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Can the Metaverse Solve the Internet’s Identity Crisis?

The internet as we know it is undergoing an identity crisis of epic proportions. An identity fraud crisis, that is. Today, our fractured approach to digital identity is both inefficient for users and ineffective at preventing fraud. To surf the web is to endure endless friction, one verification event at a time. Nevertheless, despite all of the usernames and passwords, digital identity fraud has never been higher; in fact, last year, identity fraud losses reached a total of $56 billion. Fortunately, there is hope. The metaverse presents a unique opportunity to solve the internet’s identity crisis, but the window to act upon this is closing quickly. In order to prepare for this new iteration of the internet, it’s critical that we anticipate how the metaverse will transform current perceptions of identity and recognize how digital identity technologies can secure this bright new future.

Since its inception, the internet has both challenged and reified the notion of identity as a fixed entity. On the one hand, the internet allows all of us to hide or alter our identities if we so choose. For better or worse, individuals around the world leverage the anonymity afforded to them by the internet to do everything from advocating for democracy and speaking out against human rights abuses to participating in hate groups and organizing criminal activity. On the other hand, the internet never forgets, and social media acts as a permanent record, making it difficult for one to ever truly escape their past and build a new identity from scratch. The metaverse, with its promise to be a more embodied and immersive computing experience, will only escalate the internet’s contradictory effects on identity formation. 

In its most utopian form, the metaverse will allow an individual to alter their identity and appearance in unprecedented ways vis a vis their avatar. Should more business and commerce take place on the metaverse as widely predicted, the ability to shapeshift will have a real-world impact. Individuals who have been held back unfairly because of specific identity markers might soon be able to conduct business in the metaverse free from discrimination and prejudice, gaining real-world reputations and earning real-world wealth.  The optimist in me hopes that the metaverse will make the real world smaller, connecting individuals from different walks of life in more meaningful ways. The skeptic in me, however, worries that the major tech companies racing to build the first viable Metaverse will be more interested in turning a profit than promoting freedom of expression and upward mobility for the masses. 

While the metaverse could provide users with new ways to explore different aspects of their identity, it also has the potential to make changing identity online more difficult. If the vision Zuckerberg outlined in his keynote address comes to fruition, for instance, the Metaverse will be a controlled and mediated digital environment where free speech will be limited by the “community guidelines” that currently govern Facebook;  the corners of the web where users can hide or alter their identity to speak freely about any topic will be no more. To preserve the freedom we enjoy in the internet’s current iteration, it’s critical that we strike a balance between protecting users' privacy and preventing bad actors from turning the metaverse into mayhem.

While the freedom to shapeshift and assume anonymity in the metaverse could be liberating, it could also be dangerous. If anyone can be anybody at any given moment, how can you trust that the avatar you’re speaking to really is who they say they are? Without proper checks, the metaverse could become a hotbed for new fraud vectors. For the metaverse to truly succeed, there needs to be some connection between a real-life human being and their avatar. This will require digital authentication and robust privacy controls. 

Here are three ways companies can leverage digital identity to prepare for the metaverse: 

  • Embrace cryptographic authentication as the most reliable source of truth: The encryption keys found on SIM cards will continue to be the gold standard when it comes to preventing fraud. Soon, the smartphone will be just one part of an ever-growing constellation of smart devices, each of which is secured by an encryption key (including SIM Cards, FIDO keys, and EMV chips) that serves as a powerful bulwark against fraud. 
  • According to Prove’s 2022 Passwords & Authentication Consumer Trends Report, the most preferred way of authenticating identity in the metaverse was through phone signals (38%) vs. passwords (30%), SMS text codes (13%), and biometric authentication (9%).
  • Remember, immersive experiences demand seamless authentication: Let’s face it: the early iterations of the metaverse will be commercial in nature so it’s important for companies to engineer streamlined and seamless onboarding flows fit for immersive experiences made possible with VR and AR. Because many users may not even have a keyboard in the metaverse, it’s important for forms to be auto-filled using verified data so as to reduce friction and prevent customer abandonment. 
  • Reduce password churn and embrace reusable identity: They say it takes a lifetime to build a reputation and a minute to lose it. As an industry, we need to build a federated identity system that enables users (the vast majority of whom are trustworthy) to leverage their good standing to accelerate verification processes. Rather than make people prove who they are over and over again, reusable identities will enable you to prove your identity less frequently across many different platforms. 

In the next few years, you will likely receive an invitation to a virtual homecoming from your alma mater. When that day comes, your avatar will simply enter a digital representation of your school’s quad filled with your classmates. But how will you know if the avatar you’re speaking to is really a long-lost college pal or an imposter trying to scam you? In the age of bots, how will you even know if the avatar represents a person at all?  These are the pressing questions facing all of us as we ramp up for the metaverse. Answering them in a way that prevents fraud while protecting people’s freedom and privacy will be paramount.

To learn about Prove’s identity solutions and how to accelerate revenue while mitigating fraud, schedule a demo today.

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