their time without pay. However, large Web3 efforts usually require venture capital funding. Most VC firms understand software development and roadmaps, which is why they’re willing to invest in web3 projects.