Could Metaverse be Mainstream? What about Fraud Protection and the Environment?

Your metaverse Frequently Asked Questions answered – will metaverse be mainstream, what fraud protections exist and what about the environmental impact?

We keep hearing that the metaverse is coming but for some it is already well and truly here. But I want to address key questions I am frequently asked by those not into gaming or those without Sandbox/Decentraland accounts. Such questions are as follows;

1.??????What impact metaverse could have on my day-to-day life as a non-gamer?

2.??????If I am scammed or my data stolen on the metaverse who is going to help me/what protections are in place?

This are valid considerations. Another aspect people wish to consider is, in a world which is losing its polar glaciers, whether the metaverse helps or hinders the environment. This is a very nuanced area, but I will aim to address each question in turn.

Metaverse for the Average Person, Not into Gaming

Right now, the technological enhancements are being developed for mass use of metaverse but we’re certainly not there yet. This technology, such as VR headsets, is also not cheap. The current lack of mainstream, affordable metaverse technology is probably akin to the early cell phone days where only those with greater amounts of disposable income could afford this “luxury”. Now of course, those without a phone are considered strange. Could this be the same in the future for the metaverse tech? Possibly, is the answer I proffer, although some answer this question with a lot more conviction. On a day-to-day basis, the metaverse could be a viable option when it is not practical or economically/environmentally viable to attend a meeting or event in person. But why is the metaverse considered a more favourable option than video conferencing? The answer to this centres around the immersive nature of the metaverse and how it simulates in person interaction, far more effectively than video calls. Why is this relevant? For relationship building/sales the focus is enhanced by the removal of distractions such as emails/messages popping on screen when video conferencing. For group meetings it also allows more personal interactions to take place when you can speak with an avatar next to you in the metaverse. If I live to old age, I do like the idea of potentially meeting up with grandchildren in the metaverse, where my avatar can look like I do now, although that is largely selfish. There is also a whimsical element when the metaverse environments can be tailored. A conference can be held at the bottom of the ocean with many species of fish around you – although beautiful surroundings be another distraction by default! The technological enhancements can have a placebo effect on a business pitch and encourage more engagement than sitting in a call with camera off and on mute. So far, so science fiction like.

photo credit: Decentraland

Protections from Fraud in the Metaverse

But what about protections of personal data, guaranteeing the legitimacy of financial transactions in the metaverse and protection from those willing to scam you. The security of the metaverse is normally defended by those referencing the sophistication of blockchain which stores your transactions/data and is apparently impossible to hack. Others will state that digital tokens showing a verification of identity mitigate this risk. However, none of these considerations offer protection in circumstances when individuals have already sent digital payments under false pretences and criminals have, in their possession, the payment or data they seek. What then? Honestly, the decentralised nature of blockchain and metaverse (being away from government intervention) means protections don’t really exist currently. The UK regulator (Financial Conduct Authority) have on their agenda initiatives to introduce more financial crime regulation and compliance standards for crypto assets but it’s in its infancy. Fforbes has commented the “one of the biggest problems in the original art world is that it’s becoming the lead way to launder money, and the NFT world is following suit”.[1] ?In 2021, an NFT developer known as “Evil Ape” disappeared with $2.7 million and has yet to be traced. Evil Ape was part of an NFT project called “Evolved Apes” launched in 2021. A member of the community, Mr Cryptobull, stated that “what has happened is that Evil Ape has washed his hands of the project taking away the wallet with all the [Ethereum] from minting that was to be used for everything, from paying the artist, paying out cash giveaways, paying for marketing, paying for rarity tools, developing the game and everything else in between”.[2]

Until mainstream society can trust that there are effective protections in place for such illicit behaviour, this may be a barrier to full scale adoption. Mark Zuckerberg has commented on the future of metaverse stating that, “Privacy, safety, open standards, and interoperability will be central to the metaverse.”[3] We await the details of this safety and open standards with bated breath.

Environmental Impact of the Metaverse

The last question to address today is whether mass adoption of the metaverse benefits the environment or not. The answer largely sits with corporations building the metaverse worlds – such as Meta and Microsoft – and the types of energy used to build them, whether built from renewable sources or not. Both Meta and Microsoft have pledged to reduce energy usage and use renewable sources with Microsoft committing to be carbon negative by 2030.[4] Research released by UK-based digital consultancy ECS contends that training a single AI model could generate around 626,000 pounds of carbon dioxide, which is over five times the lifetime output of the average car. ECS partnered with the University of Massachusetts who performed this research.[5]

For a typical user, there is the argument that the energy needed to access an event in the metaverse is less carbon intensive than if a person travelled to a destination for an in-person event. However, the VR device or technology used to access the metaverse has an impact. Concerns have been raised by Dataquest[6] and Weforum[7] that virtual reality relies on cloud services and high-resolution imaging which, by nature, requires high energy usage. Until there are sufficient renewable sources of energy reserves on the planet, with high capabilities such as building metaverse environments, it doesn’t appear conclusive that the metaverse is carbon friendly.

The metaverse has positives and negatives. It offers opportunities to many, including those often disadvantaged by society. Award winning screenwriter Ann Hu has created an NFT to promote her film “Confetti” which chronicles the story of a mother and her dyslexic daughter, leaving China for New York in search of a suitable education that meets the daughter’s needs.[8] The NFT promotes solidarity for the dyslexic population and their wider communities.

Overall, it is a personal choice whether you choose to engage with the metaverse, either now or in the future. A lot of investment is being placed not only in the metaverse, but also into the technology needed to deliver it to the masses. For now, it’s important that users are clearly informed as to the risks of the metaverse so a full assessment can be made whether they wish to partake or stay away, at least until more protections are developed.

Caroline Scott is an investment compliance manager in the City of London and a freelance journalist.

[1] https://www.forbes.com/sites/forbestechcouncil/2022/04/22/nft-fraud-menace-of-the-metaverse/

[2] https://www.rosenblatt-law.co.uk/insight/cryptocurrency-2-7-million-allegedly-stolen-by-anonymous-nft-developer-rosenblatts-financial-crime-team/

[3] https://www.dqindia.com/the-metaverse-what-are-the-environmental-impacts-future/

[4] https://blogs.microsoft.com/blog/2021/10/27/supporting-our-customers-on-the-path-to-net-zero-the-microsoft-cloud-and-decarbonization/

[5] https://ecs.co.uk/resources/metaverse-or-metacurse/

[6] https://www.dqindia.com/the-metaverse-what-are-the-environmental-impacts-future/

[7] https://www.weforum.org/agenda/2022/02/how-metaverse-actually-impacts-the-environment/

[8] https://www.prnewswire.co.uk/news-releases/ann-hu-film-confetti--launches-nft-collection-and-international-campaign-to-spark-solidarity-for-dyslexic-population-301651523.html