Last week, Shoosmiths hosted an event with leading industry body, techUK, labelled ‘Redefining web 3.0: Emerging economies, metaverse technologies and the new age of the internet’.

During this event we heard directly from representatives from the sector, who delve into the business potential created by the merging of web 3.0 and Metaverse technologies. We explored how blockchain technology facilitates data ownership and peer-to-peer transactions, as well as the creation of immersive worlds for socialising and collaboration. The event also discussed how the rise of a digital asset economy through the tokenisation of virtual goods and experiences, will interact to ignite new business models and opportunities in sectors such as retail and gaming.

The event began with opening remarks from Laura Foster, head of programme - technology and innovation, techUK. Setting the tone for an afternoon of exploring and navigating technologies that for some may seem alien, but for others, an asset to their business in the modern world.

Redefining the metaverse and web 3.0

In this opening presentation, Rory Daniels, techUK's programme manager for emerging technologies, argued that the terms 'metaverse' and 'web 3.0' are conflicted, contested and very much still under construction.

He went on to establish that the metaverse is a broad spectrum of virtual worlds that enable users to interact with each other and with virtual objects in a fully immersive and interactive environment. Rory explained that metaverse-like environments are expected to become a major platform for business, entertainment and social interaction and that it is already being used by a growing number of companies and individuals around the world. These will incorporate a variety of emerging technologies in which the UK is already a world-leader, including Artificial Intelligence.

Web 3.0 is a next-generation version of the internet that is, at least in principle, more decentralised than previous iterations. This brings with it the possibility of creators, as opposed to large platforms, exerting significant influence over the internet's protocols and applications. Web 3.0 is seen by many as the foundation of the metaverse, as it enables consistency and interoperability across metaverse experiences and gives users more control of their digital selves—their identity and representation, what they own and who has access to the data they generate.

Market size predictions for 2024-2030 put the UK firmly in 4th place behind Japan and China, with the US taking the lead. Key challenges faced by the UK include the digital skills gap, access to capital and lack of suitable regulation.

How do we build the metaverse and what are the technologies that underpin it?

The first opening panel, moderated by Shoosmiths partner, Prakash Kerai, had one clear answer for all: that the metaverse is a complex and rapidly evolving concept that is being built using a variety of technologies. A bold statement was made by the industry experts, that the capital ‘m’ in Metaverse, does not yet exist as the technology has not yet been invited to make it possible. The current metaverse we know currently comes under three brackets: consumer market, enterprises and industrial (digital twins). The metaverse has a state of play currently as a centralised vs decentralised market, where the latter is using blockchain technologies and not run by central corporates. 

A question was asked during the session around why do we need the metaverse? The panel debated that the metaverse is already here, but the tech we need isn’t and that we are changing the way we interact with one another and the metaverse is everywhere currently where it can be applied. Most importantly, we should note that there isn’t just one metaverse and we run the risk of being disconnected from each other and thus fragmented unless standardisation comes into fruition. A land where digital assets are transferable between all metaverses, is a clear goal to set for the future. The metaverse was then compared to the public’s conception of the internet in the 90’s and pedestaled as having limitless possibilities over the next few years. 

Real life examples where the metaverse has already been used, include the real estate market, where viewing properties and offices is now able to take place remotely and in medical trials surgeons practice procedures. There is also opportunity in banking where ‘virtual lounges’ allow customers to meet with bankers remotely and make financial transactions. The most active pick up within the market sits within entertainment and gaming, alongside a large pickup from the aerospace and defence industries where it looks to solve both environmental and expense issues with completely virtual trials being able to take place, allowing them to become sustainable practices. The metaverse has also been seen to break down physical barriers in solving the skills gap by enabling workers to train fully remote and not be location dependent to carry out their work. Other exciting examples include varied use within pitches & presentations by consultancy firms and within the fashion & retail market with a move away from 2D applications and marking the experience much more immersive when buying online.

The panel noted that some of the key technologies that underpin the metaverse include virtual and augmented reality, blockchain and advanced networking and connectivity solutions. Virtual and augmented reality technologies are used to create immersive and interactive environments, while blockchain technology enables secure and transparent data ownership and peer-to-peer transactions. Advanced networking and connectivity solutions are also essential for providing the high-speed, low-latency connections required for seamless interactions within the metaverse. As the metaverse continues to evolve, it is likely that new technologies will emerge and play a role in its development.

Challenges discussed by the panel again highlighted the need for regulation in this space through clear policies, such as the recent Interpol paper, where virtual crime reporting is set to become normality. They also highlighted privacy and cyber security as the biggest threats to success, alongside a need for education to allow for understanding of the correct uses of the technology involved. 

A pivotal issue was raised about user interface adoption where more invasive technologies are being developed such as implant chips, and the need for data centres to be well equipped enough to deal with the demand needs. Thus, calling for a national strategy from UK government to help address these challenges.

Panel Members included Dr Christina Yan Zhang, CEO and founder, The Metaverse Institute. Rajesh Sadhwani, managing director - banking & capital markets, DXC Technology. Miquel Vidal, head of extended reality solutions, CBRE. Erika Bosch Ramirez, product designer, Volta.

The event then sought to give the audience a real flavour of what they were talking about in action and invited demonstrator mXreality to come and enlighten the participants with their kit during a networking break. With a showcase of various Metaverse environments, highlighting the technology's applications in events, onboarding, training and education. Their online 3D Metaverse Hub allows users to explore, connect and interact in simulated environments.

Demonstrators included mXreality Ltd, Arcadia Consulting Inc and Digital Urban Ltd.

Regulating the metaverse

Sam Tyfield, partner and co-head of the Blockchain and Digital Assets Group at Shoosmiths delivered a presentation highlighting that regulations in the metaverse refer to the rules and guidelines that govern the behaviour of users, businesses and other entities within the virtual world. The authorities responsible for implementation and enforcement of these regulations vary depending on the jurisdiction and the specific regulations in question. For example, in the EU, the Digital Services Act (DSA) established a regime that requires social media platforms to manage risks that illegal or harmful content and activity may pose to users and society. In the UK, there is the Online Safety Act 2023, aimed at protecting children and enforcing age limits and age-checking measures.

The extent to which businesses can self-regulate in the metaverse is a topic of ongoing discussion and debate. Some argue that businesses should be given the freedom to self-regulate, while others believe that external regulation is necessary to ensure that businesses operate in a responsible and ethical manner.

Regulation of users in the metaverse may differ from that of providers. For example, users may be subject to rules governing their behaviour and conduct within the virtual world, while providers may be subject to regulations governing the content and services they offer.

Regulators and industry can work together as discussions on regulating the metaverse evolve by engaging in open and transparent dialogue, sharing information and expertise and collaborating on the development of effective and proportionate regulatory frameworks. Some countries, such as Japan, are already adapting to the opportunities and risks posed by the metaverse by establishing initiatives such as the “Web 3.0 Policy Office” to foster interoperability in the metaverse.

Governance in the metaverse may involve a combination of self-regulation by businesses and users, external regulation by authorities and collaboration between regulators and industry to develop and implement effective and proportionate regulatory frameworks.

Developing a business strategy for the metaverse

Charlie Neuner, immersive technologies strategy lead at PwC, provided a presentation on the value both web 3.0 and the metaverse bring to businesses both in the UK and further afield. It was acknowledged that the metaverse is not a sudden change, but a gradual one that has important implications for businesses. It will create new ways of communication and collaboration between businesses and customers, as well as new forms of value creation and delivery. However, the metaverse also poses challenges that require careful planning and trust-building. Business leaders should not overlook the potential and the risks of this emerging digital world.

Gaming in the metaverse

Moderated by Rory Daniels of techUK, a diverse panel of industry experts discussed how gaming in the metaverse will look and feel, plus what the key technologies are set to underpin this. Again, it was highlighted that there isn’t just one metaverse, but rather many within a digital hyperreality in which we will utilise web 3.0 technologies such as blockchain and NFTs to connect the different metaverses, acting as a glue. It was identified that many web 2.0 approaches, technologies and regulations, in particular a lack of interoperability, are currently slowing down the transition to web 3.0.

The panel then identified that any major developments within the industry can be expected to be seen in the gaming sector over the coming years are largely dependent on the UK continuing to ‘punch above its weight’ within the market. It was noted however, that it smaller businesses can find it challenging to set up a business and secure the necessary early-stage funding to develop a product or service, hire a team and scale accordingly. This is in contrast to the experience of many gaming companies operating overseas, which can often register and begin trading within a couple days, thereby limiting the UK's attraction to many international companies at the cutting edge of emerging gaming, metaverse and web 3.0 technologies.

Panel Members included Teddy Keefe, senior business development manager, Tencent. Tom Fiddian, head of artificial intelligence and data economy programmes, Innovate UK. Gina Nelson COO / art director, Oxalis Games. Robby Yung CEO, Animoca Brands. 

Summary

The event concluded with a lively networking session, where the audience had the opportunity to ask questions and share their views on the metaverse and web 3.0 with speakers and other delegates. Some of the topics that were discussed included the ethical and legal implications of the metaverse, the challenges of ensuring security and privacy in a decentralised environment, the potential impact of the metaverse on social and economic inequalities, and the future of work and education in the metaverse. The speakers also shared their insights on the current trends and opportunities in the metaverse and web 3.0 space, as well as their predictions and recommendations for the future development of these technologies. 

The event provided a platform for engaging and informative discussions on the metaverse and web 3.0 and showcased the innovative and diverse perspectives of the speakers and the audience. It also demonstrated the importance and relevance of these technologies for various sectors and industries and highlighted the need for collaboration and standardisation to ensure the metaverse and web 3.0 can reach their full potential and benefit everyone.