The ethos of Web3 — the technology behind the next-gen 3D internet — exists at odds with the world’s current legal and regulatory structures.
Advocates see a chance to create a new (virtual and virtuous) world, in stark contrast to the state apparatus that has warped and accentuated the divisions of wealth.
Instead, using organizational structures like DAOs, self-governance giving stakeholders and equal voice, will be baked in. Money (crypto) will be tracked on the blockchain ensuring every player always receives just reward and financial misconduct is eliminated from the board.
That said, there are those who are concerned by the lack of oversight.
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People like fintech expert Martin Boyd call for the largest players in the metaverse (e.g., Epic, Meta and Microsoft) to take proactive steps to create their own “metacode of conduct” to protect users from abuse, fraud and loss.
“Crucially, I’d also highlight the significant risks to our mental health,” he writes at Forbes. “If the metaverse looks and feels like the real world but that is unencumbered by criminal law, and with experiences that are more extreme, there are major risks around trauma and negative mental health impacts.”
Watch This: How to Stop the Metaverse from Becoming the Internet’s Bad Sequel With Micaela Mantegna
TED Fellow and video game lawyer Micaela Mantegna lays out why the metaverse is at risk of inheriting some of the internet’s worst traits.
The metaverse may be a wild frontier, but here at NAB Amplify we’ve got you covered! Hand-selected from our archives, here are some of the essential insights you’ll need to expand your knowledge base and confidently explore the new horizons ahead:
- What Is the Metaverse and Why Should You Care?
- Avatar to Web3: An A-Z Compendium of the Metaverse
- The Metaverse is Coming To Get You. Is That a Bad Thing?
- Don’t Expect the Metaverse to Happen Overnight
- A Framework for the Metaverse from Hardware to Hollywood and Everything in Between
It’s easy to depict the internet’s new frontier as a wild west of unbounded freedom and lawlessness and there’s something romantic about that characterization. But there are real-world consequences, which risks the whole project spiraling out of control.
There are already reports of “toxic” behavior by users on other users in online 3D worlds. The perpetrators are shielded in anonymity by avatars and the victims feel they have no protection from the builder of the world. The corporate governance and statutory laws that regulate our interactions on social media, weak as they are, are fast falling behind the sophistication and complexity of the metaverse and Web3.
Arguably, some of the technologies that underpin the metaverse inherently reduce transaction risks and the need for financial regulation. Transactions through blockchain or distributed ledger technologies cannot be falsified.
Boyd, who is president of $6.4 billion banking business segment of FIS, disagrees. There may be accounts or wallets to store your crypto assets in, but there is no government-backed protection from loss or fraud.
“The whole ethos of the metaverse appears to be at odds with this kind of traceability,” he says. “If you can be anyone you want to be in a virtual world, you might not have to prove your identity, which is not necessarily compatible with regulation.”
Nor is he convinced that regulation is inevitable or feasible for every metaverse. There are already more than 160 companies operating in the metaverse, with many more likely to follow.
“In theory, any of these individual operators could exist indefinitely outside of a regulatory framework. Unless regulation of the metaverse is global in its reach, there may be little to stop an offshore-based investment vehicle running its own corner of the metaverse and people accessing it from other virtual worlds.”
Rather than idly kicking a tire, Boyd has come with a framework for self-regulation which he hopes will improve transparency, credibility and accountability, supported by best-practice processes.
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1. Set standards. The most reputable players in the metaverse could join forces to form an independent industry body and draw up their own robust codes of conduct.
This code would have four must-haves: Know Your Customer requirements that make metaverse users verify their real-world identity, including a robust process for registering minors to minimize abusive actors; safe spaces for mental wellbeing and AI tools to monitor addiction and PTSD; the ability to opt into — and frequently confirm you’re comfortable with — levels of content; and maintaining a cross industry database of bad actors and their real-world identities.
2. Drive financial best practices. There should be well-defined processes to manage the financial risks of the metaverse. To make any financial regulation viable in the metaverse, there need to be strong links between virtual and real-life personas, and adherence to many of the same principles that make the real financial world safe. For example, it would make sense to outsource ID verification processes to a reputable third party and provide insurance against personal loss or even third-party injury.
3. Give consumers a clear choice. The industry body could come up with a ‘quality stamp’ that shows the virtual worlds that are self-regulating, adhere to the prescribed standards and are therefore safe places to visit. Then it would be up to metaverse users to decide whether to stick to approved areas or take their chances in clearly unregulated environments.
Essentially, the more real the metaverse becomes, the more need it will have for regulation — but what’s the incentive for metaverse developers to apply these checks and balances?
The obvious one is trust. You can’t populate the metaverse on a massive scale or make any kind of serious money from it unless you bring people — and advertisers — with you. Boyd points out that in purely commercial terms, this would attract advertisers and investors by providing a transparent risk framework with strong Environmental, Social, and (Corporate) Governance alignment and less reputational risk.
It would seem that his instincts are shared. He quotes research that 41% of metaverse users worldwide are concerned about privacy issues and 55% of US internet users worry about the tracking and misuse of personal data in the metaverse.
How Would/Could Social Media Work in the Metaverse?
The future of social media is intrinsically linked with the future of the metaverse but what does that look like exactly?
A clue can be found at Xone, a self-described “Web3 social media platform that replaces profiles with personal 3D worlds.” On Xone users use augmented reality tools to create build, share, and monetize these worlds.
There are Personal Xones that fill the function of the profile pages we are used to seeing in traditional social media, and Community Xones for hosting events, gatherings, launches, or any other type of immersive social group activities.
In a Forbes article, Xone CEO and co-founder James Shannon described his vision of Web3 social media with futurist and author Bernard Marr.
“When you first open the Xone app, the first thing you think is that this looks a lot like the apps I’m familiar with,” Shannon says. “You have a home feed and the ability to Like, Comment… the core difference we introduce is that rather than clicking someone’s profile and seeing a two-dimensional grid of pictures, clicking their profile enters you into an immersive three-dimensional world that you can explore in AR… the content you can explore and visit and share is not 2D content but 3D, immersive worlds you’re sharing through the network.”
Technology and societal trends are changing the internet. Concerns over data privacy, misinformation and content moderation are happening in tandem with excitement about Web3 and blockchain possibilities. Learn more about the tech and trends driving humanity’s digital future with these hand-curated articles from the NAB Amplify archives:
- The TikTok-ing of Western Civilization
- Web3 and the Battle for the Soul of the Internet
- Our Collective (and Codependent) Relationship with Data
- Want to Fix Social Media? Stop Listening to the Bots and Algos
- Social Media Is a Disaster for Democracy, But Who’s Going to Change It?
A fundamental takeaway that Marr reflects on is that social media doesn’t die in the metaverse, it’s just that everything on the web and not just dedicated sites “will become social, connected, and without borders.”
Marr says, “Social media platforms in the era of the metaverse may be more geared towards providing immersive, interactive experiences that stimulate as many of our senses as possible — rather than just connecting us to our friends over 2D web pages.”
He adds, “The metaverse simply allows us to step inside and experience it all together, immersively, rather than being limited to scrolling through it on a flat screen.”
This means that when we connect for a catch-up, we will meet up in any environment that can be imagined experienced in a Virtual reality that will soon include realistic and ubiquitous virtual sensations too like haptic feedback and smell.
“So while texting or a video chat might seem like a nice way to keep in touch with a loved one while we are separated today, in the near future, we may be able to walk hand-in-hand with them across a beautiful meadow, breathing in the scent of flowers as you go.”
“Social media platforms in the era of the metaverse may be more geared towards providing immersive, interactive experiences that stimulate as many of our senses as possible — rather than just connecting us to our friends over 2D web pages.”— Bernard Marr
As you can tell, or perhaps it is because he is in conversation with Shannon, Marr is on the optimistic side of the metaverse’s social evolution.
He is not blind though to the negative side of current social media behavior which risks being amplified by greater immersivity in future.
“Traditional social media has been accused of enabling harmful behavior such as cyber-bullying, harassment, and the spreading of conspiracy theories and fake news,” he says. “The potential for harm that may be caused by social media that’s more immersive, engaging, and quite possibly more addictive than anything we have seen before.”
Meta, for example, was prompted to add a “safe zone” feature that allows users to instantly create a barrier around themselves when early adopters complained of “virtual groping” and other unpleasant behavior.
“A new, more immersive social media — one that’s harder to walk away from simply because it’s so much more engrossing and entertaining — clearly has the potential to magnify these threats.”