Metaverse will move the goal posts for ID verification

The third version of the internet, Web3, is turning the paradigm of identity verification on its head. Today, we operate in a world of centralized services. For most online transactions, we go through an intermediary that, among other things, authenticates our legitimacy, citizenship, financial health and other relevant characteristics.

Web3 changes all that. Dominated by open-source technology, Web3 will leverage distributed, or blockchain, architecture to make the internet trustless and permissionless. In the metaverse, virtual reality platforms built on Web3’s principles of decentralization will give citizens direct access to whatever they want without an intermediary.

What does this have to do with public services? In the metaverse, total control over how identity is expressed, seen and verified belongs to the constituent. Users will decide which entities get to “see” them, how much of them they get to see, for what purposes and for how long. When this happens, all legacy intermediaries—including government agencies—will be forced to adapt new processes.

3 developing trends to explore today

To prepare for this decentralized future, agencies should begin studying and exploring the following possibilities:

  • Evolving authentication methods. Web1 relied mainly on passwords for access to online experiences; Web2 added new methods, such as two-factor authentication and OAuth (eg, “Sign in with Google”). Web3 techniques are likely to rely on blockchain technology to admit people—or more realistically, their avatars—into virtual experiences. These experiences could be anything from applying for a student loan to participating in a local town hall. Self-sovereign identity use, storage and sharing are fast-evolving concepts to investigate.
  • Crypto transactions. Some agencies, particularly those that operate in the lending space, already know many of the on-ramps to cryptocurrency transactions thanks to long-standing regulations designed to prevent improper payment. That said, currency is but one example of what are sure to be many crypto-based assets in the future, including tokenized voting ballots. Already, we’re seeing local governments test blockchain technology for mobile voting.
  • Virtual experiences. In the metaverse, users are no longer at a screen; they’re in it. It’s complex enough to verify identities in a Web2 world. Fraudsters, scammers and even well-intentioned innovators that lack adequate data security and privacy controls pose new threats to personally identifiable information. Layer on Web3’s self-sovereign identities, and the need for next-level education and hyper-personalized protection becomes clear.

Web3 is not that far away

If Web3 seems too far in the distance for the allocation of resources today, consider how quickly things are moving. Many of the virtual concepts and systems that will stand up the metaverse were democratized during work and school lockdowns of the pandemic. Students, citizens and workers participated in that online ecosystem more fully than anyone could have anticipated. Sometimes they did so safely; sometimes not. Identity data is extremely vulnerable in the untamed lands of hybrid interaction.

It’s also worth taking some time to investigate some of today’s fledgling Web3 providers. They may be remembered as flashes in the virtual pan, but others may become tomorrow’s Google or Amazon.

Studying and exploring those providers and their technologies will look different for each agency. However, the goal should be to get as much tactile experience as possible. Sign up for a digital wallet and transact with cryptocurrency. Try on a virtual reality headset and play around with avatars. Pull in legacy identity experts and self-taught metaverse developers to brainstorm early use cases and technologies an agency might integrate now.

When possible, constituents should be included in research. By exploring Web3 and engaging constituents in that journey, trust in a collective readiness for the next iteration of the internet will undoubtedly grow. In a world where possibilities are endless, every dream can be realized and every fiction resembles reality, trust will become every agency’s most critical asset.

Al Pascual is SVP, Enterprise Risk Solutions for Sontiq, a TransUnion company.


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