Web3 is a decentralized digital environment in which people can interact, socialize, play games, and even conduct business. While these applications can be integrated with traditional bank accounts, they also offer advanced capabilities. Web3 applications are also popular in the realm of metaverses, which are virtual worlds in which users can interact directly with other users. Those who join metaverse communities are often motivated to contribute to ecosystem planning and governance. The possibilities for Web3 are practically endless.
Most Web3 projects are built on blockchain technology, which is a widely accepted method of distributing digital assets. Every contributor of a project owns a piece of the project. The benefits of blockchain technology include secure verification. This has led to the development of smart contracts and DeFi, which have been used for everything from diamond authenticity to accelerating the supply chains of companies like Walmart. Additionally, blockchain technology is also being used for bridge applications, which allow users to conduct transactions between two or more blockchains.
The Web3 ecosystem is a hotbed of activity. The value of cryptocurrencies has skyrocketed in the past two years. Bitcoin alone has over 1 billion unique internet addresses, and the wider crypto coin marketplace is currently worth more than EUR100 billion. It is also the fastest growing market in the past decade. The first three months of 2017 saw almost EUR10 billion of venture capital funding poured into the industry. Despite this rapid growth, however, Web3 remains a highly volatile sector.
Web3 has a number of skeptics. Some believe it is not practical from a technical standpoint. For example, blockchains are slower than standard databases, and the most popular blockchains cannot handle daily data loads. Moreover, there are no centralized services that can make web3 services perform well. This, they say, defeats the purpose of web3.
Web3 supporters say that this type of decentralized internet system will eventually replace the bigger centralized forces of Web2 by facilitating direct user interaction. For example, Web3 users can create decentralized social networks and “play to earn” video games where they can earn crypto tokens. They can also sell and buy digital culture. As the internet is increasingly decentralized, web3 advocates say, Web3 will upend traditional gatekeepers and usher in a digital economy free of middlemen.
Unlike Web 2.0, Web3 has a blockchain-based tech stack. It includes node infrastructure providers, off-chain storage, and indexing solutions. This technology enables Web3 to be faster and cheaper than its predecessor, but also offers some drawbacks. The tech stack has also not been perfected, and the user interface may not be as smooth as it could be.
Because Web3 is still in its infancy, it is still possible to invest in it at a reasonable price. However, it’s important to understand that the regulatory landscape for all cryptos may change and affect Web3 dApp token demand. Hence, you should consider your risk tolerance before investing.