Despite first being discussed more than 30 years ago, 2022 was the year the term "metaverse" truly exploded within the public consciousness. Leaders in the field believe the technology could be hosting a billion people by the second half of the century.
The metaverse will bring with it a lot of opportunities, especially for businesses working in sectors like blockchain, crypto and Web 3.0. Similarly, the technology will almost certainly create new revenue streams for those producing digital goods. However, alongside these positives, the metaverse would appear laden with many of the cybersecurity and online fraud concerns that plight the internet of today.
Fraudsters are always on the lookout for new opportunities to take people’s money. So, it probably hasn’t gone unnoticed in these circles that business leaders have talked up the metaverse as being a place where billions of dollars could flow freely daily. In fact, that statement was probably music to many of these fraudsters’ ears.
Simply put, the metaverse offers an abundance of potential new avenues for fraud. Early iterations of the technology, which are expected to be blockchain-based, are likely to be the most susceptible. Fraudsters have already found the blockchain to be incredibly useful when looking to launder money, steal identities and conduct scams. In fact, blockchain-based transaction crime hit a record-high in 2021 of $7.8 billion.
Why is the metaverse prone to fraud?
One of the reasons why fraudsters love blockchain and crypto so much is that despite transactions being clearly recorded, they’re often nearly impossible to reverse. These systems are also largely unregulated, which again has benefits, but can give room for scammers to operate with impunity. This concern also extends to the field of NFTs, which have a huge role to play in the metaverse but can easily be used to defraud people.
Similarly, many metaverse solutions are vulnerable, as they’re unable to stop people establishing more than one account. Having multiple accounts on a metaverse platform could allow fraudsters to take advantage of ‘free credit,' discounts or money back promotions designed for new users. Especially as different metaverse platforms fight for early market share, this form of fraud could quickly become highly problematic.
Likewise, metaverse platforms must watch out for influencer fraud, which has previously affected other major social media platforms. This type of fraud can result in people following fraudulent links or entering sensitive data to enter promotions they believe to be endorsed by well-known, established users. Again, as different metaverse platforms vie for early user adoption, it’s highly likely that celebrity endorsements will be used as a marketing tactic, which makes this form of fraud a significant issue.
Clearly, those operating in the metaverse must be conscious about the potential for significant fraud across their platforms. Particularly as these systems are first brought to market, the risk of unsuspecting users falling victim to fraud could be very high. That’s why companies must go to great efforts to ensure their platforms are properly fortified from the earliest launch dates, while supporting user experience.
Combatting fraud in the metaverse
Thankfully, there are certain things that platforms can do pre-launch to secure defenses and block out fraudsters before they get the opportunity to test out this new frontier. For one, companies can layer existing defense systems with things like two-factor authentication and machine learning to boot out inauthentic users, bots and high-risk online personalities.
Enabling browser and device fingerprinting can also make a huge difference in preventing fraud in the metaverse. In short, being able to identify someone’s device configuration can help to spot emulators, virtual machines and bots.
Likewise, digital footprint analysis also represents a major tool in this battle and can play a role to help verify the validity of accounts by assessing existing social media presence, web platform activity and instant messenger accounts.
Using the experiences of industries that have grown immensely in recent years, such as esports, online gaming and crypto, could help metaverse platform builders to avoid the worst effects of online fraud within their platforms. In doing so, the companies involved in this endeavor should be able to offer new users a technology that broadens horizons and delivers new opportunities for personal and economic fulfilment.