Into The Metaverse: Insurance for Digital Assets
The Metaverse is Here to Stay
Whether the physical world is ready or not, the metaverse is here to stay. While tech giants race to stake control of web3, at its heart, the movement emerged out of tight-knit communities with a shared goal of decentralization powered by blockchains and the transparency it can offer. While much of our work and personal relationships have been further confined to the digital realm in the last two years due to Covid-19, it’s only expedited the natural progression of the crypto economy.
Let’s be honest, zoom just wasn’t cutting it. Over the past year NFTs, digital real-estate, and the rise of DAOs are what everyone seems to be talking about, but beyond the exciting new economic, philosophical, and technological possibilities on the horizon, digital ownership brings forth practical questions regarding security and vulnerability.
As NFTs and digital assets make their way into the mainstream, Eminem and Britney Spears are rumored to have purchased an ape. It’s all very exciting and sensationalist, but at the same time, there are also constant stories of apes being hacked and stolen. Just recently Todd Kramer, an NYC art dealer, had his digital wallet hacked. He lost an estimate of 2.2 million dollars. Cases like these happen more often than we think, and there isn’t much that can be done to help the losses.
While we’re pushing forth in full force, some basic logistics are getting left behind, like the rising need for metaverse insurance. Along with the ability to own and trade digital assets comes the responsibility to protect those assets, and there’s no bulletproof method... If your crypto wallet gets hacked there is no support line you call, and this kind of theft can happen to anyone. The same aspects that make web3 exciting raise security issues that need to be resolved without major corporations taking over.
Was the Internet Ever Really Safe?
Web 2.0 solicited users with a certain level of comfort, lulling the general public into believing the internet is a super-secure space. Web services and social media apps have been marketing the promise they will take care of their users, for the mere price of all our data. A stalker’s dream: a breakdown of our online activities categorized neatly into demographics is a trade for a free app; or in other words, a marketing goldmine.
Putting aside the dopamine high from getting “likes”, web 2.0 truly feels like an aggressive version of a mall from hell where we are constantly forced to log in into our Facebook accounts again and again. Trapped in a spooky algorithm that is occasionally infiltrated by your republican aunt. The breakdown of wants and needs is so specific that some folks delve into soviet-era-style paranoia: “can the machines hear our thoughts?” We may never know, but what we do know is that data breaches are no joke.
Every once in a while I clear my spam box to discover different companies are notifying me of a lawsuit against them, I could join the court case and win back $8. I passed. What’s exciting about web3 is that we are transforming from users into players, the nature of the stakes changes. The middle man is cut out, which is great for all the reasons stated above, but the issue of insurance must be addressed in a way that supports creators and small businesses to keep the metaverse economy diverse and decentralized.
Insuring Digital Assets
Web3 is often described as the wild west, but a closer look at our recent digital reality reveals serious security gaps in web 2.0. Many creators make a living off their social media accounts, but accounts get hacked, held hostage, or simply shut down by Instagram if they decide posts go against their community guidelines. People work on their accounts for years, growing a huge following and communities, and in one day all their contacts, documentation, and projects disappear.
Digital assets are not a new phenomenon. A social media presence is a revenue-generating digital asset, people manage entire careers out of their dms. When those successful accounts get hacked, there is no support to retrieve them, and “backup accounts” can’t bring back what’s been lost. This notion of security, or that we are taken care of by the apps or brands we consume is proven to be more complicated than meets the eye. As we traverse into decentralization, new risks arise, we’ll need to be responsible for ensuring the safety of our digital assets be it DAO tokens, NFTS, or just good old social media presence.
Can be Security Without Centralization?
In light of these massive thefts and hacks, many critics are questioning if the vision of web3 isn’t an idealistic dream. In a decentralized web where there are no main platforms, and each person is responsible for themselves, there is no bulletproof way to secure the safety of digital assets no matter how high the stakes are. Hardware wallets, though less likely, can also get hacked. Insurance is the only solution, but most digital insurances are extremely expensive and inconvenient for small businesses and creatives.
Notch answers the need for new tailor-made insurance that suits creators, gamers, and collectors but one that doesn’t compromise decentralization. If you were to purchase an expensive painting, you would naturally get insurance to cover its value. You don’t need to cover your entire house. Same with the Notch, you can insure your Instagram account or a single NFT. Providing people with the freedom to secure their own assets without the backing of a central platform is key to keeping the future in the hands of the communities rather than the mega-companies that are trying to shape the metaverse. WAGMI. Follow Notch on Instagram and Twitter for more updates and information.