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What Does Web 3.0 Mean For Scale-Ups?

It’s a term that’s often thrown around, but less often understood. And it joins cryptocurrency and NFTs as spaces that investors are increasingly pouring their money into.

As an industry, Web 3.0 is already making millions. But there’s still hesitancy among business leaders. As with any new idea, it comes with a risk – and an opportunity…

Photo by André François McKenzie

What is it?

First, let’s get to grips with Web 1.0. This was the first version of the internet, where people just read stuff on a website. Web 2.0 became a read-and-write web, where people could change and add content. Web 3.0, then, is where people can read, create and take ownership online.

There’s no one in charge of 3.0 – no central authority (like YouTube or Facebook) decides who posts content. In other words, it’s decentralised. That’s where blockchain comes in, creating an environment that’s trustless, permissionless, and shared. It also paves the way for cryptocurrencies to fund transactions, NFTs to represent unique digital items, and the metaverse to act as our virtual world.

What are the opportunities for scale-ups?

From phasing out traditional banks to conducting therapy in online spaces, there are countless ways to rethink today’s business activities and recreate them virtually. Scale-ups today stand at the bottom of the curve.

Like electric vehicles ten years ago, it’ll be this technology that dominates the conversation tomorrow. And no industry is off the table. Even education.

If a learning organisation took up real estate in the metaverse, they could create online classrooms. These spaces could use avatars and virtual environments to change the way we see open universities. The reward? That scale-up becomes the benchmark for e-learning.

Photo by Terry

What are the risks?

The industry is young. Scams are common, and the longer they stay that way, the less likely the public will embrace Web 3.0. Scale-ups are also finding out the hard way that there’s very little support in the event of an attack or claim.

The developers behind the crypto game Axie Infinity were hacked in March 2022. A group connected to North Korea is the prime suspect and they made off with $625 million in Ethereum. The question is, if an investor in this project decided to sue the developers for a loss of income, are they covered?

Hard to say. There’s currently no back data to help underwriters understand the level of risks or their frequency. Web 3.0 is effectively an unregulated market. Again, it’s a bit like when electric vehicles first came on the scene, and insurers were worried about the availability and cost of parts, battery fires, and cybersecurity.

Photo by Kanchanara

How can Capsule help?

When it comes to insurance, don't assume standard policies will recognise work in this space. A lot will have exclusions because it is so new and has very little claims history. You’ll need both specialist cover and a specialist service.

Capsule goes above and beyond what a traditional broker would do to ensure your insurance programme meets your needs. Switching to us is easy if you’ve already got a partner in place, or you can contact us to find out more.

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Capsule Insurance Services Limited t/a Capsule are an Appointed Representative of James Hallam Limited who are authorised and regulated by the Financial Conduct Authority (FCA), under Firm Reference Number (FRN) 134435. Capsule's FRN is 948838. Registered in England and Wales company number: 13340821. Registered office is 48 Belle Vue Terrace, Malvern, England WR14 4QG.

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