Privacy regulations in the metaverse:A paradoxical problem

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Privacy is a serious issue, and many wonders if the metaverse is genuinely in line with the goals of web3.

  • In 2018, news broke that one of the world’s largest ID databases, Aadhaar, was compromised, resulting in the loss of over 1.1 billion Indian citizens’ identities and biometric information.
  • The concept of Zero Knowledge Proof is a fast-growing adaptation of Bitcoin’s initial idea.
  • According to Vasu Jakkal, Corporate Vice President of Security, Compliance and Identity, providing privacy regulations is among the least of concerns.

Web3 applications have revolutionized the digital world as we know it, and its redefining concept has rapidly increased the digital transformation of Africa. Today more African governments urge and support entrepreneurs in the tech industry. The metaverse has brought science fiction to life and has opened the doors for more possibilities. It has provided us with environments that promote African culture through NFT artwork and galleries to foster innovation through blockchain tools. Unfortunately, experts and users have noticed one negative factor concerning this mind-boggling concept; privacy. The expansive and open nature of the metaverse has raised some security issues, but none have heavily undermined the adoption of its poor privacy regulations.

Unfortunately, as developers have tried to sort this problem out, it remains a mystery how to attain complete privacy in the metaverse. Because privacy is a serious issue, many wonders if the metaverse is genuinely in line with the goals of web3. Some go as far as stating that the metaverse is merely a web2 concept masquerading through blockchain technology.

Proper privacy regulation is the selling point of Web3.

The primary ideology behind web3 is to establish a decentralized system that caters directly to the users. Its primary goal is to one day usurp Web2 f the internet, and this is because both concepts are opposites. Web2 advocated a centralized system where a single entity governs the entire system. Any decisions or changes made to the network solely depend on the findings and the whim of whoever is running behind the scenes. In truth, Web2 has made revolutionary concepts such as cud computing virtualizations and even IoT.

Unfortunately, it has also had numerous shortcomings and is prone to constant cyber-attacks. Its efficiency is steadily reaching its maximum threshold, and the world desperately needs a newer and more improved concept. Thus Gavin Wood coined the term web3 after he showed the world that blockchain is a flexible technology we can implement in many other ways.

Also, Read The contradictory relationship between Blockchain technology and privacy.

As a result, a wave of new developers grew exponentially in less than a decade. Blockchain developers were in high demand, and soon Africa became a focal point where web3 applications could thrive easily. One of the major selling points of Web3 is its ability to empower the user directly. For years Web2 applications have deceived users into thinking we control our data and who gets to use it.

Shortcomings of Web2 with privacy

Unfortunately, this is far from the truth. One such example occurred in 2013 when Yahoo had a privacy breach resulting in over 3 billion exposed accounts. This situation was worse because this incident was made public three years after the violation in 2016. In 2018, news broke that one of the world’s largest ID databases, Aadhaar, was compromised, resulting in the loss of over 1.1 billion Indian citizens’ identities and biometric information. In June 2021, LinkedIn announced that hackers posted over 700 million user information on the dark web, impacting over 90% f its user database.

Unfortunately, it is common for web2 systems to experience such cases despite implementing so-called “full-proof” privacy regulations. In truth, some organizations go as far as selling user information. Unfortunately, many speculate that Google sells user data to advertising companies.

Gavin wood coined the term web3 and elaborated how a decentralized system is the next evolution for the Internet.[Photo/Polkadot]
Thus, Gavin Wood proposed creating a web3 system that would establish a genuine privacy regulation system simply by giving complete control to users. Web3 privacy is an all-encompassing concept touching everything from plane profile pictures to zero-knowledge privacy. Its first full proof of its genuine privacy regulation was through Bitcoin.

One of the many reasons Bitcoin became popular quickly is its ability to allow transactions between two parties without revealing any vital personal information. Indeed, Bitcoin is fully transparent, and any user can inspect any transaction on the network. Its systems’ decentralized and anonymized nature creates a strong sense of privacy.

Application of Zero-Knowledge Proof in Privacy

The concept of Zero Knowledge Proof is a fast-growing adaptation of Bitcoin’s initial concept. In layman’s Zero Knowledge, Proofs are a way of determining a transaction or action on the system is true without revealing any further information. Its first initial concept was the zCash system.

Also, Read Consensus Mechanisms in the blockchain world and their importance.

Here transactions are by default transparent, but the user can use Zero Knowledge Proofs to create private transactions. This notifies the system so that when the user wants to send a transaction, the web3 application makes a transaction message.

One of the contents of this message included the sender’s public address, the recipient’s public address, and the transaction amount. The network converts it into a zk-SNARK proof, the only thing sent to it. This privacy regulation ensures that no additional data is sent between the two parties.

In truth, some governments have termed the privacy regulations of such Web3 applications as too secure. Their inability to determine user identity has led to criminals turning to web3 applications to hide their identity.

Through this, many have questioned the implementation of privacy in the metaverse, terming it a contradictory concept. 

Privacy regulations in the metaverse are contradictory.

The basic understanding is that the metaverse is an ever-expanding virtual environment that implements some aspects of web3. Its open nature has led to numerous innovations. As a web3 application, they incorporated several other blockchain elements to support and facilitate various systems. In hindsight, most individuals associate the metaverse with NFT art.

The fundamental concept of digital ownership of NFT has established a form of ownership within the metaverse. Today, owning a virtual land and having proof to back up any claims is possible. The metaverse uses cryptocurrency to establish a working financial system in virtual environments.

This allows users to buy, sell and even earn from the metaverse. In addition, some metaverse applications incorporate smart contracts to automate various processes enabling developers to focus on improving or expanding the virtual environment. Due to this reason, many terms the metaverse as a web3 application.

The sheer scale of Virtual reality

Unfortunately, many fail to realize that accomplishing the mere design of a virtual environment requires an immeasurable amount of data. VR headsets combine the use of Virtual and Augmented reality with other intricate technology to create a virtual world. As a result of relying on various technologies, metaverse security issues are more complex than in other digital spaces.

The metaverse is made of various elements making its data collection bigger than most digital spaces.[Photo/Medium]

Also, Read The Future of Web 3, NFT and Blockchain Technology.

As a result, it provides multiple negative factors o the metaverse. According to Vasu Jakkal, Corporate Vice President of Security, Compliance and Identity, providing privacy regulations is among the least of concerns. He states that developers have an explosion of devices, infrastructure, apps and data with the metaverse. This increases the attack surface by an order of magnitude.

Companies such as Meta, Epic Games and Microsoft have poured billions of dollars into realizing the metaverse concept merely. It is crucial to remember that the metaverse’s multi-sensory experiences increase the scope of privacy regulations. Privacy in the metaverse also requires to encompass factors such as interaction with their users, transaction information and virtual property ownership. The range of privacy in the metaverse includes emotional, biometric and physiological data meaning the web3 application will monitor users at a limited forensic level.

Implementing proper privacy in the metaverse is cumbersome due to the daily data collected.

Privacy regulations will take time.

In a previous article, we mentioned that the metaverse tries to mimic the potential of a fully realized web3 system. Unfortunately, the slow-paced privacy regulations have made various individuals question its connection as a web3 application. In a survey that included consumers and markets, 50% of respondents were worried about user identity issues. 47% were concerned about forced surveillance users might go through without their consent, and 45% were considering the potential abuse of personal information.

A single privacy policy won’t do

As a negative factor of the metaverse, security and privacy regulation are critical elements to gaining customer trust. Caroline Wong, Chief Strategy Officer at cyber firm Cobalt, stated that if this web3 application seeks to realize its potential fully, it must focus on brand and trust. For instance, if users view that Platform A has properly implemented privacy in the metaverse, its rating will skyrocket. Likewise, this will mean that the same users believe that using platform B will lead to getting hacked or other privacy regulation violations. At this point, it is clear which of the two will prosper.

Dealing with this negative factor of the metaverse is no small feat. This web3 technology cannot be limited to one or a few data privacy regulations since it has a global reach. If it genuinely seeks to achieve web3 vision, it must cater to all cultures to all states and abide by their rules.

As a result, multiple privacy regulations will apply to the same data and person. For instance, the EU General Data Protection Regulations allow any business anywhere in the world to fall under its terms if it offers services in the European n Union. Any European users of a metaverse operated by a US or African company can exercise their right under this law if they feel violated.

To ensure proper implementation of privacy in the metaverse, regulators must draft legal frameworks with robust compliance policies. They must also consider the privacy restriction of any government using their services.


Unfortunately, no legal privacy regulation can cater to a global metaverse system, and it may take some time before this web3 application can adhere to its peers’ various web3 privacy achievements. Nonetheless, the negative factor of the metaverse has significantly reduced its adoption rate due to multiple concerns. Fortunately, the various metaverse security issues steadily decrease as developers find new ways to satisfy customer and security criteria.


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Ken Mutuku
Ken Mutuku
Your Guide to the Future of Tech, Web3, and Digital Storytelling. With a keen eye for detail and a knack for concise communication, Ken Mutuku is your go-to professional for decoding the next wave of technological evolution. Whether through captivating videos, insightful articles, or engaging presentations, he masterfully crafts messages that deeply resonate with his audience, setting him apart in the digital landscape.