Despite the publicity, the metaverse remains undefined. The question “What is the metaverse?” is a challenge to answer, in part because its definition depends on who you ask. Today, the “Metaverse” includes virtual reality and what we used to call “cyberspace,” including digital assets such as non-fungible tokens (NFTs), cryptocurrencies, and others..
In the rush to be early adopters of metaverse technology, companies are deprioritizing risk management. But risk management is just as critical in the metaverse as it is in our physical world: all risks are linked and must be managed in a connected way. If new entrants to the metaverse are to protect themselves against the overwhelming scale and cost of cyber risks, they must learn to identify these risks.continually monitor threats and make informed decisions for a strong future based on insights gained from past threats and attacks.
Here are three types of metaverse risks that expand attack surfaces for businesses.
Physical hardware risks
From headsets to highly efficient computing power chips, virtual worlds need hardware to function. The physical hardware used to run the metaverse may create a cyber risk of its own.
As people create, expand, and join metaverse worlds, the vast and powerful potential of this virtual space creates new attack surfaces for bad actors to test and exploit. The multi-sourced hardware assembly required to enable entry into this digital reality invites increased threats, such as the man-in-the-middle (MITM) attacks we’ve seen (in real life) on ATMs and in mobile applications.
To ensure security, companies entering or experimenting in the metaverse will have more places to watch as part of their risk management strategy. Companies will need to create more advanced and comprehensive security controls for physical hardware, as well as digital gateways, while continually managing compliance.
Risk in cryptocurrency assets
In the Metaverse, cryptocurrency trading has been a huge source of risk. Although cryptocurrencies started out as a niche industry controlled by experts highly concerned about security and privacy, the growth of the cryptocurrency space has brought with it more risk opportunities.
The growing number of consumer traders, startups and hackers increase the risk factors in cryptocurrency transactions. Crypto has also become the de facto currency for ransomware; as a result, cyberattacks against cryptocurrency accounts are on the rise. The growing number of metaverse technologies will continue to jeopardize the security of cryptocurrencies until companies catch up and start dedicating resources to address this type of risk..
Tracking fraudulent activity and implementing strong authentication can make a significant difference against cybersecurity threats, especially in the field of cryptocurrencies. Threats are occurring faster than ever, so continuous monitoring of risks is necessary.
Organizations can’t do much, as individual users — cryptocurrency wallet holders — are a big part of the risk. Scams, hacks, and password threats target vulnerabilities at the individual level. Individuals share an important responsibility in conducting due diligence against crypto-related threats in the Metaverse..
identity risk
By design, the Metaverse is based on anonymity and fluidity.. A digital reality, unlike the offline world, allows users to camouflage their identities and reinvent their characters. Digital avatars take on characteristics chosen by their owner, and these identities are not carefully regulated.: Just like on the Internet, aliases are changeable.
This exposes individuals, as well as companies operating in metaverse territories, to even greater potential risk. With the rapid spread of innovation and the low priority of security, it is difficult for users and technologists in the metaverse to distinguish the “good guys” from the “bad guys.” Increasing calls for controls around identity risk in the metaverse stem from incidents involving not only the inadvertent sharing of data between human players and automated “copycat” avatars (bots), but also alleged episodes of verbal abuse between players and including sexual harassment.
Implementing safeguards against these privacy violations will only increase in difficulty if the ideal future metaverse —a vast interconnected network of metaverse territories where identities and assets are fully portable— comes true.
At the moment, that technology is not available, and may never be. But there is no doubt that the metaverse is emerging as a real technology for businesses and consumers, and as a real risk factor. And like any space, it requires real and proactive risk management.
Gaurav Kapoor is Co-CEO and Co-Founder of MetricStream Solutions & Services, where he is responsible for strategy, marketing, solutions, and customer engagement. He was also CFO of MetricStream until 2010. He previously held executive positions at OpenGrowth and ArcadiaOne, and spent several years in business, marketing and operations roles at Citibank in Asia and in the United States.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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