How the metaverse will impact governance, privacy, fraud, identity, and more

As Metavers merges, big players are investing heavily in space. And while there are plenty of business opportunities in different metavarices for studios of all sizes, there are a large and growing number of them to keep in mind when creating their business plans. Companies need to keep a close eye on what this new market will demand, from how to safely monetize user experiences to the legal and tax requirements that will emerge, to the indicators of virtual economics.

At the 2nd Annual GamesBeat and Facebook Gaming Summit, Chris Hewish was joined by James Ghetto, president of video game commerce company Xsolla, partner at Shepard Mullin’s law firm and games, blockchain and fintech leader, and Emily Stonehouse, chief compliance officer. , Linden Lab Second Life to discuss these issues and more.

Self-government versus government regulation

Often, technology companies first innovate and then study ethics. But growth slows down when outside rules are imposed and innovation stops. As metavers loom, the question of self-regulation becomes more urgent.

The short answer is that no single measure really fits everyone, Ghetto said, especially since metavers will not only be a vast world, but will probably be made up of different spaces.

“The simple answer is that there are certain aspects of what happens in metavars that can come in the realm of self-government,” he said. “Like any other online platform, social media platform or otherwise, if you create valid and binding terms of service, you can set certain rules, community guidelines and other parameters as to what the platform will allow in those metavars. . There is the right amount of flexibility. However, it is not infinite. “

But to the extent that there will be space for metavars transactions, government regulation will apply whether it is a walled garden or not, for example to some extent on ecommerce and other internet based transactions. You cannot completely escape government regulation. Engages in commercial tax issues, requires money laundering laws for money laundering, etc. The Real-World Intellectual Property (IP) Act will apply by default, while some contracts to the contrary are missing. Decentralized governance by blockchain technology has a lot to offer itself, but you can’t completely decentralize, and you can’t avoid real world law.

Stonehouse also pointed out the issue of bad artists that could poison any online space. Our experience with the 2D social spheres only proves that social will always need some kind of moderation.

“Like in the real world, if you have X number people, there will be a certain number of people who are bad people, who want to troll people, want to hurt people,” she said. “You have to have a way to save people. You need to set some kind of rule. To say you need to have rules and terms of service and community standards, these things are acceptable in our world, and these things are not.”

Basically, it’s about making sure your community is functioning properly, and that community members are safe. Such rules may be built into smart contracts, so that they can be enforced automatically if they are violated, a new type of self-government, Hewlich suggested.

DAOs (decentralized autonomous organizations) may also be used as a way to enforce rules. DAO operates like corporations, in which token holders vote on DAO’s activity. If enough token holders feel that no one is working in a way that complies with the community guidelines, a community member may be able to vote from the island. And by drilling, each platform in Metawars may have its own supreme community rules, and then each region in the larger communities may have its own – for example, 18-year-old-age-and-more-area.

Facing fraud in metavars

In the real world, digital commerce already has a lot to do with money laundering, phishing, piracy and fraud – it is inevitable that Metavers will have its own various schemes.

Any game with the economy, the creators make and sell things, and the money is transmitted, will be subject to a wide range of rules, from money laundering to cyber security, privacy and consumer protection, Stonehouse said, but the establishment of these rules And implementation is ongoing. Money transmitter. Linden Labs created its own for Second Life, and it is expanding the money service business, Tillia to other sports.

The advantage of blockchain in this virtual world is that players can buy NFTs and trade them on the platform. And even if the game company closes, that property could be used in other contexts. Once the interoperability part of the equation is nailed down, it will create more value for NFTs.

Data privacy and identity issue

The amount of personal information collected about players in Metavers cannot be ignored. It is much more than what is collected in the flat-screen world. In the AR / VR version of Metavers, much more behavioral information can be collected, while things like eye movements can be tracked and logged.

“People need to be aware of one thing when they are in this metavarsis, what is this game taking from me? How are they making money? How are they using my data?” Stonehouse said. “If you’re in a game or in a metavars where those metavars rely on selling your data, be careful about that.”

Another interesting point is that people in Metavers will have multiple identities, whether it’s your real identity in a business context, your friends-and-family identity, your fictional personality that you don’t want to associate with your real life.

“Part of this is trying to figure out, in addition to all the traditional data privacy issues Emily mentioned, when someone has multiple identities, can you combine them together if they want to separate them?” Gutto said. “If you are using the same device for each item, if they are all device-dependent, you can track at least one user of the device, although it may be one user or more than one.”

Companies like Microsoft are now working on standards. The concept of decentralized identity has been raised, or self-sovereign identity, where people control their identity through blockchain technology and what they disclose to whom, at what level of detail. It will remove control from the platform and keep customers safe.

But all of these issues are just scratching the surface, Gutto said. The most important thing to consider is whether you are building a platform for Metavers, or using someone else’s platform and building a little capacity in those Metavers, you need to talk to a lawyer knowledgeable in these areas to understand the issues.

“Don’t wait until you are ready to launch to get a legal review, because there are a lot of legal issues,” he added. “You just have to be more discriminating with the help you render toward other people.”

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