Digital identities in the metaverse: Privacy, security, and user authentication in virtual financial systems

Abstract

The advent of the metaverse has ushered in a new era of digital interaction, commerce, and finance. As users increasingly immerse themselves in virtual spaces, the need for robust digital identities becomes paramount. This study investigates the intricate interplay of privacy, security, and user authentication within the context of digital identities in the metaverse, with a particular focus on virtual financial systems. Employing a cross-case analysis method within the qualitative research paradigm, the study extensively examines real-world instances to extract valuable insights, identify challenges, and propose potential solutions in navigating this dynamic landscape. This approach allows for a comprehensive examination of overarching patterns and trends across case studies, revealing persistent challenges in digital identity management. The study delves into the complexities of pseudonymity in virtual engagement, emphasizing the crucial balance required for user trust and accountability. Furthermore, it uncovers commonalities in successful implementations, spotlighting the transformative role of blockchain technology, exemplified by IBM Blockchain World Wire, and the growing trend of biometric authentication, as seen in the FIDO use case. The successful cases examined demonstrate that a user-friendly experience and scalability are integral to the adoption of advanced security technologies. Industry leaders should take note of the global trends in digital transactions, emphasizing efficiency, transparency and cross-border security. Additionally, the study offers forward-looking insights with implications for future research and practice, advocating for continued exploration of the nuanced dynamics between user privacy, trust-building mechanisms and accountability in the ever-evolving metaverse landscape.