The Metaverse is an iteration of the Internet that allows users to enjoy a far more immersive experience through an avatar in a virtual reality platform. Metaverse has started observing diversification in terms of businesses, where some are trying to monetize their content while others simply wish to develop a digital space for creations and socialization.
In this virtual reality space, with so many people trying to do so many things, there are bound to be some conflicts and disputes amongst the users. Before diving into resolutions for these issues, let us familiarize you with certain terms that you must be aware of when discussing the metaverse.
Key Definitions
Metaverse
Metaverse is a virtual space that uses existing technologies to create a customized universe, where people can enjoy a different experience using their virtual avatar (character). Different users from around the world can come together in a metaverse using their digital avatars. The metaverse allows transactions like buying and selling digital assets through blockchain technology between users.
Blockchain Technology
The blockchain technology is a relatively new concept in the market that incorporates new data structures that are secure, cryptography-based and distributed across a wide network. It is a decentralized structure that achieves consensus amongst network of nodes to allow transfers of digital goods, without the need for a centralized authorization of such transactions.
Smart Contracts
Smart contracts refer to programs stored on blockchains that run when certain predetermined conditions are fulfilled and are generally used for automating the execution of an agreement.
Issues related to Metaverse
Funds used in transactions on metaverse are usually in the form of cryptocurrencies and NFTs, which are basically digital assets. These digital assets can be in the form of images, pieces of music, meme tokens, some form of art, etc.
At times, there can be disputes related to trademark infringements in transactions in the metaverse. For example, if there is an image or creative that looks like a trademarked logo of a brand, it can lead to a dispute related to trademark infringement.
- In the metaverse, users can create unique digital assets and sell them to others or offer some services to other users.
- Such transactions rely on smart contracts that automatically transfer the ownership of assets from one person to another once the crypto payment has been completed.
- At the moment, these smart contracts can only be used for monetary exchanges and do not have any solutions for instances where inapt services are delivered in exchange for the money. The terms and conditions stated on the metaverse platform shall prove to be a valuable solution to deal with such issues.
- Metaverse allows users to create and perform through their virtual avatars, which basically means that they can create unique original content and sell it on the metaverse. However, there is a scope for copyright issues, both from inside and outside of the metaverse.
When it comes down to it, the scope for disputes on any platform heavily relies on the complexity of the transactions being carried out. As such, some sites have defined certain guidelines that must be adhered to when performing transactions on their platform, while others offer complete freedom in contracts between the users.
In addition, it must be noted that filing a lawsuit against users for disputes related to the metaverse shall not be really possible as the identities of these users cannot be confirmed. Besides, as the metaverse exists across the world, it would be difficult to ascertain the apt territorial jurisdiction under which the matter would be heard. Therefore, time, location and the identity of the defaulting user can be deemed as fluid aspects in such cases.
Resolution Mechanisms
Terms & Conditions
- When discussing resolutions for disputes related to metaverse, the terms and conditions of the platform shall play a vital role. The terms and conditions can offer a fair, transparent and non-biased dispute resolution structure.
- Conflicts between parties can be resolved via third party involvement of a decentralized judicial system.
- The resolution provided may be provided on the metaverse platform itself – which is a provision usually stated in the terms and conditions of the platform. This may involve a representative of the platform being the judge & resolving the dispute between parties.
- In addition, a condition may be added to the terms and conditions that makes the decision taken by the representative final and deem all parties involved in the case to be bound by the decision.
Decentralized Autonomous Organization
There is also a structure known as the Decentralized Autonomous Organization, commonly referred to as ‘DAO’, which allows dispute resolution through other users. This basically means other users of the platform shall vote for whoever they deem right, and the DAO system shall tally their votes to make a decision accordingly.
| The voting power of other users is calculated based upon the number of tokens held by them on the platform. |
Blockchain Arbitration
- Blockchain arbitration can also be considered a dispute resolution mechanism, where in case of a dispute, smart contracts automatically redirect the issue for resolution via the blockchain arbitration platform.
- It is an automated dispute resolution system that activates whenever there is a dispute on the platform and allows for giving judgements and enforcing them through the Blockchain technology. However, there are two major concerns with this method:
- The anonymity of the arbitrator, which is the exact opposite of the traditional method of arbitration, may create conflicts related to the arbitrator’s competency.
- Disputes can be between an identifiable user and a completely anonymous, untraceable user. In such cases, it would be relatively difficult to enforce the decision taken against such a person.
Conclusion
As there isn’t any legal structure in place to deal with metaverse disputes, the existing dispute resolution mechanism will have to be restructured to accommodate such disputes as the issues related to territorial jurisdiction, untraceable identity of the user at fault and other similar details are bound to be revealed.
However, until then, metaverse platforms must leverage all the technology and mechanisms available and also update their terms and conditions to ensure they have necessary provisions that provide an apt approach to deal with any issue that arises on the platform.
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