If the Metaverse is to follow Web 2.0, how should it be governed?

Metaverse has become one of the most popular topics in all fields, especially in the post-pandemic era. It has been applied to education, healthcare, real estate, and tourism. At the same time, the metaverse can create high commercial value. Metaverse is a production from Web 3.0. However, the technology is still in the process of exploring Web 3.0. As a result, nowadays, most applications of the metaverse are based on the rules from Web 2.0. This situation will lead to issues such as inflation, data security and monopoly power. This essay will discuss how the metaverse influences finance, society and culture and how the metaverse should be governed if following Web 2.0. This essay will also include the application of metaverse and the difference between Web 2.0 and Web 3.0.

Metaverse is a post-reality world in Web 3.0 which is perpetual and persistent with multi-users, and it is also an environment that combines physical reality and digital virtuality. (Mystakidis, 2022, p. 486). Due to the characteristics of the metaverse, it applies to many fields, including finance, education, and gaming. In the metaverse, the users can do anything they want in their minds, even if it is illegal in the physical world. There are six metaverse characteristics: interoperability, decentralization, persistency, spatiality, community-driven, and self-sovereignty. (Rijmenam, 2022). These characteristics give users more opportunities to innovate new content and provide a unique environment for people to live everyday life in the post-pandemic. However, it is still developing, meaning the rules and laws aimed at the metaverse are not advanced. Although the users can do some issues, the laws or regulations are not applied in the metaverse; how to judge such moral problems and whether the rules of the physical world apply in the metaverse still need to be discussed. The world is in the early stage of Web 3.0. The concept of decentralization occupies a large part of Web 3.0. Users do not need permission from central authorities like the government when creating or posting anything online. They can work with a peer-to-peer model or on the blockchain. For decentralization, in the web 2.0 era, information was collected and stored in one fixed place. Still, in the web 3.0 era, information will be held in different locations to achieve a decentralized model. (Investopedia, 2022).

Cryptocurrency is a core terminology in the metaverse. Cryptocurrency is a blockchain digital currency with a function similar to fiat currency. At the same time, cryptocurrency is digital and decentralized. (Arkontaky et. al., 2022). Cryptocurrency using an anonymous trading system will lead to new frauds. For example, some people take advantage of the psychological characteristics of investors seeking high returns and induce them to invest in shitcoins to support the profits of the early adopters. This could be seen as a Ponzi scheme. Also, some criminals use cryptocurrencies to attract investors to help themselves in financial crimes such as money laundering. These activities make investors lose wealth and destroy an excellent economic order in the metaverse. Even though a promising cryptocurrency like Bitcoin can improve the development of the economy and help individuals and firms live easier, authorities and governments must make exact rules for a standardized trading process. DAO is a blockchain-based system that allows users to coordinate and govern themselves on public chains with self-executing regulations and whose government is decentralized. (Hassan & Filippi, 2021, p. 2). In Web 2.0 time, the information is controlled on a central platform so that trading behaviours can be supervised. As a result, individuals or companies can upload information and data to a government-designated platform for management before creating a DAO. If investors are caught up in a scam, they could report it, and the government can trace it back to the specific DAO for punishment. This type of regulation is for the upstream technology in the metaverse, which is the blockchain but not aiming at the metaverse itself. Thus, the critical value and orders would not be broken. In comparison, the government and authorities should pay attention to data security and user privacy issues. That is because almost all personal information is recorded on the blockchain. If information leakage arises, more users will get lost. 

The pornographic issue is another problem that should be noticed, especially for children. According to a BBC report, about a second of three children aged between nine to 12 in America join a game in the metaverse from Roblox. However, this is a sex game that allows children to talk about sex, or even their avatars can have virtual sex. A few scenes that cannot be found in the physical world are possible in this metaverse. (Clayton & Dyer, 2022). The online environment has a positive relationship with shaping teenagers’ behaviour. (Tebinkas et. al., 2021, as cited in Fernandze & Hui, 2022, p. 4). Companies and authorities need to regulate pornographic issues in the metaverse. Usually, children between nine to 12 are unable to judge the correctness of an action. It is also difficult for parents to supervise consistently in the metaverse because of the metaverse with features like community-driven and self-sovereignty. As a result, platforms can set up a system of rewards and sanctions for children’s behaviours and language norms. At the same time, the platforms should also establish a corresponding incentive policy to encourage positive behaviours. (Tebinkas et. al., 2021, as cited in Fernandze & Hui, 2022, p. 4). Punishment and reward mechanisms can promote a better online environment, thus helping children who play games in the metaverse to establish the right moral code and standards of behaviour. Authorities and governments can also try to apply ethical standards from the physical world to the metaverse to regulate users’ behaviours. Nevertheless, the core value between the metaverse and the physical world is the difference, so what is the standard and whether all the moral standards can be applied in the metaverse should be discussed more in the future.

Metaverse 6” by guy_david is licensed under CC BY 2.0.

Data security in the metaverse is also a question for users and governments. Users need to use Augmented Reality or Virtual Reality equipment to get into the metaverse. In this process, the equipment may collect users’ personal information, including biological characteristics, user actions or even brain wave patterns. This unique health information must have a user’s agreement before its disclosure. However, the metaverse is decentralization, so it raises the risk of hacker attraction as well as the difficulty of data protection. (Sivell & Fei, 2022). Privacy and data security are two required fields on the internet from the appearance of the internet. The University of Amsterdam suggested that ‘Privacy of the virtual identity can neither be adequately protected by real-world privacy rights, nor by privacy enhancing technologies in the virtual platform’. Therefore, it is a good idea for a platform to give the virtual avatar a virtual privacy right to protect their data security in the metaverse. (Tata Consultancy Service, n.d., p. 5). The establishment of virtual privacy can be a good way to improve the security of users, but some problems exist in practice. For example: how is this right used? Who should one report to if one’s privacy rights are violated in the metaverse? In web 2.0, is the user’s virtual right to privacy equally regulated by authorities or governments in the physical world?

Data Security” by Visual Content is licensed under CC BY 2.0.

In conclusion, if metaverse follows Web 2.0, most of its applications can be governed by authorities and government while at the same time, the companies should make efforts as well. Metaverse is still in a step of infancy, so a few moral issues and behaviour rules need more practice to form a better standard.


Reference list

Carlos Bermejo Fernandez, & Pan, H. (2022). Life, the Metaverse and Everything: An Overview of Privacy, Ethics, and Governance in Metaverse. arXiv.org.

Clayton, J & Dyer, J. (2022, May 15th). Roblox: The children’s game with a sex problem. BBC News.https://www.bbc.com/news/technology-60314572

Hassan, & De Filippi, P. (2021). Decentralized autonomous organization. Internet Policy Review, 10(2), 1–10. https://doi.org/10.14763/2021.2.1556

Investopedia. (2022, September 17th). Web 3.0 Explained, Plus The History of Web 1.0 and 2.0.https://www.investopedia.com/web-20-web-30-5208698

John Arkontaky, Tommaso Di Bartolo, Cathy Hackl, Dirk Lueth, & Yat Siu. (2022). A Primer on The Metaverse. Navigating the Metaverse. Wiley.

Mark van Rijmenam. (2022). The Future is Immersive. Step into the Metaverse. Wiley.

Marr, B. (2018, May 14th). 30+ Real Examples Of Blockchain Technology In Practice. Forbes. https://www.forbes.com/sites/bernardmarr/2018/05/14/30-real-examples-of-blockchain-technology-in-practice/?sh=370ab6fa740d

Mystakidis, S. (2022). Metaverse. Encyclopedia, 2(1), 486–497. https://doi.org/10.3390/encyclopedia2010031

Rennie, E. (2019). Blockchain and the Creative Industries (pp. 1–42). RMIT University. https://doi.org/10.25916/5dc8a108dc471

Sivell, L & Fei, B. (2022, August 18th). The metaverse: privacy and data protection challenges. Clayton UTZ. https://www.claytonutz.com/knowledge/2022/august/the-metaverse-privacy-and-data-protection-challenges

TATA Consultancy Service. (n.d.). User Privacy Protection in the Emerging World of Metaverse. https://www.tcs.com/content/dam/tcs/pdf/discover-tcs/Research-and-Innovation/user-privacy-protection-metaverse-experience.pdf