And why you should explore web3
In the past 2 years, I bet you’ve been told by at least one person that you should get into crypto. Furthermore, I’m guessing you never got a good reason or explanation as to why either. We all have someone like that in our lives. I’ve been that person myself and done it to others.
The obvious question is why? What can you actually do with a digital wallet and some ETH tokens? What’s the point of getting into crypto and why should you care?
In this article, you’re going to find out what you can do in web3 by exploring 6 real world use cases of crypto and how you can get started.
One of the most prevalent and relatable use cases for cryptocurrencies is immediate, peer-to-peer (P2P) transactions on the blockchain. Let’s say you’re based in Edinburgh, Scotland, and your daughter attends college in San Diego, California. Suddenly, your daughter breaks her arm and is rushed to the hospital. The ambulance ride alone could cost her $5,000 and she just spent all her money on a holiday to Cancun. Using a cryptocurrency on a blockchain like Ethereum, you can get money into her wallet within 5 minutes, no matter where you are in the world. No questions asked. No 3 day wire transfer window. No banks getting in the way. Fast, friction free, and permissionless.
There are of course thousands of other examples. The point here is that instant P2P transitions are tremendously valuable. In today’s cryptomarkets, however, you do incur some volatility risk when doing this. But if you use well established tokens such as ETH or BTC, you significantly reduce that risk. And to be clear, volatility risk in the fiat world is very real also. In September of this year, the British Pound tanked against the US Dollar in a matter of days. So technically, you’re incurring more risk with a wire transfer since it takes longer to arrive. All you need is a digital wallet like MetaMask to do this.
Fun fact, in the week of October 7th, Bitcoin was actually LESS volatile than the Dow Jones Index! The future of finance might be closer than you think.
By now, you may have heard of NFTs? Sadly, most of the mainstream media attention is focused on the NFT projects that reach astronomical prices but don’t have much by way of practical application or use case. If you dig past the noise, however, you’ll find that there’s a whole world of NFTs that can act as an alternative cash flow investment. If you’re looking to diversify your portfolio, why not have a look at music NFTs for example? They offer partial ownership in songs or albums and pay you consistent streaming royalties. Additionally, they tend to have strong token holder communities behind them who are working hard to boost the value of your investment over time. Pretty cool!
I’ve started building my alternative cash flow portfolio using Swedish NFT platform AnotherBlock, but there are plenty of other great projects out there that offer strong investment opportunities. You can scoop up music NFTs on the secondary market as well using OpenSea or NiftyGateway.
If you’ve ever taken a loan before you’ll be familiar with the terrible user experience it offers. Regardless of your financial situation, does the bank make you feel like a cherished customer when you go to them and ask for money? Probably not.
In web3, you don’t need to ask anyone. Connect your wallet to Aave or MakerDAO and take out a loan in minutes, no questions asked.
Or what about if you’ve saved some extra money and you’d like to earn some yield. Do you think the bank will share the rewards with you when you hold that money in their savings account? Unlikely. Now you can go straight to Aave and deposit your money as liquidity (other people can loan your money) and make the market rate. Or, how about staking it in your favorite Proof-of-Stake protocol and making a steady yield? It’s all available in DeFi.
Ever had a great idea for a creative project or business but not the capital to get it off the ground? Websites like Kickstarter and GoFundMe pioneered the era of crowdfunding. These have been a gamechanger for many artists and entrepreneurs. However, they are severely limited by the country you’re in (which limits your number of potential investors) and you have to adhere to your country’s legal framework. This often means a lot of paperwork and potentially needing the aid of an attorney.
On a blockchain like Ethereum, you can raise funding for your project from people all around the world in minutes! By designing a smart contract that dictates the rules around how the funds are spent, investors can feel confident in funding your project even though they’ve never met you. All you need is a digital wallet. A cool place to get started with decentralized funding is Gitcoin Grants.
We all have digital lives and personas, whether that’s your social media profile, you’re YouTube channel or your metaverse avatar. However, these personas are spread out across multiple platforms and our data is mostly owned by a handful of corporations. We have digital lives, but we don’t have digital identities.
By completing activities on a blockchain network with your digital wallet, you start to build your web3 reputation. Your wallet activity, transactions, coins, NFTs, and data, all make up your digital identity. Why is this a valuable use case?
Well as I said, we’re not slowing down digital adoption. Eventually, we’re going to be evaluated against our wallet activity by friends, peers, employers, lenders, and investors in the same way as when you judge someone by their Facebook profile or your bank evaluates your credit score. Start building your digital identity today and get your reputation ahead of the curve. You’ll benefit from this sooner than you think.
If you’re not sure how to get started, you can jump into Galxe and complete web3 quests and get rewarded with credentials and NFTs, showcasing that you know your way around web3. Another great place to start is Optimism Quests.
Although this isn’t investment advice (as per usual), crypto offers us a whole new dimension to investing. Each investable asset in the web3 universe warrants an article by itself, however, I’ve listed off some incredible options below to get you started.
- Buy and hold crypto tokens. Get started with Coinbase or Gemini.
- Buy income producing NFTs such as ownership in music. You can find plenty of these on OpenSea. Alternatively, you can check out Audius, Royal, and AnotherBlock for upcoming music NFT drops or explore Rarible for cool NFTs.
- Get exposure to real world assets using your crypto through Synthetix so you never have to leave the web3 ecosystem.
- Stake your favorite crypto tokens such as Ethereum or Solana for consistent returns. You can use a variety of tools for this including Exodus, Coinbase, Ledger Live, Lido, and RocketPool.
- Buy land in the Metaverse such as Decentraland or The Sandbox.
The options are endless and new investment opportunities emerge all the time. Don’t go and bet the farm on these tools. Just start with a few percent of your portfolio and enjoy getting wider exposure with your capital.
Joining a decentralized autonomous organization (DAO) or even starting your own, can be one of the most impactful and empowering things you can do in web3 today. DAOs are powerful collectives, all united behind a common goal, and self-governed through code. It’s democratic communities, the way they were always meant to be. Transparent, irrefutable, fair, and inclusive.
Imagine what you could build with an army of people from around the world who believe in your vision. Could you build an independent United Nations? Or perhaps solve climate change? Maybe you want to raise the standard of your local community by refurbishing the town square. DAOs make this more attainable than you can imagine.
If you’re interested in starting your own DAO but not sure how to begin, I recommend checking out Aragorn Network.