By Ron Moritz, The Analyst Syndicate
As you consider metaverse- and Web 3.0-related investments and vendors, steer cautiously around those who can’t convince you that they have a solid strategy for exploiting broadly adopted, decentralized, identity management standards and technology.
People need to minimize exposing parts of their real-world identity while signing transactions in the virtual world. Personal keys, blockchains and decentralized applications are essential to making this work.
Background
Thanks to advancements in technology like virtual reality headsets and mobile devices, we are at the cusp of the “fourth generation” of cyberspace – the cyberspace of our dreams (and nightmares). Alongside this technology refresh, we have an opportunity to a return to authenticity.
As more people work, play, and hang out in virtual worlds, the digital identity management solutions of the past will no longer suffice. We’ll need new ways to ensure that identities are immutable and verifiable across the intersection of the virtual worlds of the metaverse and Web 3.0.
Explosive Complexity
Avatars, the digital representations of a person in these emerging virtual worlds, can be anything: animals, robots, fantastical creatures, even aliens. They can be of any age, gender, or species. They may have different powers or capabilities than avatars in other cyberspaces. And individuals may choose to create and operate large numbers of avatars for different purposes and experiences.
Complexity is mushrooming because rules and governance can and will vary widely from one metaverse to another. For example, an alcohol-themed metaverse might have a rule that says only avatars of people at least 21 years old can enter. Some of these rules and regulations may be enforced by agents of law enforcement agencies who keep order in their respective regions or zones within the metaverse. Other agents may enforce security policies designed to protect users from being attacked or harassed by other users (such as when wearing clothing with offensive words).
In this example, note how parts of a person’s real-world identity could be tied to their metaverse identity in some but not all places. For Web 3.0 to develop safely, we must find ways for participants to control elements of their real-world identity and choose what private data they will expose through their metaverse identities.
In the real world, a person’s identity is frequently tied to things such as home address, phone number, and email. These identifiers are used to verify you and give you access to different companies and services that, in turn, provide admission to various things (like transportation or electricity).
The metaverse? Not exactly the same, and in many cases, they are quite different in many cases.
Critical Insight: While central hubs that require an email address or phone number to receive an email or text verification code may carry over to the metaverse, many new services may not require a permanent account. Instead, they may grant access based on a decentralized identity system.
Decentralized Identity Management (DeIdM)
This system, where a person can authentically interact with different places, businesses, and people, is the key to Web 3.0. At present, it is not possible to grant access to other places in the metaverse because there is no way for an avatar representing a real person to be identified outside of its host server or service.
Critical Metaverse Success Factor:
For the metaverse to succeed, we will need the ability to sign transactions with our personal keys and use them in different blockchains or decentralized applications to expose the minimum real-world identity elements required to provide the services requested.
Virtual worlds that allow for many avatars per person could also benefit from these technologies.
Some characteristics, such as authenticity and access control, introduce new challenges. However, they’re still possible by using a public/private key pair system at every level of interaction between metaverses and characters within – from logging on through chat channels all the way down into character customization options like clothing color schemes and company uniforms.
Therefore, changing the identity management paradigm is a key requirement in building healthy metaverses and keeping out unwanted elements like hate speech, fake news, and chaos-causing trolls.
We need new tools that allow users to manage their digital identity across different environments, platforms, websites, and applications, and control what elements of private data they expose. It is also about building more trust between people.
The Internet was built on the idea that anyone could create anything online and then share it with others around the world. But the current model also makes it easier for bad actors, pundits, and influencers who share ideas and take actions without accountability.
The metaverse and Web 3.0 are complex ideas, and it will take a lot of work to design an identity management system that enables maximum freedom while also allowing companies to provide different services and spaces that people want to access.
To succeed, systems designed for the next generation of cyberspace must provide a better balance between identity and anonymity than those available today.
The good news is that standards for decentralized identity infrastructure and interoperability for electronic commerce, national identification, and other services are being formulated by organizations such as the Decentralized ID Foundation (DIF) and the World Wide Web Consortium (W3C). In addition, the potential of DeIdM is driving experimentation by several large companies:
- Microsoft is testing decentralized identification of verifiable credentials, such as academic transcripts and professional certifications, linked to the Azure Active Directory service.
- Verizon is working on a decentralized identity system to pass control of identity information to users. And,
- Mastercard is proposing a new infrastructure for digital identity.
It is essential that we get DeIdM right; both the metaverse and Web 3.0 will fail without it.
Are you investing in the firms and technologies on the right track with DeIdM? If you need help with this, contact me!
© 2022 – Ron Moritz – All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.