Those who are connected to the Digital world know the worth and potential of the metaverse. Although the metaverse is young and there is much more to explore, there is a need for regulations in the metaverse. Without regulation, the metaverse seems to be a risky endeavour. For the metaverse to be a practical location to live and do business, it will need real-world security measures to prevent misuse, fraud, and financial loss. Regulation is time-consuming and difficult to implement on a global scale. However, metaverse developers may take charge and establish their own set of rules for behaviour in the virtual world. Regulators and designers of virtual environments need to work together to make sure users are secure in the metaverse if it’s going to succeed. In this guide, we’ll highlight the risks associated with the metaverse if it is kept unregulated. Later, we’ll discuss how regulation can keep us safe from these risks and how it can be implemented. So, let’s get going.
The Risks In The Metaverse
Companies are afraid to integrate the metaverse into their business operations because of its unregulation. They don’t feel secure as there are many risks associated with it. If it becomes regulated, companies will invest in the metaverse without worrying about their security. Let’s explore the risks in the metaverse if it is kept open but unregulated.
Scams And Fraud
Then there are the time-honoured dangers, such as fraud. The full extent to which the metaverse might be used by hackers is as yet unknown. However, we are aware that real-world security issues may occur in virtual environments as well, such as hacking and identity theft.
The value of goods and services is less concrete in the metaverse than in the actual world. The apparent worth of a non-fungible token (NFT) or other piece of virtual real estate is deceptive, and buyers of such assets have no recourse to refunds or other types of consumer protection.
Mental Health Problems
The threats to our mental health should also be emphasized. There is a high danger of trauma and bad mental health effects if the metaverse is similar to the actual world but is not bound by criminal law and offers more extreme experiences.
Metaverse Is Tracking Our Every Move
Over the last two decades, digital firms have perfected the art of monitoring user activity in order to create detailed profiles that they then sell to advertising. Although many people find this to be an outrageous breach of privacy, nothing has been done (at least in the United States) to address the issue. Furthermore, social media has become a destructively divisive force due to the aforementioned fixation with monitoring and profiling, which enables platform providers to target individuals with a personalized message that amplifies our current prejudices and assumptions, radicalizing populations.
This situation is much more dire in the metaverse. The system will monitor not just your clicks but also your movements, whatever you do, your friends, and the content and duration of your stare. The platforms will also monitor your facial expressions to determine how you’re feeling. Because of this, the metaverse’s governing corporations will be able to fully profile your answers, not just your actions. The problem isn’t simply that they’re keeping tabs on our habits; it’s that they can utilize that information to affect our beliefs and purchases.
Risks Of Losing Virtual Currencies
Since laws and new technologies sometimes lag behind each other, the metaverse is now unregulated and unsupervised. There are several ways in which this can be dangerous. To begin, the money we use in MMORPGs is not actual cash but rather virtual currencies or in-game items like Fortnite V-Bucks. The government does not guarantee the safety of any wallet or account used to hold digital currency. However, the risks of losing virtual currencies can be mitigated by using auto trading bots like Bitcoin Pro while trading metaverse tokens.
Can Regulations Reduce These Risks?
Maybe. If rules need to be established in every metaverse or even if they’re practically possible. More than 160 businesses are up and running in the metaverse right now, and that number is only expected to grow. In the absence of regulations, each of these businesses might theoretically operate forever. Unless the metaverse is regulated on a worldwide scale, it may be difficult to prevent an offshore investment vehicle from operating its own slice of the metaverse and individuals from other virtual worlds from accessing it.
The most probable scenario is that not all virtual worlds will be governed by laws, while others will be subject to laws governing things like privacy and the transferability of assets. In the second, there is potential for both loss and gain.
Some of the metaverse’s underlying technologies, such as immutable blockchains and distributed ledgers, may minimize transaction risks and the need for financial regulation. Blockchain not only keeps a public record of all transactions and ensures that no modifications can be made without being recorded, but it also makes that record available to all parties.
However, this type of traceability seems to go against the metaverse’s spirit as a whole. In a world where users may assume whatever identity they want, it might be difficult to enforce rules requiring users to verify their identities. One of the main draws of the metaverse is the fact that users may hide their identities, and not only from malicious actors. The monitoring and abuse of personal data is a concern for 55% of American internet users and 41% of those in the rest of the world who use the metaverse.
How Can We Regulate the Metaverse?
The first step is to reduce the amount of surveillance that is permitted. Since the platform providers will have access to everything we say, do, touch, and see in the metaverse, they should be prohibited from storing this information for any longer than is strictly necessary to mediate the created simulated experience. This would significantly restrict their ability to create long-term behavioural profiles of us. The public has to be made aware of what information is being collected and for how long. If they are tracking you, you should be made explicitly aware of its presence and intended use.
However, there should be limitations on the extent and kind of tracking that is allowed. Public pressure should be exerted to limit the use of facial expressions, voice inflexion, posture, and physiological data (such as heart rate, respiration rate, pupil size, and galvanic skin reaction) by advertising algorithms. This kind of monitoring may seem harsh, but it’s really the future we’re working toward. Marketers will exploit our unique physiological responses to hone their messaging and affect us at the moment unless we carefully govern the metaverse.
We must also expect that the metaverse will forego traditional marketing strategies like pop-up advertising and promotional movies in favour of a far more organic approach to marketing to us by introducing promotional items and activities that seem and feel like they belong in our environment. Any time a company or individual pays to have their virtual goods included in your augmented environment, you should be made aware of the fact that this is not a random occurrence.
Strong connections between online and offline identities, as well as adherence to many of the same principles that make the real world’s financial system secure, are necessary for any kind of financial regulation to be effective in the metaverse. Virtual reality will have a role in things like KYC regulations, tax laws, risk management practices, and so on as they develop. More control will be necessary as the metaverse advances toward realism. Metaverse-based asset classes may one day attract value in the same manner that traditional financial markets do, necessitating oversight and regulation similar to those found in the real world. Because there will be more at stake, more precautions will need to be taken.
Regulating the metaverse is difficult but without regulations on platform providers, we risk living in a highly mediated environment that seems and feels natural but is really being used by large businesses as a means of persuasion. We don’t want this future for ourselves or our children, therefore we need to have regulations in place right now.