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Web3 is crucial for data sovereignty in the metaverse

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Web3 is crucial for data sovereignty in the metaverse

Wandering around the metaverse is like being in a computer game, but soon, it will look exactly like real life. Unlike some dystopian visions of the metaverse, I don’t think we will give up on reality and stop participating in the physical world. On the other hand, advancements in artificial intelligence content generation will likely lead to a photo-realistic metaverse featuring exact replicas of ourselves and propel us toward a hyper-reality that combines our real-world and digital lives.

Everything we do today on the internet will happen in the metaverse, just with a more engaging visual interface. The virtual content we interact with today is low-resolution and cartoonish, which makes sense because making realistic content is expensive, and gaming makes up the majority of what is currently available in the metaverse. On the other hand, the physical world around us is vivid and rich with high-definition personalized content experiences that run 24/7 — also known as reality.

As technology advances, photo-realistic content in the metaverse will become indistinguishable from physical reality. The driving force behind this change will be powerful AI content generation algorithms that use real-world data to perfectly recreate versions of ourselves inside digital environments. The question is, as the real world extends into virtual space: How will you stop bad actors from controlling the photo-realistic virtual version of yourself?

Related: Web3, NFTs, metaverse: The tools for a truly decentralized future

Will our digital selves be slaves to big corporations?

The growth of the internet and an endless number of amazing digital products and services has created a torrent of personal data that has been collected by large corporations. Every search engine query, comment, like, profile picture, email and purchase is another note in the symphony of our digital identity that only certain corporations and their algorithms can hear. The metaverse takes data collection to a new level and will be filled with immersive content and increasingly rich data streams. While we may be willing to exchange our cookie data or information about what we buy for internet products and services that make our life easier, it is not clear that we will be comfortable giving corporations that same power over the unique biometric voice and face data required to create virtual versions of us in the hyper-real metaverse.

The way that many internet services collect data has made more and more people reluctant to share their personal data with online platforms, particularly among Generation Z. As we move to a hyper-real metaverse, the stakes are higher due to the incredibly intimate nature of the data required to render realistic versions of people, including digital copies of our faces, bodies and voices. This is a major hurdle for the development of an inclusive and user-friendly metaverse, especially when it comes to hyper-real content.

Related: A letter to Zuckerberg: The metaverse is not what you think it is

If we’re going to onboard billions of people into virtual worlds, content creators will need to use AI content generation algorithms trained on real-world data to create personalized, immersive experiences at scale. But individuals must be willing to share their intimate biometric and private data with content creators; otherwise, the metaverse may end up being nothing more than an endless Zoom call with a bunch of legless torsos floating around.

How to secure your hyper-real identity in the metaverse

The arrival of a “hyper-real” metaverse is both an exciting and troubling prospect. On one hand, the metaverse will create new immersive avenues for human expression and interaction. For instance, the move from analog phone calls to video conferencing began only 15 years ago, and it has rapidly transformed the quality of our interactions with family and friends around the world. Imagine how much more rewarding real-time, immersive and photo-realistic virtual “meet-ups” will be when you really feel like you are there in person with your friends and loved ones.

On the other hand, there is the potential for platform owners to harvest new and increasingly personal information and biometric data from users. Beyond this, bad actors may be able to create harmful content and use it to exploit individuals and communities. Recent examples of these risks include political misinformation and sexually explicit image abuse aimed at women. As we collectively explore how the metaverse will unfold, we all need to be diligent when it comes to user education, policymaking and the careful development of hyper-real technologies and AI. Ultimately, our biggest challenge as we approach a hyper-real metaverse powered by AI will come down to who controls user data and the safeguards we establish to protect individuals.

The first principle of securing your hyper-real identity in the metaverse is to positively assert ownership over your private biometric data. While it is up to governments to stop criminals from stealing your data and identity, at the very least, you can use blockchain technologies to stake a claim around your hyper-real identity and track its usage by legitimate content creators. Imagine securing your biometric data behind a nonfungible token (NFT) that represents your hyper-real identity that only you control. As you move between virtual worlds in the metaverse, you could use this NFT as an authenticated login service and control what platforms have access to your biometric data.

Consider virtual reality headsets, which are already capable of tracking users’ eyes, mapping their surroundings, and recording their voices. If participating in the metaverse is predicated on collecting these formats of biometric data, then we need to design systems to give individuals control over when and how their data is used. In this respect, Web3 tools, including blockchains and other permissionless technologies, are essential for ensuring data sovereignty in the metaverse because they are capable of tracking personalized content at scale without requiring users to blindly trust third parties with their biometric data.

Related: Digital sovereignty: Reclaiming your private data in Web3

Web3 will put individuals in control of their metaverse identity and biometric data

Attacking an individual’s personal identity in the real world is expensive in terms of time, resources and potential consequences. In the context of today’s internet, the barrier to identity theft at scale has been dramatically lowered, and millions of people are victimized by these attacks every year. Using Web3 tools, including NFTs and blockchains, to ensure individuals’ data sovereignty in the metaverse is critically important, as the deeply personal detail inherent in this data creates new opportunities for malicious actors to impersonate individuals and exploit our identities.

These risks are magnified in the metaverse. If an attacker can make your photo-realistic digital avatar say or do anything and other users are unable to tell if it is really you, it becomes far more challenging to combat fraud and build networks of trust that are essential for healthy communities. The hyper-real metaverse will unlock new opportunities to work and play in virtual spaces, but this can only happen if there is a deep shift in the way that data is exchanged and protected online.

While malicious actors will always be present in the metaverse, Web3 technologies can provide a set of guardrails for a positive economy where individuals can safely share their biometric data and safely appear as themselves in metaverse content experiences. It is essential that we create systems that empower individuals to control how they are represented in the metaverse and who has access to their biometric data. These systems will make personalized content creation a consensual and collaborative process between corporations that create content and the individuals that participate in it. This is a profound shift from the incentive structures at the heart of the modern internet and Web2, where the price of entry to major platforms and the best products is giving up control over your personal information. For the first time, NFTs, blockchains and Web3 tools will allow users to participate in digital economies without having to give up control over their data.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Tom Graham is a lawyer turned internet and society researcher. In the seven years prior to co-founding Metaphysic, Tom, a serial entrepreneur, built tech companies in San Francisco and London. He has always been obsessed with computational photography and computer vision and now works alongside the best developers in the space on the next evolution in how to build and perceive reality — one pixel at a time.

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Record Investment Outflows of $423 Million Led to Crypto Bloodbath

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Record Investment Outflows of $423 Million Led to Crypto Bloodbath

Last week saw record outflows of $423 million from crypto assets, according to CoinShares.

The report found that the outflows last weekend were likely responsible for bitcoin’s decline to $17,760. Analyst James Butterfill said: “The outflows were solely focussed on bitcoin, which saw net outflows for the week totaling US$453m.”

BTC outflows bring down institutional investments 

Therefore, if bitcoin is removed from the calculations, Ethereum contributed an inflow of around $11 million while other alts also added minor positive flows, aggregating inflows to the extent of $70 million. 

This was Ethereum’s first inflow after 11 consecutive negative sessions according to CoinShares.

In the past week, the BTC market has slid under the $20,000 level twice. Short-bitcoin saw inflows of $15 million due to the launch of the first U.S.-based short investment product in the week in question, the report noted.

[1/5] This week’s Digital Asset Fund Flows Report is now available! Written by @jbutterfill, the headline for this week is: Record US$423m outflows last week while Short-Bitcoin saw inflows of US$15m. Read on for the highlights -> pic.twitter.com/eIalnFhacv

— CoinShares 👩‍🚀 (@CoinSharesCo) June 27, 2022

Benefits of a crypto bear market

Similar wide margins were last seen in the previous negative peak, in terms of outflows, in Jan at $198 million.

However, in relative terms, Butterfill remarked that the week did not witness the largest negative flows against total assets under management (AuM). 

“This record occurred during the bear market in Feb 2018 where outflows representing 1.6% of AuM were witnessed, while the outflows last week were the third largest on record, representing 1.2% of AuM,” the report noted.

According to FTX CEO Sam Bankman-Fried, the Federal Reserve’s decision to aggressively increase interest rates was the main reason behind the market crash.

But despite the bearish sentiments, some crypto bosses are optimistic about the results of a market downturn. Charlie Silver, founder of Permission.io told Insider: ” There are hundreds of firms that are built on hype and not substance. It will be good for the industry to have them go away.”

“Bear markets are healthy because it resets valuations to reality and flushes out the bad actors. There are many cryptos that are true Ponzi schemes, that pay investors only with new investor money. When the new money dries up the project falls apart,” Silver added.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Uzbekistan warms up to Bitcoin mining, but there’s a catch

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Uzbekistan warms up to Bitcoin mining, but there’s a catch

The executive order spares all the mined assets from taxation and bans mining anonymous currencies.

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Uzbekistan warms up to Bitcoin mining, but there’s a catch

The National Agency of Prospective Projects (NAPP) in Uzbekistan announced its demands toward crypto mining operators. It would only allow the companies that use solar energy to mine Bitcoin (BTC) or other cryptocurrencies. 

The normative act on the government page, dated June 24, describes the confirmation of “Guidelines on the registration of the crypto assets mining,” and sets the finalization date on July 9. The second article of the document offers an uncompromising wording:

“Mining is being carried out only by the legal entity with the use of electric energy, provided by a solar photovoltaic power plant.”

As a further complication, the miners should own the solar photovoltaic power plant that they will use for energy.

The executive order also obliges any mining operator to obtain a certificate and register in the national registry of crypto mining companies. This procedure demands a brief list of documents, and should take no more than 20 days from submitting to the final decision to the licensing body. The certificates would be valid for one year after the registration.

Related: Go green or die? Bitcoin miners aim for carbon neutrality by mining near data centers

All the currency generated from mining activities would be spared taxation, though the mining farms would face the special tariffs on the consumed energy set by the Uzbekistan government. But, the trade operations with mined assets would have to be conducted only on the exchange platforms that are registered in Uzbekistan. The mining of anonymous cryptocurrencies would be prohibited.

In April 2022, the freshly-restructured NAPP became Uzbekistan’s exclusive crypto regulator with the mission to adopt a special crypto regulation regime in the country. This move came in a row of initiatives launched by the Uzbekistan President Shavkat Mirziyoyev to provide the regulatory framework for crypto. In September 2018, Mirziyoyev signed a law prohibiting local firms from launching their crypto exchanges in Uzbekistan. The law only offered legal status to crypto exchanges established by foreign legal entities.

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Celsius denies allegations on Alex Mashinsky trying to flee US

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Celsius denies allegations on Alex Mashinsky trying to flee US

Celsius CEO Alex Mashinsky wasn’t trying to leave the U.S. last week but has continued to work on recovering liquidity and operations, the company has claimed.

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Celsius denies allegations on Alex Mashinsky trying to flee US

Troubled crypto lending firm Celsius is putting their best foot forward to recover operations alongside CEO Alex Mashinsky, who currently stays in the United States, the company has claimed.

A spokesperson for Celsius has denied rumors that the company’s CEO tried to flee the U.S. last week amid the ongoing liquidity crisis of the Celsius Network.

The representative told Cointelegraph on Monday that the firm continues working on restoring liquidity, stating:

“All Celsius employees — including our CEO — are focused and hard at work in an effort to stabilize liquidity and operations. To that end, any reports that the Celsius CEO has attempted to leave the U.S. are false.”

Celsius’ statement came shortly after Mike Alfred, co-founder of the crypto analytics firm Digital Assets Data, took to Twitter on Sunday to claim that Mashinsky attempted to leave the country last week via Morristown Airport in New Jersey.

Citing an anonymous source, Alfred alleged that Celsius’s CEO was trying to go to Israel. “Unclear at this moment whether he was arrested or simply barred from leaving,” he added.

Alfred’s claims followed a massive GameStop-like “short squeeze” of Celsius, with Celsius’ native token Celsius (CEL) jumping 300% in one week by June 21. CEL price also abruptly rallied more than 600% on June 14, with analysts attributing the event to an exchange glitch or liquidation of short traders.

At the time of writing, CEL is trading at $0.741, down around 5% over the past 24 hours, according to CoinGecko. Celsius’ native token is still up more than 160% over the past 14 days.

Celsius Network token (CEL) 30-day price chart. Source: CoinGecko

Some industry observers in the crypto community have expressed skepticism about Alfred’s tweets about Mashinsky, with many considering his allegations as FUD.

If @Mashinsky attempted to leave the country this week, why are you reporting it now exactly when the CEL price is going down? Seems very coincidental Mike Alfud. And why no mainstream media or crypto media is reporting this? #CelShortSqueeze https://t.co/ynJbzWib9o

— Otis — #CelShortSqueeze ©️ ⚡️ (@otisa502) June 27, 2022

As previously reported by Cointelegraph, Celsius officially announced that it would be “pausing all withdrawals, swaps and transfers between accounts” on June 13. United States regulators subsequently started an investigation into Celsius as multiple accounts on the network were frozen.

Related: South Korean prosecutors ban Terraform Labs employees from exiting the country: Report

According to some analysts, Celsius’ liquidity issues should be attributed to shortcomings of the existing crypto lending model in general, as other lenders in the market have faced similar problems recently.

Celsius has been working hard to fix the consequences of the platform’s liquidity crisis, reportedly onboarding advisers and restructuring consultants to help the platform handle potential filing for bankruptcy. On June 18, Celsius’ lead investor BnkToTheFuture and its co-founder Simon Dixon offered to assist the network by deploying a recovery plan.

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