Future of WorkInnovation

The Rise of Metaverse: Challenges for the Indian Laws

Web 3.0 is the latest piece of innovation that promises to change the way internet is perceived. Much like what the internet did to exert influence and bring about real-world changes beyond the boundaries of the virtual world, metaverse promises to incorporate the blockchain technology which has already revolutionised global finance with cryptocurrency. If the same setup is used with social media platforms, it would completely dismantle the centralised data structure model which has been in existence so far. Not much has yet been propounded by the creators of the envisioned Web 3.0, but certain fundamental ideas have already been floated.

This blog article is the first piece out of the three that attempts to demonstrate how the Indian laws are inconsistent with the already existing global standards in terms of technology and electronic evidence. The subject of databases and how blockchain technology can be the stepping-stone for metaverse have been investigated in detail.

Attempts have been made to analyse the Indian Evidence Act in the light of submission of electronic evidence and how capable is the current technology law regime to adapt to the postulated metaverse. To do so, a timeline comprising of judgments that interpret certification of electronic evidence has been constructed. The drawbacks of Information Technology Rules, 2021 have been assuaged to discuss how the current focus of Indian laws are widely different from what it needs to be to adapt to the latest innovations.

Introduction to Metaverse

The metaverse is an evolving lexicon to describe the next iteration of the internet. It is the future state [if not the ‘quasi-successor’] to the Internet, as it does not aim to replace the internet but build upon, transform, and revolutionise it. It is essentially a virtual-reality arena wherein users interact with a computer-generated environment, with an increased permeability with the physical world. Metaverse is perceived in popular culture as an enhanced and upgraded version of the Internet, juxtaposing the ordinary physical world with the hyper-interactive virtual world.

Metaverse transcends reality, combining Artificial Intelligence (AI), Internet of Things (IoT), and blockchain technology, to create an experience that encompasses both the digital and physical world. It will be a disruptor in the field of technology, changing the way in which interactions occur between people, businesses and both, in a future where our personal, professional and commercial life will be conducted digitally, interconnected and in sync with the physical world.

At this nascent stage (as it does not exist yet), there cannot be an all-illuminating definition of Metaverse as technologically driven transformations are organic and therefore inherently, unpredictable. Therefore, it is limiting to say the least, if Metaverse is tried to be properly defined at this stage.

However, Matthew Ball’s definition is by far, the closest which justifies the experience[i]

The Metaverse is a massively-scaled and interoperable network of real-time rendered 3D virtual worlds which can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications and payments.”

Artificial Intelligence of Things

IoT, it is a system of interrelated and interconnected computing devices that are provided with unique identifiers and embedded systems such as processors, sensors, and communication hardware, with the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction[ii]. Examples of IoT applications are smart homes (Amazon Echo, Google Home), smart TVs, wearables (Apple Watch, Fitbit), etc.

It can be simply defined as the point in time when more ‘objects’ are connected to the Internet than people. IoT in the context of metaverse is required for the dynamic real-time exchange of data with our avatar or ‘digital twin’. Traditionally, any scanned object on the metaverse is a digital static i.e., without live data feeds. This does not involve real metadata and live feeds.

Combining IoT with AI, we have Artificial Intelligence of Things (AIoT)[iii]. AI acts as the ‘brain’ of the ‘digital nervous system’ i.e., the Internet of Things. A combination of these two technologies allows computing devices to collect, analyse, decide, and interact on the basis of the data, all without human intervention. With the inclusion of AIoT, the interpretation of a physical object in its digital version with real-time overlaid data allows for the complex simulations to occur and take the metaverse to its maximum potential. The physical world can be recreated on the metaverse with the help of live data. Real world examples of the application of AIoT are – Amazon Go stores (Smart retail store)[iv], ET City Brain[v] (Drone traffic monitoring), to name a few.

Understanding Blockchain

As mentioned earlier, Metaverse is built on blockchain. Blockchain technology is a distributed ledger that facilitates the recording of transactions between multiple users over the internet. In order for a transaction to be completed on a blockchain, multiple blocks of information must reside on the computer base of each user (node). The transaction must be verified or authenticated by each node, obviating the need for a centralised trusted body such as a bank. Certain key functions, such as ‘hash’ and ‘time-stamping,’ distinguish blockchain technology. The Hash function aids in the verification of a file’s integrity. If there is any tampering or difference, the hash will produce a completely different result, allowing the tampering to be detected. Furthermore, time-stamping creates a chronological record of the transaction’s creation, access, and modification. These characteristics make blockchain an irreversible and incorruptible information repository, and thus a very useful form of evidence[vi].

Thus, blockchain is an immutable decentralised technology that provides strong data integrity guarantees in transactions between individuals and in trust-less networks, as against centralised databases. The digital ledger of the transactions is duplicated and distributed across a wide network of computers on the blockchain, which makes it resilient against hacks and malware attacks.

Blockchain-based Metaverse

The metaverse fundamentally requires blockchain to operate. The role of blockchain in the economic system is paramount. Without the support of blockchain, it will be difficult for resources in the metaverse to be recognised for their value or have an economic interactions equivalent to the traditional economic system. With rapid advancement in technologies, blockchain standards will develop, enhancing profits over time and in turn, grow the metaverse economy. Cryptocurrencies can be traded globally in seconds, with no payment intermediary taking temporary custody. These transactions are cryptographically secured and neither do the users require a bank account nor submit to a central authority, which deducts commission for merely processing payments and always possess a high chance of being cyber-attacked.

Ethereum is one such network designed to operate various decentralised application, based on its own blockchain. Non-Fungible Tokens (NFT) guarantees uniqueness by keeping encrypted transaction history permanently on the blockchain[vii]. Each token has a unique recognition value, authenticating the ownership of digital assets and assigning a value to the transaction.

Understanding Decentralisation

Web 2.0 (or, the internet as is) is plagued by corporate control, manipulated content, conflicts between entities, and legislations and abdicated responsibilities. Therefore, it is of utmost importance that the metaverse is not controlled by one corporation, but it should be moderated by everybody wherein an individual or a major developer, everybody should have an equal say. It is essentially the epitome of centralisation of powers.

Web 3.0 is evolving on this premise of decentralisation such that no corporate giant exercises exclusive control over the platform[viii]. A model of decentralised, blockchain-based governance is essential for the existence of the metaverse. Users, participants & community members work in harmony to moderate the metaverse network. A decentralised model is only possible as creation of virtual spaces, transfer of ownership of assets, financial transactions can be recorded on the blockchain ledger.

Centralised Databases

This distinction of database categories (centralised and decentralised) are based on the physical geographical location of the servers and/or the mainframe. Now in case of a centralised database as the name suggests, the data is stored on one specific server which provides access to multiple nodes and client-machines working with it. The data handling per se is ‘centralised’ in all aspects. The exact data is accessed and all subsequent changes are incorporated and the meta-data of the track changes are also stored in the same server and/or the mainframe. The aspect of scalability only depends on the amount of client load the mainframe is able to administer. The concern is whether or not the quantum of data which is processed in individual clients be stored in the centralised mainframe and/or server.

In case of decentralised data models[ix], the server has no specific location. The data so processed is simultaneously accessed and stored across platforms and the alterations get synced on different versions and variants of the identical dataset. Each node gets access to a version which is identical to the file in question and gets to make alterations to it which again gets synced up with all the other clients who has access to the file. The lack of a central datapoint from which the file is being accessed has a major technical lacuna when Indian Evidence Act is read into it, as to whether all the files are to be considered primary files or all of them are secondary copies since these are virtual copies of the primary file that was first fed into one of the multiple servers working and syncing simultaneously. How the ‘First Originator’ of the file is to be determined to comply with the standards set in Information Technology Rules, 2021 is a major issue considering how the primary-secondary divide is followed rigorously while submitting electronic evidence under Indian Evidence Act. A centralised database model hugely depends on ‘key-pair’. The subsequent chapter would emphasise on its operation in the Indian context.

The 2-LBC Model

To ensure security, a blockchain-based architecture for distributed transactions is proposed which ensures both high performance as well as guarantee of integrity. The 2-layer blockchain architecture (LBC) is a layered architecture that uses a ‘first layer’ for high performance, connected to a ‘second layer’ which uses Proof of Work (PoW)[x] to guarantee data integrity. The first layer requires is a permissioned blockchain whilst the second layer is a public permissionless blockchain[xi]. This is similar to the concept of public key and private key as discussed previously.

In the next article, we will discuss the close links between implementation of Key-Pair model pertaining to digital signatures, and the contentions pertaining to the primary-secondary divide with respect to electronic evidence in the Indian context.


Swarnendu Das and Rishabh Guha, The Rise of Metaverse: Challenges for the Indian Laws, Metacept-Communicating the Law, accessible at https://metacept.com/the-rise-of-metaverse:-challenges-for-the-indian-laws


[i] Matthew Ball, ‘Framework for the Metaverse’ (Matthew Ball, June 29, 2021) <https://www.matthewball.vc/all/forwardtothemetaverseprimer> accessed 25 November 2021.

[ii] Dave Evans, ‘The Internet of Things: How the Next Evolution of the Internet is Changing Everything’ (Cisco, April 2011) <https://www.ibm.com/in-en/topics/what-is-blockchain> accessed 25 November 2021.

[iii] Gerry Christensen, ‘Artificial Intelligence of Things (AIoT)’ (TechTarget, February 2019) < https://internetofthingsagenda.techtarget.com/definition/Artificial-Intelligence-of-Things-AIoT> accessed 25 November 2021.

[iv] Maggie Tillman, ‘Amazon Go and Amazon Fresh: How the ‘Just walk out’ tech works’ (Pocket-Lint, March 2021) < https://www.pocket-lint.com/gadgets/news/amazon/139650-what-is-amazon-go-where-is-it-and-how-does-it-work> accessed 25 November 2021.

[v] Manali Tiwari, ‘Could a Smart City with an ET City Brain Ever Rule the Entire World?’ (Hackernoon, September 2019) < https://hackernoon.com/will-a-smart-city-with-et-city-brain-ever-rule-the-world-i32g31np> accessed 25 November 2021.

[vi] IBM, ‘What is Blockchain Technology?’ (IBM) <https://www.ibm.com/in-en/topics/what-is-blockchain> accessed 25 November 2021.

[vii] Non-Fungible Tokens or NFTs are digital assets stored on a blockchain. These are unique, irreplaceable, and one-of-a-kind, ranging from an image, a GIF to a video. Buying an NFT is owning the rights of the said digital asset. Thus, when one argues that the image (say) can be easily downloaded from the internet, they are downloading the ‘copies’ of that image. But the original piece and its ownership exists with the individual who bought the NFT.

[viii] Everyone in the Metaverse should be able to create their own content and contribute to the experience and should not be limited to corporates and/or technically skilled people, else it will defeat the very goal of Metaverse of being an open-source space.

[ix] Peter Wayner, ‘What is a Decentralised Database?’ (VentureBeat, April 2021) < https://venturebeat.com/2021/04/02/what-is-a-decentralized-database/> accessed 25 November 2021.

[x] Proof of Work refers to a mechanism that allows decentralized networks to come to a consensus or agree upon specific activities such as order of transactions or account balances, preventing any form of attacks or manipulation.

[xi] Leonardo Aniello and others, ‘A Prototype Evaluation of a Tamper-Resistant High Performance Blockchain-Based Transaction Log for a Distributed Database’ [2017] 13 EDCC <https://ieeexplore.ieee.org/document/8123568> accessed on 25 November 2021.


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