In the last three chapters (chapter 1, chapter 2, chapter 3) of our basics to boardroom learning guide we’ve spoken mostly about acquiring assets like Bitcoin, holding them, and waiting for the value of that asset to rise. But the cryptocurrency space is so much more than Bitcoin.

At last count, there were more than 11,000 cryptocurrencies currently live and available to engage with, according to Nomics. Inside that there are a huge range of currencies and tokens that perform a number of unique features that help their networks do certain things. 

How to Invest In Cryptocurrencies: The Basics

If you’re new to crypto, the idea of trying to invest in currencies like Bitcoin and Ethereum can seem daunting.  But fear not, we’re here to help you understand how to invest. In this series, in association with AAX, the world’s first digital asset exchange powered by the London Stock Exchange, we’ll take you from the basics all the way to the boardroom.  We’ll show you the investment landscape, the different types of investments and what are the risks and rewards of choosing different tools to...

In this last chapter we’re going to be running through a few examples and how you might use some of your earnings to help power the world of Web3. 

The Web's Evolution

To understand what Web 3 is, we first have to understand the previous versions of the Internet.

The first phase of the Internet and can be characterized by the way users initially interacted with the web. Most users, during the first iteration of the web, were passive consumers of content. In other words, Web 1.0 was about reading and not writing. It was static instead of dynamic. This changed with Web 2.0.

What is Web 2.0?

The next major phase of the Internet was all about interactivity and users. 

In this phase, users created most of the content on platforms such as YouTube, Facebook, or Twitter. This Internet was more social and collaborative, but that usually came at a price. The downside of this more participatory Internet was that by creating content, users were also providing personal information and data to the companies that controlled these platforms.

What is Web3?

Web 3 is the next step of the Internet. It is currently still being built, so there is no single, established definition yet of what Web3 is or will be.

In general, however, Web3 refers to an Internet that is made possible by decentralized networks, such as Bitcoin and Ethereum. The key innovation of these networks is the creation of platforms that no single entity controls, yet everyone can still trust. That’s because every user and operator of these networks must follow the same set of hard-coded rules, known as consensus protocols. 

What are Staking and Lending? The Crypto Investment That Can Earn Interest

Want to trade NFTs but don't want to make it a guessing game? Take Degen U's new course, Mastering NFT Trading, and earn an on-chain certificate. A top instructor will help you seize the right moment to trade—and have fun while doing it. Staking and lending are ways crypto investors can attempt to profit from crypto. If buying a cryptocurrency and holding it is the first step on the ladder of investing in cryptocurrencies, lending and staking are step two. While staking helps secure a network, l...

The secondary innovation is that these networks allow value or money to be transferred between accounts. These two things—decentralization and Internet money—are the keys to understanding Web 3.

But they go further still. New networks where value is created and held in the utility of that network are being invented and created constantly, as we explore below. 

What are some examples of Web3 projects?

Below are a few examples of how different assets can use Web3 technology to create different types of value. 

Filecoin 

Filecoin is a decentralized protocol which enables anyone to rent out spare storage space on their computer. Likewise, anyone can buy storage on the network. Think of it as Amazon Web Services or Google Cloud, but instead one company controlling the flow of data, anyone can take part in the process.

What Is Filecoin and How Does It Work?

If you're struggling to get your head around Filecoin, fear not. While there is lots to learn about the decentralized file sharing service, we've boiled it all down into a simple explainer video, which you can check out below. In a nutshell, Filecoin is a decentralized protocol which enables anyone to rent out spare storage space on their computer. Likewise, anyone can buy storage on the network. By allowing anyone in the world to join the network, it can create a huge source of data storage. A...

The token, FIL is the currency by which users buy storage and storage holders are paid in. 

Golem 

If Filecoin is looking to disrupt the storage industry, Golem wants to disrupt the cloud-based computing industry. 

Golem is a distributed computing platform, providing shared computing power that users can access for a fee. The platform lets you rent out your computer’s spare resources to others who need the additional power to perform complex computations and tasks, and for those in need of computing power to rent from others instead of cloud-based services like Amazon or Google.

Basic Attention Attention 

BAT is a utility token, designed initially as part of a whole new digital advertising platform known as Brave. At its heart is a web-browser that blocks adverts and keeps personal data and people’s identities, protected. 

While it keeps people’s identity secure, however, BAT also commodifies users’ attention. The distributed ledger it's built on can collect accurate data on where the adverts are going and just how effective they are. 

What is Basic Attention Token (BAT)?

Love ‘em or hate ‘em, the internet relies on advertising. Revenue collected from selling ad space on websites can pay for both staff and content. Without an effective advertising model, many online businesses would struggle to survive. However, online advertising has more in common with the Wild West than Mad Men. An overly complicated supply chain means advertisers pay substantial sums for very little return. Hackers meanwhile, set up fake websites to collect revenue for ads no one actually see...

Armed with this information, advertisers can create better marketing campaigns and budget better. The network also uses a token, the BAT, that can be used to pay publishers for their ad space and even to compensate users for watching or clicking on their adverts.

The whole point is that users can commodify their attention and earn directly, rather than feel exploited by advertisers.

Why invest in Web3?

Imagine someone told you in the late 1980s that there was this technology (the internet) that would change the way we communicate, work, meet each other, travel, and entertain ourselves, but this future wouldn’t be realised for another 15 years, would you invest in it? 

The Web3 age is creating new ways to quantify the value of our time, our attention, our computers and our hard drives. It also helps create opportunities for investors to gain access to tools and services that might have only been available to institutional investors in the fiat world.

How to Invest In Cryptocurrencies: Bitcoin Futures

In our last chapter on investing in crypto, we explored how staking and lending can help grow your holdings passively. In this chapter however, we’re going to be taking a step onwards and looking at how you can increase your holdings by investing actively.  Below we’ll explore Bitcoin futures in more detail, how they work, why traders use them, the risks involved, and where to get started.  What are Bitcoin Futures? First, it’s important to understand what we mean by futures trading. As a first...

Investing in Web3 assets also helps bring about this age, as these projects need support in their early stages to reach critical mass. 

The future

Now that you’ve come to the end of this series, AAX has a lot more resources on trading strategies that include all the ideas we’ve mentioned above. Head on over to AAX where you can build on your trading knowledge. 

Disclaimer: 

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.