Crypto meets the metaverse: the implications for privacyJul 28, 2021
What is the Internet for?
The Internet is many different things to many different people. For some, it is a place to seek out information; for others, it is a place to visit with friends and family across vast distances. The Internet is a workplace; it is a source of entertainment and experiences. It is a source of connection -- and division.
The Internet is, at its core, a collection of virtual spaces -- spaces so vast, so full of people and ideas that they are more like virtual worlds. Around the world, life is increasingly spent in a combination of the physical world and the Internet's virtual environments.
Because of this, many believe that we are moving closer to realizing the "metaverse," a virtual universe parallel to, and integrated with, the physical world. As we approach this point, important questions are arising about how best to construct a virtual realm that is economically and experientially linked to the real world.
Proper application of emerging technologies will be key. And as the physical and digital increasingly meld into a single reality, decentralized tools like blockchains may prove to be essential for preserving, and even expanding, individual privacy everywhere.
A brief history of the metaverse
The term "metaverse" is a portmanteau of "meta," which means "beyond," and "universe." The concept is generally understood as a shared space in the virtual world that incorporates enhanced physical elements -- a sort of future Internet in which virtual 3D spaces continuously exist in connection with each other.
One definition describes the metaverse as "the sum of all virtual worlds." Imagine, for example, if the gaming universes of multiplayer online games (MMOGs) like World of Warcraft, Runescape, and Second Life were connected, complete with their own currencies and economies. This collective virtual space could permanently exist parallel to and independent of the actual physical world. In this space, people could continuously interact with one another in real-time. That's the metaverse.
The concept first appeared in William Gibson's 1982 short story entitled "Burning Chrome" under the term "cyberspace" and in his 1994 novel Neuromancer, which depicted the transportation of the human mind into virtual reality.
But it was Neal Stephenson's novel Snow Crash, published in 1992, which depicts the future as a bleak, high-tech dystopia, that defined many of the concepts we now associate with the term metaverse. In Stephenson's imagined world, large and powerful conglomerates control the world, and society is highly unequal. The metaverse is a place where citizens escape the harsh realities of life.
When Snow Crash was written, the Internet was in its infancy, and there were only a couple of MMOGs in existence. But in conjuring a three-dimensional virtual universe, Stephenson wasn't expressly trying to predict the future. In 2017, he told Vanity Fair that he was "just making [this] up."
Nonetheless, his vision of the Metaverse seems to have taken root in Silicon Valley. In the early 2010s, Snow Crash was allegedly required reading for Facebook's management team; Mark Zuckerberg himself alluded to it in a 2014 Facebook post. Google co-founder Sergey Brin has publicly referenced the book, and Amazon founder Jeff Bezos is reportedly a personal friend of Stephenson. Legend has it that the author inspired Bezos to found the aerospace company Blue Origin; Stephenson was the company's first member of staff.
Does the metaverse already exist?
When Snow Crash was first published -- and for many years after -- the technology to support a complete realization of Stephenson's metaverse did not exist. Indeed, the world is still years away from a full realization of the concept; there remain important technical limitations to what people can experience in virtual reality.
Increasingly, "real" and "virtual" experiences are converging. Social media companies have been a leading force in moving many activities from the physical world into the digital ether. People share ideas, like and react to each others' activities, and even host meetings and casual get-togethers -- entirely virtually. These interactions are enhanced by audio and video, heightening the "realness" and the dynamism of the experience.
The trend exists in the professional sphere too. The remote work revolution -- underway for years and now accelerated by the covid-19 pandemic -- has relocated many experiences that would have taken place in the "real world" into virtual reality. Distributed teams collaborate on virtual whiteboards in real-time; employees attend virtual conferences with peers and colleagues from all over the globe.
And, of course, the gaming industry -- currently valued at $160 billion, with 2.8 billion participants globally -- is in the vanguard of virtual reality. Video games draw people into vast, virtual worlds that are integrally tied into the real economy. VR headsets create increasingly intense semi-immersive and fully-immersive simulations. As this technology becomes more advanced, the worlds it creates become more and more real.
Can the virtual economy be linked to the "real world"?
As the technology to support human connection and experience in virtual spaces continues to evolve, it's likely that more and more of our lives will move into the virtual world. While this nascent metaverse may not yet fully resemble Stephenson's vision, some of its essential elements are reflected in the digital precincts that we frequent today.
For example, Stephenson's metaverse included a virtual economy that was independent of the "real" economy; the disconnect between the two was a rhetorical device to illustrate the dystopian nature of the book's physical world. This distinction between real-world and virtual-world economies is also present in today's reality. For example, someone who is unemployed in the physical world may be a highly successful entrepreneur in Second Life.
But the gap between virtual and physical economies is shrinking. Gamers pay real fiat currency to upgrade their avatars; businesses pay to "boost" social media posts. This is probably an inevitable characteristic of any real-world metaverse; the existing economy, already highly digitized, is bound to expand into our virtual spaces. The key challenge will be to integrate the metaverse into an economy that is efficient, transparent, and fair -- and that protects users' privacy. For that, we must look to new technologies.
What form will the growing metaverse take?
The rise of the metaverse can be seen as amoral: its ethical impacts are neither inherently good nor inherently bad. As is the case so often with new technology, the decisive factor is implementation. Early portents of our metaverse have shown troubling tendencies: tracking of users across sites and platforms, clandestine logging and sharing of sensitive information, and government surveillance have all found expression through the virtual world.
Moreover, today's proto-metaverse is literally owned by monopolistic corporations. Anyone who has ever been locked out of their Gmail account understands viscerally that our most important files, digital assets, memories, and thoughts are owned by the platforms that operate the services we used, and simply licensed out to users.
The current Internet is premised on a foundation of centralized infrastructure. It is a series of "walled gardens," where siloed platforms -- Facebook, Amazon, Google -- host information on centrally-owned servers, which they permit people to use as long as they adhere to the platforms' terms. This structure provides a level of convenience unthinkable only a couple of decades ago: packages ordered and delivered on the same day; gigabyte upon gigabyte of email storage. But the tradeoff is also crucial: in this virtual world, individuals must accept that they are renters, not owners. As soon as they cancel their subscription -- or misplace their sign-in credentials -- they lose access to the digital items they think of as "theirs".
Many privacy experts have pointed out that no one truly "owns" their identity in today's Internet. Instead, we entrust it to centralized services such as social media applications, online banks, and more. The many highly publicized instances of data breaches involving personal identity have shown that information stored digitally by centralized platforms is never truly safe.
The problem of platform dependence also threatens to exacerbate fragmentation and hamper interoperability in the metaverse. Facebook is a vast repository of communications, media, and memories built up over more than a decade for billions of people around the world. But all of that content is owned by Facebook and only accessible within its closed ecosystem; it cannot be accessed from Amazon's servers.
A metaverse whose infrastructure mirrored this platform-dependent design would pose dangers to individual autonomy and privacy. Large portions of the digital-physical world would be owned and operated by private companies -- to the detriment of individuals. If the Web2 model were to be replicated in the metaverse, the physical world would begin to experience the same pressures as the digital world when it comes to identity, usage rights, and interoperability. The totality of human experience could conceivably come into the control of a few powerful companies, and laws and customs emphasizing human rights like privacy could become little more than artifacts of a bygone era.
But it is not inevitable that the growing metaverse must cater to these practices. Blockchain technology offers another path.
Blockchain and the metaverse
Blockchain technology has grown exponentially over the past year. The number of people using it, and the number of projects building on networks like Ethereum, have continued to expand. And the technology is making a mark on our proto-metaverse in sometimes unexpected ways.
One such impact has come in the form of non-fungible tokens (NFTs) -- many of which are issued in association with works of art. Seeing the power of this development, Sotheby's -- one of the world's most prestigious auction houses -- launched an exhibition this year in a premier location: the "NFT metaverse."
The premise may be a portent of things to come: Sotheby's has created a digital replica of its London headquarters in the virtual streets of Decentraland -- the first decentralized virtual world. According to a report from June of 2021, "The virtual gallery will have five ground-floor spaces to show digital art, as well as a digital avatar of its London commissionaire Hans Lomulder to greet visitors at the door."
NFTs are also playing a role in the world of digital fashion, as people purchase items of clothing that can be used to dress up their avatars. For example, this spring Balenciaga presented its fall collection inside of a playable video game. Around the same time, a digital version of Gucci's Dionysus bag sold on Roblox for over $4,000 -- more expensive than the physical bag itself.
These early examples demonstrate the potential of decentralized technology to play a key role in shaping our emergent virtual economies. If we can work to embed the principles behind blockchain technology into the foundation of this young metaverse, we may be able to build better digital spaces than the ones that exist today.
What does this all mean for privacy?
What are the implications of the metaverse for individual privacy? It depends on what we collectively do now. A dystopian future in which Web2's constant surveillance, platform dependence, and perverse economic incentives are ported into the physical world is possible, but not inevitable. If innovators and individuals work to incorporate new technologies like blockchain into emerging systems, we can build a dynamic, connected world where people can access goods, services, and information in ways never before thought possible -- while also protecting and strengthening individual privacy, autonomy, and freedom.
The Orchid team is working hard to help make this positive vision a reality. Orchid's unique, decentralized VPN service allows people to explore the Internet in privacy for as little as $1. Providers stake OXT, Orchid's native digital asset, in order to offer service on the network, and are paid through an innovative system of probabilistic nanopayments. In addition to OXT, people can use other ERM-compatible tokens, such as xDAI, to use Orchid. And with in-app purchases, it's possible to get started in seconds using nothing more than an ordinary credit card. By making online privacy easy, affordable, and reliable, Orchid is working to make a truly private, free, and open Internet -- and maybe one day, metaverse -- a reality.
Download Orchid today to start exploring the Internet freely.
If you enjoyed this blog, subscribe here for privacy news, commentary, and product updates from Orchid.