The Value Implications of Ethics in The Metaverse

The Metaverse is not yet a concrete reality, but there is no denying that the vision of it as a 3D immersive world will affect all aspects of our personal and professional lives, from socializing to working to entertaining to learning and much more.

Any activity you currently do in the physical space can be done virtually; and will enable activities that are currently constrained in the physical space (such as flying like a bird). Furthermore, not only will you be able to interact between different virtual spaces, these virtual spaces will also interact with and impact physical spaces as well. While that may sound impossible, almost everything we once imagined has become a reality.

The metaverse opens up a range of opportunities, as well a number of risks and a variety of ethical issues and concerns. Most of the ethical concerns are issues we have been experiencing in our non-digital life, such as privacy, social-economic inequalities, accessibility, identity control, freedom of creative expression, etc. They are not newly emerged troubles; they merely reflect society as it is.

Ethical problems have existed for centuries, and humanity only recently stared to address them. With this new technology, new concerns may emerge, like access to biometric or brainwave data, which unscrupulously might be used to control people's thoughts and behavior; or using multiple (and different) identities on multiple (and different) metaverse spaces.

Data is much more than text and images

Biometric Data

Biometric data is already available through virtual reality headsets; it refers to data that can track a user's environment, physical movements, and dimensions. Through headsets and eyeglasses that allow people to access the metaverse, companies can track eye movement; which virtual environments a person goes in; what body movements they make; how long they stay in an environment; and their physiological response to an experience, like their heart rate. 

There have been several incidents in the last years where applications have exposed personal and even medical information from millions of Americans, in one case even exposing patients' HIV positive status. 

This is no doubt a very private and sensitive data that should be in the control of the individual, and they should have the ability to decide whether to share this data and with whom. If companies have access to this data, they should make sure not only to secure it but also to use it adequately to assist the individual or improve their skill set, rather than manipulating the data or using it for their own gain.

Brainwaves from BCIs

Brain-computer interfaces (BCI) are soon to be a way to access the metaverse. BCIs can be worn on the head like headphones, on the wrist, or work through eyeglasses. BCI technology tracks brain wave patterns and deducts thought processes through machine learning algorithms. A direct link to someone's brain opens new types of data to be collected and analyzed. Having control of people's brains through their thoughts and behaviors could be devastating, if not life threatening, if used unscrupulously.

Brain-computer interface companies like Neurosity designed their headsets with security in mind: "brain waves are automatically translated into encrypted metadata by the N1 Chipset." Therefore, if the person uses Neurosity headsets in the metaverse, marketers will be able to tell how someone is accessing it whether it's via VR headsets, AR glasses, or BCIs, but personal thought patterns should be protected.

Deepfakes & Alternate Representations of Reality 

Companies will need to invest in cybersecurity to avoid data scandals and potential brand manipulation. Deepfakes, hacked avatars, and manipulated objects are some of the types of malicious behavior companies will have to stay on top of.

For example, MIT and Mozilla released a deepfake video that shows President Nixon announcing that Apollo 11 had not succeeded in its mission to the moon. This video of an alternate reality of sorts has gotten a lot of coverage and helped further the conversation about deepfakes and ethics. 

Protecting Digital Twins

In the metaverse, it's not just people that will be virtualized, but also physical objects. For example, buildings, objects in the home, items in a store will all be represented digitally via a virtual twin in the metaverse. This virtual representation raises some ethical concerns:

  • Who will decide which of these objects are acceptable to digitally recreate? Would that be regulated? Or open to freedom of creation?
  • Could anyone see any virtual twin in the metaverse? For example, if a house with all its personal objects is in the metaverse, could anyone walk into it or just the real-life owners? And if it’s only the real-life owners, how would that be supervised and monitored?

Protecting kids in the metaverse

What happens in the metaverse doesn't stay in the metaverse. We already know that what people experience in virtual reality impacts their memory, can desensitize them, or make them feel like they already did some action before, even if they never did it in reality. Marketing to kids should be handled with much more care than marketing to adults, and especially in the metaverse.

Theoretically, anyone can be anything in the metaverse, but it's still important to know key pieces of information, like a person's age. Even if someone looks like an adult in the metaverse, companies are responsible to identify whether they are dealing with an actual adult or a kid. The onus should be on the company and not on the user.

Identity and ethical concerns

Any person can use any avatar to construct their identity on the metaverse, as creative freedom knows no limits on the platform. Freedom of creative expression allows people to choose between avatars regardless of their background, but not all avatars are equally in demand. According to research, dark-skinned and female avatars are less in demand by users, raising concerns about racial and gender representation in the metaverse, which could also have to do with the lack of access for certain populations.

Race-based and gender-based discrimination is not a new problem. In an environment where individuals are free to choose what their avatar would look like, the decision can be based on unintentional inherent colorism and sexism, which endangers representation in the metaverse, particularly in combination with unequal access to these virtual spaces.

The main concern is that brands might be able to loophole their way out of following the diversity agenda that many are required to apply in real life, which might create two possible outcomes:

  • One possibility: Brands can abandon this agenda and only recruit a particular type of visual on the metaverse. This would harm balanced representation in the metaverse and contradict its own values.
  • The second possibility: Brands may be able to use the metaverse to conceal their true intentions of not adhering to true equality policies in real life. The metaverse can act as a façade to hide their lack of diversity, which could seriously harm society and all the progress that we have fought for.

Reputation hazard and value implications

If you wish to invest in the metaverse, you can do one of the following:

  • Invest in metaverse applications traded on a crypto exchange such as Decentraland with the token symbol MANA; or the Sandbox with the token symbol SAND
  • If you are not crypto-savvy and prefer to use traditional financial products, there are several metaverse funds issued and managed by different financial institutions. Examples are metaverse funds managed by HSBC, Fidelity, Axa Investment Management and Invesco. There are also exchange traded funds (ETFs), such as VERS or FMET.

When you compare and go through the process of investment decision making – looking at the components (i.e., the companies that constitute the fund or the ETF) – you should, among other things, take into consideration any reputational hazard that may arise from a company or a brand not adhering to the ethical concerns discussed above.

That may not be reflected in the current company’s value, but may have future implications, if the company (or brand) neglects to address them. Do your due diligence and look beyond the hype associated with metaverse.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Merav Ozair, PhD

Dr. Merav Ozair is a global leading expert on Web3 technologies, with a background of a data scientist and a quant strategist. She has in-depth knowledge and experience in global financial markets and their market microstructure.

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