Identity and the Metaverse: Decentralized control

What will our identity look like in the Metaverse? A decentralized Web3 suggests it’ll be completely in our control, but growing amounts of information stored online suggest otherwise.

“The Metaverse” and “Web3” are the buzzwords of the moment, with their concepts permeating across the worlds of fintech, blockchain, and now even mainstream media. With decentralization thought to be at the core of the Web3 Metaverse, the promise of a better user experience, security and control for consumers is what’s driving its growth. But with users’ identities at the heart of the Metaverse, coupled with unprecedented amounts of data online, there are concerns over data security, privacy and interoperability. This has the potential to hinder the development of the Metaverse, but both regulated and self-sovereign identities could play an important role in ensuring that we truly own our identity and data within this new space.

Related: Digital sovereignty: Reclaiming your private data in Web3

What is the Metaverse?

Although the concept of the Metaverse has been around for a while, it was recently brought into the spotlight when Mark Zuckerberg chose to rename his company “Meta” (to the annoyance of many in the blockchain community!). With the digitalization of many aspects of our lives already underway, many argue that the Metaverse will touch everyone’s future, and it’s set to significantly change the way we interact with technology.

It’s widely contested as to what the Metaverse will look like and consist of, but it’s thought to be a catch-all for many interpretations in which the Metaverse will replicate the physical world in a digital context and enable similar interactions to what we experience in our day-to-day lives. In theory, it will encompass augmented reality, the digital economy and Web3.

Related: How NFTs, DeFi and Web 3.0 are intertwined

Inclusion and identity

The Metaverse presents an infinite number of opportunities for people and businesses from various sectors and differing needs. It was recently stated that one of the biggest changes within the Metaverse would be inclusion, meaning anyone with access to the internet will be able to utilize its benefits. This includes the 1 billion people worldwide who are currently unbanked finally being able to access the global economy via the Metaverse.

Notably, digital identities will lie at the core of the Metaverse, ranging from a digital avatar to customize using augmented reality to the ability to automatically book a restaurant online. It will give people of all genders, ages and backgrounds the chance to express themselves in new ways and will allow for new types of interactions and communities to form online. In this regard, some argue that it’s thought to be a safer space for any person to thrive in compared to the real world. However, with more data than ever being stored online comes concerns over trust and its privacy.

Related: The creator economy will explode in the Metaverse, but not under Big Tech’s regime

The decentralization of power and control

Blockchain technology using a decentralized model will underpin Web3 and the Metaverse, which is predicted to offer new levels of openness. Web2 tends to be thought of as a few centralized tech companies that harvest users’ data, and this practice has received criticism due to surveillance and exploitative advertising. In contrast, Web3 will be the opposite, which will empower all those involved, with users owning their digital assets, personal data and identity.

However, with such a huge number of players involved in creating and maintaining the Metaverse, ranging from those building the underpinning technologies to NFT creators and virtual reality and augmented reality producers, as well as the vast amount of sensitive information online, there are concerns as to whether users will actually have full control over their credentials. We’ve already seen the potential for damage through Facebook’s data breach a few years ago, and Cointelegraph recently highlighted a Facebook whistle-blower who has already raised concerns about the privacy of users’ information shared with Meta in the Metaverse.

The importance of self-sovereign identities

Forward-thinking tech companies are a step ahead of the game, though. A few of them have recognized the potential issue over control and privacy and have begun to develop game-changing solutions to ensure the decentralized control and protection of users’ information. They believe that the Metaverse needs to be designed on open standards, with self-sovereign identities (SSI) being the silver bullet in addressing trust within the Metaverse.

SSIs are digital identities focused on verified and authentic credentials linked to real-world verification data, such as biometrics, that are managed in a decentralized way. By utilizing blockchain technology and zero-knowledge proofs, users can self-manage their digital identities without depending on third parties to centrally store and manage their data. Most importantly, this information is stored permanently within a non-custodial wallet that is controlled by the user and accessed temporarily within the Metaverse when the owner decides. This verified data will give them access to and ownership over their assets by simply being themselves, and it is thought that this will fundamentally change the way data is owned and controlled by that user.

Related: Self-custody, control and identity: How regulators got it wrong

What role will regulation play in this?

Nevertheless, many argue that regulation also needs to play an important role within the Metaverse in order to give both consumers and businesses the confidence to operate in it and ensure that their data and identity is protected.

Twitter co-founder Jack Dorsey recently tweeted how he believes that Web3 won’t necessarily increase users’ power in the way that many predict, since it will simply take that power away from the government and put it in the hands of venture capitalists investing in blockchain, or big tech companies like Meta. And, for this reason, we need regulatory oversight.

Many believe that countries will need to embrace the digital economy and Metaverse in order to compete in the global digital and economic spheres, but many of the existing regulations in place will need significant expansion to cover the Metaverse. We’ve already seen growing governmental regulation of the crypto space in the last few years, ranging from outright bans of crypto transactions in China to El Salvador adopting Bitcoin as legal tender, but in terms of identity and control of data in the Metaverse, there’s a long way to go. The European Union’s General Data Protection Regulation (GDPR) and the U.K.’s Data Protection Act could certainly play a part, but improvements are needed if we are to effectively protect consumers and the data they provide.

Related: The new path to privacy after EU data regulation fail

It’s clear that the Metaverse will lead to seismic change, with this new system architecture likely disrupting people, places and economies. With the hope of a new and better experience for users that addresses the issues of today, there are also huge levels of uncertainty surrounding the use of individual data. With new technologies emerging, there’s a considerable amount of preparation and consideration needed to ensure the Metaverse develops in a way that benefits everyone involved, and with identities at its heart, these factors are more important than ever.

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The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.