As hyped as it is, the metaverse remains largely undefined. It is a challenge to answer the question “What is the metaverse?” partly because its definition depends on who you ask. As it stands, the “metaverse” includes virtual reality and what we might have previously called “cyberspace” – including digital assets such as non-fungible tokens (NFTs), cryptocurrencies and more. Again.
In the rush to become the first to innovate in metaverse technology, companies depress risk management. But risk management is as critical in the metaverse as it is in our physical world – all risks are interrelated and must be managed in a connected way. If new entrants to the metaverse are expected to protect themselves against the overwhelming scale and cost of cyber risks, they must learn to identify those risks, continuously monitor threats, and make informed decisions for a strong future on the based on information from past threats and attacks. .
Here are three types of metaverse risks that expand attack surfaces for businesses.
Physical Material Risks
From headsets to chips with highly efficient computing power, virtual worlds need hardware to function. The physical hardware used to run the Metaverse can create a cyber risk in itself.
As people create, expand, and join metaverse worlds, the enormous and powerful potential of this virtual space creates new attack surfaces for bad actors to test and break through. The assemblage of material from multiple sources required to successfully enable entry into this digital reality invites heightened threats like the man-in-the-middle (MITM) attacks we have seen (in real life) at the counters. automatic and on mobile applications.
Related: The dark side of the metaverse and how to fight it
To ensure security, companies entering or experimenting with the metaverse will have more places to monitor 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 continuously managing their compliance.
Cryptocurrency Asset Risk
In the Metaverse, crypto transactions have been huge sources of risk. While cryptocurrencies started out as a controlled niche industry run by experts very concerned about security and privacy, the growth of the crypto space has brought more risk opportunities.
The growing number of consumer merchants, new businesses, and hackers all increase the risk factors in crypto transactions. Crypto has also become the de facto currency for ransomware; as a result, cyberattacks against crypto accounts are on the rise. The growing number of metaverse technologies will continue to put cryptographic security at risk until companies catch up and start devoting resources to addressing this type of risk.
Tracking fraudulent activity and implementing secure authentication can make a significant difference against cybersecurity threats, especially in the area of cryptography. Threats are happening faster than ever, so continuous risk monitoring is a necessity.
Organizations can’t do much because individual users – the holders of crypto wallets – represent a large 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 cryptographic threats in the metaverse.
By design, the Metaverse is based on anonymity and fluidity. A digital reality, unlike the offline world, allows users to mask their identities and reinvent their personas. Digital avatars assume characteristics chosen by their owner, and these identities are not carefully regulated – as on the Internet, aliases are changeable.
This exposes individuals, as well as companies that operate metaverse territories, to even greater potential risk. With innovation developing rapidly and security taking less of a priority, it’s hard for users and technologists across the metaverse to tell the “good guys” from the “bad guys.” The rise in calls for controls around identity risk in the metaverse stems from incidents related not only to unintentional sharing of data between human players and automated “impersonator” avatars (bots), but also to alleged episodes verbal abuse between players and even sexual harassment. .
Related: 34% of gamers want to use crypto in the Metaverse, despite the backlash
Implementing safeguards against these privacy breaches will only increase in difficulty if the ideal future of the metaverse – a vast, interconnected network of metaverse territories where identities and assets are fully portable – materializes.
At present, this technology is not yet available – and perhaps never will be. But there is no doubt that the Metaverse is becoming a real consumer and commercial technology – and a real risk factor. And like any space, it requires real 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 also served as CFO of MetricStream until 2010. He previously held leadership positions at OpenGrowth and ArcadiaOne, and spent several years in sales, marketing and operational roles at Citibank in Asia and the United States.
This article is for general informational purposes and is not intended to be and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.