The Metaverse<\/a> has become one of the biggest buzzwords of the year as a number of brands, companies and even countries begin to explore virtual worlds<\/a> to conduct business. Even though Metaverse development is still underway, a recent report from the technology research and advisory firm Technavio found that the Metaverse will hit a market share value of $50.37 billion<\/a> by the year 2026.\u00a0<\/p>\n Another report\u00a0predicts<\/a> that the growth of the Metaverse will be driven by e-commerce, which is expected to reach a market share of $60.47 billion by the year 2026. E-commerce across social media platforms is also expected<\/a> to increase over the coming years, which may suggest that the Metaverse will advance as the next generation of social networking. Therefore, it shouldn\u2019t come as a surprise that a number of Millennials and Gen Zers are currently showing interest in the Metaverse. <\/p>\n Findings from the \u201cDigital Ownership Report 2022\u201d report from the Metaverse platform Virtua\u00a0show<\/a> that younger generations are particularly excited by the potential for reinventing themselves in virtual worlds that allow for the creation of digital identities and ownership. For instance, the report found that 63% of American millennials expect the Metaverse to help them reinvent themselves, while 70% of Americans surveyed agreed that digital items like clothing and artwork are already an essential part of their identity. <\/p>\n Jawad Ashraf, CEO and co-founder of Virtua, told Cointelegraph that the ability for individuals to reinvent themselves is a key feature of the Metaverse:<\/p>\n \u201cMany people today have reinvented themselves on social media, as they are projecting an image that is still personable and interactive. The Metaverse allows users to express themselves through an avatar, allowing each person to be themselves without the fear of face-to-face interaction.\u201d <\/p><\/blockquote>\n According to Ashraf, people will be able to express themselves much more freely in the Metaverse in comparison with Web2 social media platforms like TikTok and Instagram. He believes this is the case due to the fact that users will be able to customize avatars to portray themselves while leveraging digital assets that they own. He added that every aspect of Virtua\u2019s metaverse is customizable, allowing users to create their own avatars to reflect their \u201cdigital identities.\u201d<\/p>\n Janice Denegri-Knott, a professor of consumer culture and behavior at Bournemouth University and a researcher behind Virtua\u2019s digital ownership report, told Cointelegraph that there is not yet an official definition for digital identity within the context of the Metaverse. However, she believes that if digital identity is thought about pragmatically, it can be defined as \u201cthe unique, identifiable information that is connected to a person when online.\u201d As such, the concept of digital identity, in this case, extends much deeper than customizing an avatar to resemble oneself. Denegri-Knott elaborated: <\/p>\n \u201cThe Metaverse with its blockchain infrastructure affords users the potential to assume greater ownership rights over their own data, giving them more control over the information they share with others. The beauty of the Metaverse is that a user can have different digital identities, such as a workplace identity, sporting identity and personal identity, while all still being based on the user\u2019s real-world identity.\u201d<\/p><\/blockquote>\n Denegri-Knott added that she believes the idea of individuals extending themselves digitally is an instructive one. \u201cRather than thinking of digital identity as being separate from, but rather connected to an \u2018offline\/real\u2019 identity is helpful. This will allow us to see how our sense of self may be \u2018digitally\u2019 extended in our ability \u2018to do\u2019 and to \u2018express ourselves,\u2019\u201d she explained. <\/p>\n With this in mind, Denegri-Knott pointed out that the digital items that users own in the Metaverse will play a fundamental role in the development and expression of self, just as material items help people achieve intentions and goals in the physical world. This was highlighted in Virtua\u2019s report, which found that 70% of consumers feel their digital items help create the perception of who they want to be. Moreover, 75% of surveyors expressed that they were emotionally attached to the digital items they own in the Metaverse. <\/p>\n Related:\u00a0NFTs and intellectual property, explained<\/a><\/em><\/strong><\/p>\n Echoing this, Chris Chang, co-CEO of ZepetoX \u2014 an Asia-based metaverse initiative \u2014 told Cointelegraph that similar to how real-world objects encapsulate a person\u2019s physical space, digital assets in the Metaverse provide clues about a person\u2019s tendencies. \u201cThe Metaverse is a setting wherein one can explore relationships and identities different to the physical realities that one is born with,\u201d he said. <\/p>\n This aspect is particularly important, as Denegri-Knott further explained that avatars within the Metaverse can help individuals achieve goals that are perhaps inconceivable in the real world:<\/p>\n \u201cOne of the first cases I reported for Virtua was that of an avid Second Life member who lived in squalor, but who in Second Life led a successful life and lived in a palatial home. In our digital avatars, we can realize the blocked goals in our physical lives and achieve the status that is denied to us.\u201d <\/p><\/blockquote>\n Although digital identity is a key feature behind the appeal of the Metaverse, a number of security issues are still associated with this concept. Andreas Abraham, project manager of Validated ID \u2014 a project collaborating with the European Commission on their blockchain identity initiative \u2014 told Cointelegraph that reinventing who you are means reconsidering values, activities and possibly changing behavior. Given this, he believes that the Metaverse will allow every person to define from scratch who they are and who they wish to be. <\/p>\n Yet, this could lead to multiple issues including trusting if an avatar is who they claim to be. Fortunately, there are solutions to combat these challenges. Fraser Edwards, CEO of Cheqd, told Cointelegraph that self-sovereign identity, or SSI, may come to the rescue. According to Edwards, SSI is often known interchangeably as \u201cdecentralized identity,\u201d which allows individuals to have ownership and control over their data. <\/p>\n In the case of avatars within the Metaverse, Edwards noted that these are moving data points capable of forming decentralized reputations. \u201cAvatars in the Metaverse will collect online social proofs, meaning the interactions between them can act as proof for determining which ones represent good individuals (or not) while staying anonymous,\u201d he said. In other words, this allows for anonymity while creating an element of trust: \u201cEven if an anonymous developer exists solely in a Metaverse they could build social proofs through interactions and hence reputation with SSI.\u201d<\/p>\n Related:\u00a0Blockchain and NFTs are changing the publishing industry<\/a><\/em><\/strong><\/p>\n Moreover, Edwards pointed out that while some Metaverses allow users to customize their avatars based on fictional 3D characters, some are leveraging \u201cphoto-realistic\u201d avatars. For example, Union Avatars, a Barcelona-based virtual identity Metaverse platform, is applying real-life images to represent a user\u2019s avatar in the Metaverse. <\/p>\n Cai Felip, CEO of Union Avatars, told Cointelegraph that a photo-realistic avatar is a 3D virtual representation of a user\u2019s real-world self based on their actual image: \u201cBy leveraging computer vision technology, we have created a solution that can generate a full-body avatar from a single selfie taken with your webcam or uploaded to our webapp.\u201d Tina Davis, chief creative officer of Union Avatars, added that photo-realistic representational avatars are used in industries where it is crucial to present oneself as they are in real life. \u201cThese fields are typically those of medicine, business, education and travel,\u201d she remarked. However, Davis noted that the gaming industry is starting to witness broader use cases as more people adopt their virtual identities.<\/p>\n While innovative, protecting user data also becomes an issue in the Metaverse. Dawn Song, founder of Oasis Labs and a professor at the University of California at Berkeley, told Cointelegraph that seemingly anonymous metaverse platforms may still be able to collect user data. \u201cAs an example, in our research, we have shown the new privacy risks of the Metaverse. We need new technical solutions to better protect users’ privacy,\u201d she said. In order to combat this, Song explained that she helped develop a decentralized anonymous credential system with an on-chain verification to enable users to prove the properties of their identity while maintaining privacy. <\/p>\n \u201cThis system can provide practical on-chain verification for the first time, achieving both privacy and accountability. It has the ability to allow users to show know your customer certificates while remaining private by using zk-SNARKs and smart contract capabilities to verify anonymous credentials,” she explained. Song added that her U.C. Berkeley research group created a new solution called \u201cmetaguard\u201d to provide an incognito mode for users in the Metaverse.<\/p>\n Despite challenges, digital identity in the Metaverse will continue to progress in meaningful ways. For example, Sebastien Borget,<\/a> co-founder and chief operating officer of The Sandbox, told Cointelegraph that digital identity in the Metaverse will expand to allow for interoperability within other virtual ecosystems: \u201cUsers 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.\u201d<\/p>\n According to Borget, digital identity will continue to build as users spend more time within the Metaverse, whether that be within gaming environments, through virtual events or in online workplaces. \u201cUsers 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),\u201d he remarked. Borget added that a user\u2019s digital footprint will soon become important within other sectors, like decentralized finance (DeFi): <\/p>\n \u201cEven in DeFi, a crypto exchange can loan you more to buy a land if you prove you actually spend time building and playing in the metaverse. And you don\u2019t want that data to be held in just one virtual world \u2014 in the true spirit of Web3, users shouldn\u2019t have to be locked in one walled garden platform to carry out their history and reputation.\u201d <\/p><\/blockquote>\n Moreover, while it\u2019s too early to tell, the importance placed on a user\u2019s digital identity may help decrease the amount of illicit activities<\/a> expected to take place in the Metaverse. For instance, Song noted that having a decentralized identity attached to other aspects of life like bank accounts could add far more functionality to the Metaverse: \u201cStill, we need to ensure better privacy and data sovereignty for individuals if they are to use the Metaverse truly.\u201d<\/p>\n<\/div>\nDigital identity is key to the Metaverse<\/h2>\n
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Trust and privacy challenges of digital identity <\/h2>\n
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How digital identity will advance<\/h2>\n