Recently, if you follow the KOLs and representatives of many large funds in the crypto market, you have certainly come across a lot of Web 3.0. So do you really understand this keyword correctly? And what to prepare to have early investment opportunities? Let’s find out in the article below!
What is Web 3.0?
First, you need to know about Web 1.0 and 2.0. I briefly summarize the difference of these 3 generations as follows:
- Web 1.0: The proprietor of the internet site is the only man or woman who gives info and written content about their items.
- Web 2.0: All participants can contribute and share written content.
- Web 3.0: information platform, the contents will be shared in between lots of various web sites.
A definition shared by Chris Dixon (representative of the a16z fund) to refer to also for a far more full see of Web 3.0
We are now at the beginning of the Web 3 era, which combines the decentralized, community-governed ethos of Web 1 with the advanced, modern functionality of Web 2.
— cdixon.eth (@cdixon) September 26, 2021
“We are entering the era of Web3, a hybrid version of the decentralized (community-run) Web1 and the innovative Web2 operating model.”
web2 vs. web3 pic.twitter.com/onApIW32Ry
— Jack Butcher (@jackbutcher) November 22, 2021
The image in the above tweet also partly shows the difference in the “economicization” process between web2 and web3. Web2 is usually just simple likes and shares, while web3 can help users transfer value.
Web 3.0 Fragmentation
Here’s how to divide my personal array, so that it’s easier for you to visualize Web 3.0.
Group 1 – Infrastructure
The one to start with is the infrastructure layer.. This area normally focuses on information processing, technical difficulties so that Web three. can simply exchange info.
- Oracle – a decentralized marketplace for information validation.
- Storage: decentralized storage of information on the blockchain.
- Index: query information.
- Host Server, RPC: gateway to typical web sites to connect to the Web3 infrastructure.
Group 2 – DeFi Applications
Next are the Dapps. Usually, this class will be in the financial sector, helping to transfer value in the Web3 system. The products you often use on the exchange can be grouped into this group.
Within this array, you can subdivide into many different layers, including the components that make up a common DeFi ecosystem such as AMM-DEX, Lending, Aggregator,…
Group 3 – Applications in actual daily life
Finally, the Life Application class but blockchain technological innovation utilized. This is the closest degree to the finish consumer and its translation serves to carry Web three. closer to the consumer. Applications for enjoying video games, listening to music and producing written content can be incorporated in this group.
Misunderstandings about the Web 3.0
First factor, Basically, you are participating in the use of Dapps, blockchain, you are participating in the Web3. network. New items normally get the key phrase “Web 3.0” to make their tasks flashy, but you have to be cautious to prevent shedding funds emotionally and in accordance with the “macro view” of other individuals.
People often hear a lot about the keyword Web3 on social networks, discussion groups. However, I personally think that people are unknowingly referring to this Web3 concept into group 1 (i.e. infrastructure products) and group 3 (ie products near the finish consumer). Since then, Web3 has emerged as something very new, potential and… can be spent immediately so as not to miss the opportunity.
But… no. Those of you who are applied to experimenting and testing items in the DeFi ecosystem are by now working with Web3 in essence.
Second, Web3 still has a lot of problems, most of which stem from the core problems of current blockchain networks. I can temporarily list a few things as follows:
- Wallet connection: if you don’t often go “ape” (try to experience the product) DeFi, it’s still quite strange to save your seed phrase, private key, then top up to pay fees on the blockchain with any coin,…
- Transaction charge: As I pointed out in the mirror post, the value of publishing a post on the blockchain room is not low-cost (around $120). Although other chains declare they can take care of this Ethereum gasoline tariff trouble, having said that … they will have to sacrifice a number of other facets, particularly decentralization.
- Web3 is in which the worth is evenly distributed? Theoretically and ideally this is it. However, as I pointed out in the DeFi Discussion podcast on DAOs (autonomous organizations), this trouble nonetheless isn’t going to have an affordable answer.
Eventually, lots of people believe that Web3 will do well in overthrowing Web2 and the monopoly of substantial companies recent this kind of as Google, Facebook. Personally, I believe this situation is unlikely. Because most of the written content that men and women attain is as a result of the search filters of Web2 providers. What tool do you search for for a crypto project? Marketing tasks, attain customers from any social network?
Jack Dorsey (CEO of Twitter) also shared that the ambition to decentralize social networks can even take 10 years and decades. And technology companies themselves also face a difficult problem to balance between “Stability – Innovation”.
themselves also face a difficult problem to balance between “Stability – Innovation”.
What investment approach is reasonable?
With the 3 groups I listed above, I personally think each group will have a different growth rate, thereby forcing players to have different mindsets.
Infrastructure: slow but extended phrase
If you are interested in group one – Infrastructures, you have to be passionate about studying technological innovation. It is essential to comprehend the part of each and every array in the all round ecosystem. Moreover, quite a few projects in this field issue tokens, producing the investment barrier really substantial.
Also, due to the traits of the infrastructure, the advancement approach will get time, and if you want to “win fast”, I personally believe you are not appropriate for this group.
In return, the infrastructure is a substantial, nicely-invested merchandise group and demand is constantly incredibly steady for the reason that most items have to be created on the basis.
DeFi – Be flexible and follow the cash flow
The second group is financial products. This group should keep the same way of playing as when participating in DeFi ecosystems. Actively look for products to experience, know more to have the chance to acquire retroactively. Participating in cash-flow investments, because this game is very specific about money
Most of the items in the DeFi ecosystem there is a horizontal advancement (i.e. copying the model from chain A to chain B). Steps vertical advancement, i.e. an absolutely new merchandise model it is rather unusual in DeFi. Therefore, the advancement pace of this group, I think, is a bit slow.
End User – Risky but great potential
The last group (that is, closest to the end user), is the group with the strongest growth potential, simply because it is new. This means that the probability of failure is much higher than the previous groups.
The peculiarity of this group is that it depends a great deal on group one – Infrastructures. The game needs to perform smoothly, it wants large-pace technical assistance blockchain. In addition, the relation with Group 2 is also very close, because DeFi products help the project create markets and attract cash flows. Therefore, shell out interest to the updates and developments of the two preceding groups for far more info to make choices in this group.
In addition, because the customers of group 3 are often the end users, the marketing issue will need to be more focused. Pay attention to projects with the right marketing mindset and long-term to really find potential projects in group 3!
So we have gone through a few key ideas around the Web3 keyword. Hopefully, the above article will bring a lot of value to you.
Note, the over post is for informational functions only and ought to not be viewed as investment suggestions!
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Disclaimer: This article is for informational purposes only, not investment advice. Investor should research carefully before making decision. We are not responsible for your investment decision