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The metaverse is set to become a technological phenomenon, should the enthusiasm of tech innovators like Mark Zuckerberg, who recently rebranded Facebook as Meta, be embraced by business leaders and consumers. Zuckerberg terms the metaverse as “a set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you,” and believes that the potential of this new virtual landscape will only be realized once we begin to spend more time in the metaverse than in the real world. But what does the prospect of a virtual landscape where we spend all our time mean for our identities? 

Although we’re many years away from seeing the metaverse develop into the all-encompassing ecosystem that it promises to be, already many questions are emerging about identity in the age of Web3. Pertinent matters include how individuals and organizations can represent themselves online, and what digital identity will actually mean in the future. As we engage fully online for both social and business purposes, we will generate large amounts of data about who we are. How this data is collected and used will be a significant matter to address in the coming years. 

Precedence Research has estimated that the metaverse’s market size will be around $1.607 trillion by 2030, and this money-spinning prospect is likely to see businesses seeking to use big data to forge faster growth to capitalize on the opportunity. With this in mind, maintaining users’ trust will also be paramount to the success of the metaverse. 

But in a virtual world built around avatar-based communication and collaboration, how anonymous will the data we produce really be in Web3?

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The challenges of identity in the metaverse

Factors like Know Your Customer (KYC) and security will play a central role in ensuring that identities are protected in the challenging new landscape of the metaverse. The many avatars and digital currencies that operate within virtual landscapes will be linked back to digital profiles and properties that will be attached to a user’s real identity. Although avatars will make users appear anonymous to other metaverse users, regulators are already exploring the challenges that may surround identity and anonymity in virtual spaces. Although no universal policies have been instituted, there are already rules that can be enforced to counter fraudulent practices within the metaverse. 

As the metaverse matures, it appears likely that avatars will represent our metaverse “selves,” and direct-to-avatar (D2A) purchases will facilitate a sense of individualism while maintaining a degree of anonymity. However, these transactions will be required to go through an integrated digital wallet attached to the metaverse in question — which may have KYC security measures in place. 

Given the sheer value of the metaverse and the many properties that can be bought and sold within the landscape, identification that links users to virtual assets is essential. Although anonymity can be maintained in the metaverse, it appears likely that data from our profiles might be identified through malpractice. Similar constructs are likely to be in place for, say, age-restricted regions of the metaverse. 

Although true decentralization is much sought-after online, correct identification is likely to forge a safer digital environment for all users in the metaverse. However, given the sheer volume of interactions, actions and behaviors that will be exhibited, it’s essential to look deeper into how the profiles, credentials and avatars across the metaverse will be governed in the future. 

Exploring the future of identity

Here, it’s important to acknowledge the sheer scale of the role that avatars will play in bringing the metaverse to life. Although there will likely be a vast number of metaverses that users will be capable of accessing online, we can expect to retain our avatars in different virtual ecosystems. 

“Users will want to bring more than just the visual appearance of their avatar from one virtual world to another. They will also want to carry their online reputation, progression and achievements with them,” -Sebastien Borget, co-founder and COO of The Sandbox, explained in an interview with Cointelegraph

“Users should be able to use all their data as proof of who they are online. This will contribute to defining an individual’s true digital identity (or multiple ones since there can be many),” Borget added. 

Borget highlights that the vast quantities of data that a user will produce within the metaverse can help to build a more comprehensive identity online — which ultimately can work to create a digital footprint that can act as identity within more complex sectors like decentralized finance (DeFi). 

“Even in DeFi, a crypto exchange can loan you more to buy land if you prove you actually spend time building and playing in the metaverse. And you don’t want that data to be held in just one virtual world — in the true spirit of Web3, users shouldn’t have to be locked in one walled-garden platform to carry out their history and reputation,” Borget stated.

The idea of big data supporting actions like DeFi loans is an impressive prospect. Borget’s suggestion implies that our digital footprint will be so strong within the metaverse that we can instantly be considered and accepted for loans via smart contracts that self-execute based on our online behavior. 

However, building a digital identity based on big data can be an extremely dangerous prospect, too. Although Meta has sought to position itself as a key metaverse player, its leading social network, Facebook, has come under heavy scrutiny over its use of user data. 

With this in mind, our actions online must always be secured as we continue to generate masses of data through them. 

The necessity of trust

Considering the immersive nature of virtual and augmented reality, the metaverse may empower companies to look invasively into more personal parts of their customers’ lives. Biological readings like blood pressure, eye tracking, breathing rates and even more intimate factors can be used to generate information that can be exploited for marketing or political purposes. 

Selling personal data to advertisers the way social media companies do must be managed more robustly in the age of Web3. Failure to appropriately regulate access to big data could risk rotting the metaverse from the inside out before the technology has a chance to flourish. 

One solution may be found in self-sovereign identity (SSI), which looks at the control of information surrounding users in the context of the metaverse — paving the way for more ethically stored data. 

SSI can help to solve data security and privacy issues by removing the necessity of storing personal information in a central database, and allowing users to choose the data they store and share. With a platform that delivers effective decentralized trust, it may be possible for those participating in the metaverse to retain full control over what they share online. 

Although the metaverse is still many years from becoming a place in which to live, work and collaborate, it’s essential that all companies seeking to build this virtual landscape remain transparent about how they use data and approach the topic of identity. Although this digital landscape will be populated by avatars, the information they generate needs to remain ethically stored throughout. 

Dmytro Spilka is the head wizard at Solvid.

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